The Obama administration recently released a forecast for a fiscal year 2013 deficit of $759 billion, substantially lower than the $1.1 trillion deficit in 2012. The Congressional Budget Office forecasts an even smaller deficit of $642 billion. If either prediction comes true, the federal government will run the smallest deficit since 2008, when the shortfall totaled $455 billion.
The lower deficit total is attributed to higher tax collections and lower spending. Tax receipts are up 14% for the fiscal year to date and spending is down 5%. Higher payroll taxes and increased taxes on wealthier Americans have pumped up receipts, while the federal sequester has tamped down spending.
The June surplus was the largest ever for the month and the largest since April 2008. In this past April the budget surplus totaled $113 billion. June spending fell 47% year-over-year although the drop was 29% when adjusted for timing of some payments.
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