US budget deficit likely to narrow slightly in February

MarketsAssociated Press

The Treasury Department releases federal budget data for February at 2 p.m. Eastern on Thursday.

DEFICIT NARROWS: The forecast by the Congressional Budget Office is that the deficit will narrow slightly to $192 billion in February, down from a deficit of $193.5 billion in January 2014.

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REVENUES AND SPENDING: The CBO expects the deficit for the current budget year, which began Oct. 1, to total $386 billion through February, up by $10 billion from the same period last year. That forecast is based on an estimate that revenues are up 7 percent so far this year and spending is up 6 percent.

For the entire budget year, which ends Sept. 30, the CBO is forecasting a deficit of $486 billion, up slightly from the 2014 deficit of $483.3 billion.

The 2014 deficit was down from $680.2 billion in 2013. Before 2013, the nation recorded four straight years of deficits topping $1 trillion annually, reflecting the impact of a severe financial crisis and the worst economic downturn since the Great Recession in the 1930s.

President Barack Obama last month unveiled a new budget proposal which projects the 2015 deficit will rise to $583 billion, sharply higher than CBO's estimate for this year. Obama is asking Congress for authorization to spend $4 trillion next year and project a deficit in 2016, his last full year in office, of $474 billion.

The president's budget plan proposed increasing taxes on the wealthy and using the extra income to rebuild America's aging roads and bridges as well as providing two years of free community college to qualified students and trimming future deficits to what the administration said would be manageable levels.

But Republicans, who now control both the House and the Senate, have attacked Obama's spending proposals for raising taxes and failing to tackle rising costs for the government's biggest benefit programs, Social Security and Medicare. GOP lawmakers have pledged that the budgets they put together in coming weeks will eliminate deficits over the next decade.