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MailTribune.com
  • Federal budget deficit continues to shrink

  • The U.S. government Monday reported a $97.6 billion deficit for July, but remains on track to post its lowest annual budget gap in five years.
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  • The U.S. government Monday reported a $97.6 billion deficit for July, but remains on track to post its lowest annual budget gap in five years.
    July's figure raises the deficit so far for the 2013 budget year to $607.4 billion, the government says. That's 37.6 percent below the $973.8 billion deficit for the first 10 months of the 2012 budget year.
    The Congressional Budget Office has forecast that the annual deficit will be $670 billion when the budget year ends Sept. 30, far below last year's $1.09 trillion. It would mark the first year that the gap between spending and revenue has been below $1 trillion since 2008.
    Steady economic growth, higher taxes, lower government spending and dividends from mortgage giants Fannie Mae and Freddie Mac have helped shrink the deficit.
    Still, looming budget fights in Congress are complicating the picture. When lawmakers return from their recess in September, they will need to increase the government's borrowing limit. They will also have to approve a spending plan for the budget year that begins Oct. 1. Republicans and Democrats remain far apart on both measures.
    Republicans want President Barack Obama to accept deeper cuts in domestic government programs and in expensive benefit programs such as Medicare and Social Security. Obama has argued that Republicans must be willing to accept higher taxes on the highest-earning Americans.
    Conservative House Republicans have signaled a willingness to force a partial government shutdown as a way of defunding Obama's universal health care law, which they oppose.
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