In its monthly budget report, the Treasury Department said Wednesday that the May deficit dropped to $82.4 billion, down from a deficit of $130 billion in May 2014. But last year's deficit was inflated because June 1 fell on a Saturday, requiring the government to mail out $35 billion in June benefit payments in May of last year.
For the first eight months of this budget year, which began Oct. 1, the deficit totals $365.2 billion, down 16.3 per cent from the same period last year. This year's deficit improvement has been helped by a stronger economy, which has pushed up tax receipts by 8.6 per cent.
The revenue increase pushed receipts to $2.1 trillion for the period October through May. Outlays were up at a slower pace, rising 4 per cent to $2.47 trillion.
The government has run a deficit in May for 60 of the past 61 years. The May deficit followed a $156.7 billion surplus in April, when a flood of tax payments pushed government receipts to an all-time monthly high.
The Congressional Budget Office is forecasting that the deficit for the full year will total $486 billion, little changed from last year's deficit of $483.4 billion.
The 2014 deficit was down from $680.2 billion in 2013. Before then, the U.S. had recorded four straight years of annual deficits topping $1 trillion. That reflected the impact of a severe financial crisis and the worst recession since the Great Depression of the 1930s.
In the budget plan President Barack Obama unveiled for 2016, his final full year in office, the president is seeking authorization from Congress to spend $4 trillion and is projecting a deficit of $474 billion.
Obama's spending plan would boost spending on domestic and military programs and seek to raise taxes by $2 trillion by raising levies on the wealthy, corporations and smokers.
Republicans have attacked Obama's proposed tax increases and the fact that under Obama's spending plans, the budget will never reach balance. A GOP budget which cleared Congress last month seeks to balance the government's books over the next decade. It would cut spending on domestic programs and government benefits like Medicaid and food stamps.
Democrats have charged that the GOP budget only balances on paper because Republican lawmakers will balk at approving the follow-up legislation to enact the painful cuts needed to achieve balance without raising taxes.Suggest a correction