TribLIVE

| USWorld


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

More tax revenue slices into big deficit

Daily Photo Galleries

By The Associated Press
Wednesday, June 12, 2013, 5:21 p.m.
 

WASHINGTON — The government reported on Wednesday that the budget deficit widened in May by $139 billion. But the annual deficit stayed on track to finish below $1 trillion for the first time since 2008.

Steady economic growth and higher tax rates have boosted the government's tax revenue. At the same time, government spending has barely increased.

With the May increase, the deficit through the first eight months of this budget year totaled $626 billion, according to the Treasury. That's down $218 billion lower than the same period last year.

The Congressional Budget Office estimates the deficit won't grow much before the budget year ends on Sept. 30. It forecasts an annual deficit of $642 billion. If correct, that would be well below last year's deficit of $1.09 trillion and the lowest in five years. It would still be the fifth-largest deficit in history.

The federal deficit represents the annual difference between the government's spending and the tax revenues it takes in. Each deficit contributes to the national debt, which recently topped $16 trillion. At the same time, a smaller deficit has taken pressure off of negotiations to raise the federal borrowing limit.

So far this budget year, revenue has risen 15 percent to $1.8 trillion. The government is taking in more money because of higher rates that went into effect on Jan. 1. Modest economic growth has also boosted tax revenue.

And this month the government is expecting large dividend payments from Fannie Mae and Freddie Mac, which will keep the deficit from growing. Fannie is expected to pay $59.4 billion; Freddie is expected pay $7 billion. The mortgage giants are profitable again and are paying dividends to the government in return for the loans they received during the financial crisis.

While revenue has increased greatly, spending has only risen 0.8 percent this year to $2.43 billion.

 

 
 


Show commenting policy

Most-Read Nation

  1. The ‘McQueen effect’: A car owned by late actor can fetch 3 to 5 times its worth
  2. White House ricochets in nonprofits’ birth control coverage fray
  3. Mudslides plague Washington state after wildfire strips hillsides
  4. NASA expected to hire private rocket
  5. His murder-arson conviction overturned, man walks free 24 years later
  6. Obama pressured to obliterate ISIS as attack risks rise
  7. U.S. could have done better, says brother of slain journalist
  8. Reid apologizes for jokes at Asian business event
  9. Hackers hit 25,000 government workers
  10. Kentucky firefighters recovering from ice stunt shocks
  11. Scientists hope tiny robotic bee’s big dreams take flight
Subscribe today! Click here for our subscription offers.