More tax revenue slices into big deficit
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
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Tsarnaev’s lawyer admits he carried out Boston bombing
- Case on Obamacare tax subsidies heads to Supreme Court
- Physicians’ organization cites shortages of doctors will grow, mostly in senior care
- Lawmakers press Veterans Affairs for improved access to rural health care
- GOP admits defeat as Congress approves Homeland funding
- Feds raid ‘maternity hotels’ in Ca.
- Feds find sweeping racial bias in Ferguson
- States ask judge not to lift stay in immigration lawsuit
- Expanded background checks pushed again on gun show, Internet purchases
- Carnegie Mellon expert to school Congress on security
- Mother of 12-year-old shot dead by police criticizes Cleveland for faulting son, failing to apologize