Federal Budget Deficit Falls to $94.6 Billion in July

Budget Deficit
J. David Ake/APThe U.S Treasury Building in Washington.
By MARTIN CRUTSINGER

WASHINGTON -- The federal government ran a lower deficit this July than a year ago, keeping it on course to record the lowest deficit in six years.

The July deficit was $94.6 billion, an improvement of 3.1 percent from a year ago, the Treasury Department reported Tuesday in its monthly budget statement.

For the first 10 months of this budget year, the deficit totals $460.5 billion, down 24.2 percent from the same period a year ago.

The Congressional Budget Office expects this year's deficit to total around $500 billion, down from $680.2 billion last year. That would be the lowest deficit since an imbalance of $458.6 billion in 2008, which was a record at the time. The Great Recession and efforts to deal with the financial crisis sent deficits above $1 trillion for four straight years.

The July imbalance followed a $70.5 billion surplus in June, a month when government coffers are swelled by quarterly tax payments. But without the quarterly payments, the government ran a deficit in July, a month when it has recorded deficits in 58 of the last 60 years.

The yearly deficit peaked at $1.4 trillion in 2009 and remained above $1 trillion for each of the next three years, finally falling to $680.2 billion last year.

CBO projects the deficit will fall to $469 billion in 2015 before starting to rise again, topping $1 trillion annually starting in 2023. Spending on the government's major benefit programs, including Social Security and Medicare, will drive those increases as more baby boomers retire.

For the first 10 months of the current budget year, which began in October, government revenue totals $2.47 trillion, up 8 percent from the same period a year ago, reflecting a stronger economy which has boosted employment and led to rising income tax revenues and higher corporate tax payments.

With two months left in the current budget year, government spending is up 1.2 percent to $2.93 trillion, compared to a year ago, reflecting government efforts to restrain outlays in an effort to get control of the budget deficits.

Republicans have accused President Barack Obama of failing to propose significant cuts to reduce soaring entitlement costs. Democrats counter that Republicans would rather impose sharp cuts on needed government programs than impose higher taxes on the wealthy.

Neither side is expected to make major concessions in this congressional election year. But the budget wars of the past three years have subsided at least for a brief time. An agreement was reached in December on the broad outlines for spending over the next two years. The agreement will allow Washington to avoid the gridlock that culminated in October's 16-day partial shutdown of the government.

The budget cease-fire also includes legislation that suspended the government's borrowing limit through March 15 of next year. That puts off another battle over raising the debt ceiling until a new Congress takes office in January.


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Holli, Chaney

Now you know why the Republicans are the party of NO.. See ..Bting the party of the adults pays off.

August 12 2014 at 7:42 PM Report abuse -2 rate up rate down Reply
kitharris1

the top 25% of adjusted gross income earners pay 86% of all federal income tax. i wonder how much more obama wants? note: i am not in the top 25%. the national debt increase averaged .12 trillion per year under bush. it has averaged 1.2 trillion under obama for a 5 year average.

August 12 2014 at 4:06 PM Report abuse rate up rate down Reply
1 reply to kitharris1's comment
kitharris1

change (.12 trillion) to .26 trillion, typo. :-(

August 12 2014 at 4:09 PM Report abuse rate up rate down Reply
jdykbpl45

Tax collections are up!

August 12 2014 at 1:12 PM Report abuse +1 rate up rate down Reply
tmiller473

But the debt keeps growing. Lipstick on a pig does not keep it from being a pig, and trying to spin this is a perfect example of journalistic malpractice

August 12 2014 at 11:36 AM Report abuse +3 rate up rate down Reply
scottee

billions of deficit dollars and $17 trillion of national debt are the problem. no fiscal constrains on Washington is the problem. The Fed printing and diluting our dollar is the problem. the 73,000 pages of tax code are the problem. what to do?

August 12 2014 at 10:47 AM Report abuse +3 rate up rate down Reply
kyvibej

In an administration obstinately opposed to real growth policies, and an education system that generates workers that can barely read, the best anyone can hope for is part-time and minimum-wage jobs.... No wonder minimum wage increases are being pushed.

Taking all of these forces together, you get Obama's dream: a drop in the standard of living of the affluent accompanied, by redistribution of wealth to the Democrat-voting minimum wage employee.

Just take myself for example - I was laid off in 2010 shortly after the start of the recession. I’m highly skilled in my field (chemical engineer), yet have been bouncing around from job to job all making starting salary numbers, despite being 40 years old.

Paying my mortgage is a struggle. Paying my health insurance is worse ($375/month from Freelancer’s Union). I am forced to buy cheap bare minimum car insurance ($18/month from Insurance Panda). My daughter is forced to attend a public school that is in increasingly worse condition. Yet here I am, unable to afford a quality education for her. I can only assume it is MUCH MUCH WORSE for other people.

Now if Obama manages to avoid any significant voter-identification legislation and manages to reduce/eliminate deportations while keeping open the border, all of his dreams come true!

August 12 2014 at 9:53 AM Report abuse +2 rate up rate down Reply