CBO projects a $188 billion decrease in this year's federal budget deficit, but debt would then grow
The Congressional Budget Office says it expects the federal budget deficit to drop by $188 billion this fiscal year to $1.5 trillion
WASHINGTON (AP) — The Congressional Budget Office said Wednesday that it expects the federal budget deficit to drop by $188 billion this fiscal year to $1.5 trillion, a short-lived dip as the annual shortfall is likely to rise over the next nine years.
Two major factors are behind the decline in the budget deficit this year, each of them one-off events that reflect the challenge for lawmakers in trying to close the growing gap between tax revenues and spending.
First, the current fiscal year started on an October weekend, which caused its payments to be booked in fiscal 2023 without offsetting revenues.
Second, tax revenues are expected to increase because of better returns on financial investments and the collection of taxes from last year that the government postponed because of natural disasters.
