WASHINGTON – The federal deficit through July is running well below last year's pace, helped by strong growth in revenues, the Treasury Department reported Thursday.
Through the first 10 months of this budget year, the deficit totaled $239.7 billion, an improvement of 20.8 percent from the same period a year ago, when it was $302.8 billion.
The deficit in July totaled $33.2 billion, down sharply from an imbalance of $53.4 billion in July 2005.
The narrowing of the deficit this year reflects a surge in government revenues from higher corporate and individual tax receipts.
The administration is now forecasting that the deficit for the 2006 budget year, which ends on Sept. 30, will total $296 billion, a marked improvement from the $423 billion deficit the administration was forecasting back in February.
The Congressional Budget Office is even more optimistic, forecasting the deficit for this year will fall to $260 billion. The 2005 budget deficit was $319 billion and the 2004 deficit was an all-time record of $413 billion.
The administration credits Bush's first-term tax cuts for helping to boost economic growth and prompt a rebound in government revenues.
But administration critics contend the president inherited budget surpluses when he took office. They note that a $296 billion deficit would still be the fourth largest in history.
Through July, government receipts total $1.969 trillion, an increase of 12.8 percent from the same period in 2005.
Government spending is also up, but by a smaller 7.8 percent, rising to $2.209 trillion through the first 10 months of the budget year, which began last Oct. 1.
The report showed that the biggest spending categories in July were for Social Security, $46.8 billion; the Department of Health and Human Resources, $41.5 billion; and the Defense Department, $35.3 billion.
The fourth largest spending category was interest payments on the national debt at $23.3 billion, an amount which represented 12 percent of total federal outlays last month.