WASHINGTON (AP) — The federal government's deficit for the first two months of the new budget year is down 21 percent from the same period a year ago, although much of that improvement stems from quirks in the calendar.
The Treasury Department said Wednesday the deficit for November totaled $56.8 billion, a drop of 58 percent from last year's November deficit of $135.2 billion. For the first two months of the budget year that began Oct. 1, the deficit totals $178.5 billion, an improvement of 21 percent from the same period last year.
However, the calendar heavily influenced the changes by shifting payment dates for various government benefits. Adjusting for those changes, Treasury says the deficit this year is still 6.8 percent lower than last year
In October and November, tax receipts totaled $404.2 billion, 6 percent more than a year ago. Outlays totaled $582.7 billion for the two months, 4 percent below the same period a year ago.
The CBO is forecasting that the deficit for the 2015 budget year, which runs through next September, will fall to $469 billion from $483.3 billion in 2014. That would be an improvement of 3 percent for the full year.
Congress came back after the November elections facing the task of passing a budget for the current budget year. Negotiators on Wednesday reached agreement on a $1.1 trillion spending package, but the measure remains contentious. The House is scheduled to vote on the proposal Thursday.
After this year, the CBO is forecasting that deficits will resume rising for the rest of the decade as baby boomers retire and Social Security and Medicare costs rise. The CBO and other budget experts have warned that the current trajectory for the deficit is unsustainable and eventually could lead to a fiscal crisis.
The $483 billion deficit for 2014 was the smallest since George W. Bush's last full year as president. When measured against the size of the economy, the deficit equaled 2.8 percent of gross domestic product, below the average for the last four decades. By comparison, the deficit for 2013 was $680 billion, or 4.1 percent of GDP.
That sizable borrowing reflected deficits that topped $1 trillion annually for four consecutive years, from 2009 to 2013, as the government struggled with a deep recession, which cut into tax revenues and forced higher spending for safety-net programs such as unemployment benefits and food stamps.
The improved deficit picture for 2014 reflected slower growth in spending due to lower-than-expected health care costs as well as a 2011 budget pact with Republicans that sharply curbed agencies' operating budgets. Obama reached an agreement with Republicans in Congress for a tax increase on higher income earners at the beginning of 2013.
Since that tax increase, the GOP-controlled House and Obama have steered clear of further large-scale efforts to reduce the deficit. Instead, a budget deal last December reversed agency budget cuts known as sequestration.
But with Republicans winning control of the Senate in November's elections, they are expected to try to rein in the deficit even further. However, Obama has said that any large-scale budget deal needs to include higher taxes, something that Republicans oppose.