Wshington DC(AP): The US budget deficit shrank by $52 billion during the first nine months of fiscal 2015 from a year ago as tax receipts grew faster than spending increases, the Congressional Budget Office said on Wednesday.
The 14% reduction to a $314 billion gap for the October-June period comes as the Republican-controlled Congress and President Barack Obama look headed toward a showdown over next year’s government spending.
Obama has warned that unless domestic spending cuts are eased, he could veto the measures now winding their way through the House of Representatives. That could set up another possible government shutdown on Oct. 1, the start of the new fiscal year.
CBO offered no changes to its March estimate of a full-year fiscal 2015 deficit of $486 billion, $3 billion more than the 2014 budget gap.
For the year’s first nine months, CBO said individual income tax revenues were up $153 billion from a year ago, with a strong 16 percent increase in non-withheld receipts that include tax payments for stock market gains, CBO said. Outlays in the October-June period grew five percent as military and net spending on interest payments on the debt fell.
For the month of June, which typically sees high tax collections, CBO estimated that the Treasury recorded a surplus of $51 billion, down $20 billion from June 2014.
The non-partisan congressional budget office also said that corporate income tax receipts for the first nine months of this fiscal year rose by $22 billion, or 9 percent, over the previous year. The change was “probably reflecting higher taxable profits in calendar years 2014 and 2015,” CBO said.
Other factors helping the deficit picture, CBO said, included lower interest payments on the public debt because of low inflation, declining defense spending, more money collected from government auctions of broadcast licenses and falling unemployment benefit payments.