U.S. Budget Deficit Shrinks As Revenues Rise

With rising tax rates on the rich and a better economy, the U.S. is headed toward the lowest deficits in five years.

Revenues from October through July, the first 10 months of the fiscal year, totaled $2.287 trillion, the Treasury Department said Monday. That’s up about 14% from a year earlier and the heftiest sum on record for the same time period.

In July, the budget deficit was $97.59 billion. Economists polled by Dow Jones Newswires had forecast a $96 billion shortfall…

Monday’s budget report showed that cash flows have improved markedly in recent years, helping reduce borrowing needs. Individual income tax, payroll tax and corporate tax receipts all have grown from a year ago, a reflection of higher tax rates on individuals as well as an economy that is supporting stronger wages and profits.

Fannie Mae and Freddie Mac, which received massive taxpayer bailouts, are now sources of revenue rather that drains on federal finances. The mortgage giants paid almost $67 billion to the U.S. Treasury in June and more is on the way as they continue to post profits.

By: Cheston Catalano

Cheston Catalano is a Kentucky-based journalist whose work has been featured in the Chattanooga Times Free Press and the Clarksville Leaf Chronicle. He is a long-time contributor to Liberaland.