Congress' official budget analyst is projecting a federal deficit for this year of $426 billion. That's a substantial drop since the March forecast and the lowest shortfall of Barack Obama's presidency.
But the nonpartisan Congressional Budget Office is also warning that without action by lawmakers, federal deficits will start rising again in the next several years, spiking back above $1 trillion in 2025.
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In two weeks, Congress returns to Washington from a summer break steering toward an autumn of budget clashes. Democrats are likely to say that Tuesday's report shows the Republican push to curb spending is unneeded. The GOP is expected to say growing deficits should be addressed now.
In March, the budget office projected a $486 billion deficit for this fiscal year, which runs through Sept. 30.