CBO: US on Track for Lowest Deficit in Five Years
This mark would be the first time since 2008 that the budget deficit would fall below $1 trillion. Higher taxes, improved growth of the economy, and federal spending cuts have helped shrink the deficit and increase dividends from Fannie Mae and Freddie Mac. However, continuing Congressional budget fights over raising the government’s borrowing limit and a spending plan for the next budget year could complicate the economic picture. A particularly bleak view feared by some investors is a government default on debts thanks to intransigence on both sides of the Congressional aisle.
The government collected $2.29 trillion in revenue through July, an increase of 13.9 percent over the same period in 2012. Spending totaled $2.89 trillion, down 2.9 percent from one year ago. This spending decline is a direct result of government spending cuts put into place on March 1. Government deficits increase the national debt, which now sits at $16.7 trillion.