The budget deficit for 2015 is expected to drop to $426 billion, according to a report released Tuesday by the nonpartisan Congressional Budget Office (CBO).
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The $426 billion deficit this year is about $60 billion less than last year, and is far down from the trillion-dollar numbers notched at the beginning of the Obama administration, when he and Congress agreed to a massive package of tax cuts and deficit spending to try to bolster the economy.
The finances workplace launched its figures two weeks earlier than lawmakers return to the Capitol from a summer time break, steering towards a price range conflict. Deficits have dropped since then, falling to $485 billion previous year .
In March, the budget office projected a $486 billion deficit for this fiscal year, which runs through September 30.
CBO said Tuesday it reduced its budget deficit projection for 2015 due to higher-than-anticipated receipts from corporate and individual income taxes.
Republican Mike Enzi of Wyoming, chairman of the Senate Budget Committee, attributed the falling deficit to spending caps put in place as part of negotiations over the federal debt ceiling.
But the economy remains sluggish, and the CBO pushed back its big rebound projection for yet another year, saying the economy will only grow at 2 percent this year, rising to 3.1 percent in 2016.
Meanwhile, debt is expected to equal roughly 74 percent of GDP by the end of fiscal 2015, CBO said, and is still projected to rise over the next decade if current laws remain unchanged.
“I would caution those who would use this report as an opportunity to take these short-term savings and push for more spending”.
The analysis also said even though the government has reached the legal limit of money it can borrow, the unforeseen extra revenue means the Treasury Department should be able to use accounting maneuvers to free up cash and avoid breaching that limit until mid-November or early December. Those include temporarily taking cash from certain federal pension funds that is restored once Congress enacts a new debt ceiling.
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Should Congress be unable to raise the debt limit, it would result in the nation’s first-ever default on the debt.
