WASHINGTON (AP) — The U.S. government started the first month of the 2014 budget year with a $91.6 billion deficit, signaling further improvement in the nation’s finances at a time when lawmakers are wrestling to reach a deal that would keep the government open past January.
The Treasury Department said Wednesday that the deficit in October fell 24 percent compared with the $120 billion imbalance recorded in October 2012. The deficit is the gap between the government’s tax revenue and spending.
Across-the-board spending cuts and the partial government shutdown helped lowered expenditures in the first month of the new budget year. Higher taxes and an improved economy also boosted revenue.
The October decline comes after the government ran an annual deficit in 2013 of $680 billion, the lowest in five years and the first in that period below $1 trillion. Shrinking deficits could take some pressures off of lawmakers, who are facing a Dec. 13 deal to fund the government and avoid another shutdown.
Even with the decline, last year’s annual deficit was the fifth-largest in history and added to the nation’s record $16.7 trillion debt.
An improved economy has put more people back to work and boosted corporate profits. And Social Security taxes rose at the beginning of the year, along with income tax rates on wealthier Americans. Tax revenue rose 8 percent in October compared with a year earlier to $199 billion.