WASHINGTON – A record amount of tax revenue flowed into federal coffers in July, helping to keep the government on track to significantly lower the budget deficit (search) this year.
The Treasury Department reported Wednesday that revenue collections jumped 5.7 percent last month from a year ago, pushing total receipts to $142.09 billion, the largest amount ever collected by the federal government in the month of July.
The Bush administration last month significantly lowered its estimate for this year's budget deficit -- to $332.65 billion, down 22 percent from its February projection.
For July, government spending totaled $194.88 billion. The deficit for the month totaled $52.79 billion, down 23.7 percent from an imbalance of $69.2 billion in July 2004.
The deficit for the past 10 months totals $302.59 billion, down 23.6 percent from the $396.32 billion in red ink run up during the same period in 2004.
In 2001, the year Bush took office, the government recorded a surplus of $127 billion. It was the fourth consecutive annual surplus, a string that had not been matched since 1930.
However, the bursting of the stock market bubble and the 2001 recession cut into tax collections while the global War on Terror (search) that was launched after the Sept. 11, 2001 terrorist attacks pushed spending higher.
Additionally, Bush got Congress to approve major tax cuts in 2001 and 2003 which reduced revenue collections in an effort to jump-start the stalled economy. Last year's deficit set a record in dollar terms of $412.8 billion.
Bush, meeting with his economic team on Tuesday at his Crawford, Texas, ranch, attributed the improvement in this year's deficit performance to spending restraint and his tax cuts, which he said "got our economy going."