The estimated federal budget deficit of $184 billion in the first four months of fiscal 2014 is 37 percent lower than the actual $290 billion deficit in the first four months of FY 2013.
Federal receipts are higher, mainly because wages, salaries and tax rates were higher in late 2013 than in late 2012, according to a monthly budget review the Congressional Budget Office released Feb. 7. An agreement to avert the so-called fiscal cliff as 2013 began didn’t extend a temporary payroll tax cut, while raising the top marginal tax rate on ordinary income.
Outlays were lower than at a similar period the previous year partly because of lower defense and agricultural spending, the CBO report said.
As the federal budget deficit continues to fall — it was $680 billion in FY 2013, less than half the record high of $1.42 trillion in FY 2009 — so too has some of the issue’s salience.
About 63 percent of Americans say that reducing the budget deficit should be a top policy priority, down from 72 percent a year earlier, according to a report late last month from the Pew Research Center. The figure was 53 percent when President Barack Obama took office in January 2009, the report said.
“If lawmakers enact no further legislation affecting spending or revenues, the federal government will end fiscal year 2014 with a deficit of $514 billion, or 3.0 percent of gross domestic product (GDP), CBO estimates,” the budget agency said. The $680 billion deficit in FY 2013 translated to 4.1 percent of GDP. The deficit is projected to rise again later this decade, driven by increased health-care expenditures.