The U.S. government deficit for fiscal 2006 so far is about $223 billion, $50 billion less than the deficit recorded through May of last year, as revenues shot up at a faster pace than spending, the Congressional Budget Office said Tuesday.
The CBO, Congress' nonpartisan budget analyst, said revenues have risen by about 13 percent during the first eight months of the fiscal year compared with the same period last year. Meanwhile, government spending has increased by about 8 percent, the CBO said in its monthly budget review.
A month ago, the CBO estimated the budget deficit could fall to around $300 billion for all of fiscal 2006 which ends Sept. 30, down from the fiscal 2005 deficit of $318 billion. The full year deficit projection was not updated.
According to this month's CBO report, receipts from corporate income taxes grew by about $43 billion, or 30 percent, during the first eight months of the fiscal year.
But many private economists see a U.S. economy that is downshifting with a cooling housing market, job creation and consumer spending.
A quarterly corporate tax payment due on June 15 for many firms "should provide a good indication of corporate receipts for the full fiscal year," the CBO said.
Much of the growth in government spending so far this year was related to defense outlays, flood insurance claims and other disaster relief related to last year's hurricanes in the Gulf Coast, as well as the new Medicare prescription drug benefit for the elderly.
Congress is trying to finish work this week on an emergency spending bill for the wars in Iraq and Afghanistan and more hurricane relief. The measure likely will total around $94 billion in deficit spending.