Rising revenues to shrink US deficit rapidly through 2015Submitted by DeMolay on Tue, 05/14/2013 - 23:02
The US deficit is shrinking considerably more quickly than previously thought, the Congressional Budget Office said on Tuesday in a report that could sap Congress' sense of urgency to find further budget savings.
In one fell swoop, the non-partisan budget referee slashed its deficit forecast for the current fiscal year by US$203 billion (S$251 billion) from estimates made in February to US$642 billion - making it the smallest budget shortfall since 2008.
The CBO said the deficit will fall to US$378 billion by 2015 with no congressional action - a sharp contrast to the US$1 trillion recession-driven deficits in each of President Barack Obama's first four years in office.
The revisions are driven largely by rising tax revenue from individuals and corporations as the economy sputters back to life.
They also reflect stronger contributions to US Treasury coffers from government-run mortgage finance groups Fannie Mae and Freddie Mac.
"Because revenues, under current law, are projected to rise more rapidly than spending in the next two years, deficits in CBO's baseline projections continue to shrink, falling to 2.1 per cent of GDP by 2015," the CBO said in its report.
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