WASHINGTON – The U.S. will post the narrowest budget deficit this year as a share of the economy since 2007 as stronger growth helps boost tax revenue, according to the Congressional Budget Office.
The deficit will decline to $514 billion this fiscal year from $680 billion in 2013 before surging to $1.074 trillion in a decade, according to the Congressional Budget Office.
A stronger economy, lower unemployment, higher tax revenue and payments from mortgage-finance companies Fannie Mae and Freddie Mac are helping the U.S. narrow the gap from the 2009 record shortfall of $1.4 trillion.
“The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next,” CBO said in a report released today in Washington. “After that, however, deficits are projected to start rising - both in dollar terms and relative to the size of the economy.”
A suspension of the federal debt limit, enacted by Congress in October, is scheduled to expire Feb. 7. Treasury Secretary Jacob J. Lew has repeatedly urged Congress to act quickly to raise the cap, saying the government’s ability to meet its obligations will run out before the end of this month.
The 2014 deficit will shrink to 3 percent of the economy, according to the CBO, which said the gross domestic product will expand 3.1 percent in the fourth quarter of 2014 from the same period last year.