The federal budget deficit, helped by a surge in government revenue, is running 14.1 percent below the pace of last year, the government reported Wednesday. The Treasury Department said that with just one month to go in the budget year, the deficit totals $304.3 billion, down from $354.1 billion during the same period a year ago.The Congressional Budget Office is forecasting that the deficit for the entire year will be $260 billion, which would mean that September will see a sizable surplus. The administration is somewhat less optimistic, forecasting a deficit of $295.8 billion for the current budget year, which ends Sept. 30.
However, both the CBO and the administration are expecting an improvement from last year's deficit of $319 billion, the third highest amount of red ink in history. The record deficit in dollar terms was $413 billion set in 2004.
Even with the improvement, Democrats point to CBO forecasts that the deficit over the next decade will total $1.76 trillion as evidence that President Bush's emphasis on tax cuts has put the country on an unsustainable fiscal path. The administration counters that Bush's first term tax cuts helped to lift the country out of the 2001 recession and provided support for a strong economic rebound that has resulted in the gusher of revenues this year.
For August, the deficit jumped to $64.6 billion, up from $51.3 billion in August 2005. The federal government has run a deficit in August every year since 1954.
Through the first 11 months of the current budget year, revenues have totaled a record $2.12 trillion, up 11.5 percent from the same period a year ago. Government spending is also at record levels so far this budget year, totaling $2.43 trillion, an increase of 7.6 percent from the same period a year ago. The faster growth in revenues than in spending has meant that the 11- month deficit of $304.3 billion is 14.1 percent below the red ink run up during the same period a year ago.