The Federal Budget Deficit is Lower Than 2012

Last updated on March 27, 2013

The U.S. federal budget deficit is lower than it was in 2012. The deficit grew February 2013 by $203.5 billion, the Treasury Department said, but it is still lower than 2012.

This February, the gap was $28 billion less than what it had been the same time a year ago. If the first five months of the budget, beginning on October 1^st are considered, the deficit is around $87 billion less than last year’s gap during the same period.

According to estimates, the budget deficit will be around $845 billion this year, which will be $1.1 trillion less than 2012 and its lowest level since 2008. At present, the budget deficit is at its lowest level under President Obama’s presidency. Senate budget has also put forth their strategy to raise revenue.

Although this is good news, even with the improvement, the government still borrows 24 cents for every dollar it spends. The recent spending cuts, part of the sequester, will further reduce the deficit. The expiration of payroll tax cuts will add revenue significantly, leading to a reduction in borrowing. In February, 2013, the budget deficit stood at $205 billion, according to the Congressional Budget Office.

With government spending cuts, the expiration of some tax cuts, and an increase in taxes on the wealthy, the government is expected to see a further reduction in budget deficit. The future holds the key, but the indications of the present hint towards better economic growth.