Ahead of the Bell: US Budget Deficit
The Treasury Department reports on the federal budget deficit for November. The report will be released at 2 p.m. EST on Wednesday.
LOWER DEFICIT: The Congressional Budget Office expects the deficit for November will drop to $140 billion, $33 billion below the deficit in November 2012.
DEFICITS FALLING: The government closed out the 2013 budget year on Sept. 30 with a budget deficit of $680 billion. That was the lowest deficit in five years and the first in that period below $1 trillion. The country had run up a four-year string of $1 trillion-plus deficits starting with an all-time high of $1.4 trillion in 2009.
Those deficits were the result of a deep recession which caused a drop in tax revenue and an increase in support payments such as unemployment benefits. While economic growth has been sub-par since the recession ended, more people have been getting jobs, which boosts tax revenues.
Congress and the administration have been struggling to reach agreement to make further improvements in the deficit outlook, but Republicans have refused to boost taxes further and Democrats are opposed to making significant reductions in government entitlement programs such as Social Security without additional tax revenue.
A failure to reach agreement on a budget for the current 2014 budget year resulted in a 16-day partial government shutdown which ended when Congress passed a temporary spending measure and also agreed to a temporary suspension of the government's borrowing limit.
A House-Senate conference committee is working to reach a deal that can be approved by the Senate and House before lawmakers leave town for their holiday break. The committee has an informal deadline of reaching a deal by Friday.
Private economists are looking for further improvement in the deficit in 2014. The National Association for Business Economics projected the deficit would drop to $600 billion in 2014, helped by rising tax receipts from an improving economy.
The NABE forecasters projected that the overall economy will grow at an annual rate of 2.5 percent in 2014, up from what they expect will be a year of lackluster growth around 1.7 percent this year.