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.

Spending fell 5 percent in October to $290.5 billion, mostly because of the across the board cuts that took effect in March. Spending delayed by the shutdown could occur in November, pushing up the deficit next month. But some of that delayed spending, as well as back pay for furloughed federal workers, likely occurred in October after the shutdown ended Oct. 16.

So far, the improving budget picture hasn’t made it easier for Congress and the White House to reach a longer-term agreement on taxes and spending. A fight over the budget and President Obama‘s health care program led to the 16-day shutdown. The battle ended with only a temporary agreement to re-open the government until Jan. 15. And the borrowing limit was extended to just Feb. 7.

Congressional leaders also agreed to set up a House-Senate conference committee that is seeking a budget deal to avoid another shutdown next year. That committee held a public hearing Wednesday that made little apparent progress. It mostly consisted of speeches by members of Congress and testimony by Douglas Elmendorf, director of the Congressional Budget Office.

A top priority for many lawmakers is to replace the automatic spending cuts scheduled for 2014, which are expected to have a greater impact on the budget. Many agencies used spare cash last year to offset some of the cuts. That’s unlikely to be an option this year.

Private talks between House Budget Committee Chairman Paul Ryan, R-Wis., and his Senate counterpart, Patty Murray, D-Wash., are focused on replacing the across the board cuts with other spending reductions and special interest tax breaks.

(Photo: AP)

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4 thoughts on “US Budget Deficit Falls 24 Percent in October

  1. You’re a dumbass!!!! Nothing misleading just hard for you to swallow that a black man is in charge…..Get Over It! Bush higher? Let’s ask the dead soldiers who died in his trump up war. FYI Bernie Madoff was card carrying Repug!!!!!

  2. Joe Valdez on said:

    Vey misleading . Thanks to The Republicans who refused to yield to President Obama’s bait of “Investing In America’s Future” which in fact was to steal more money from Taxpayers to give lucrative contracts to Obama’s Pals just like Convicted Fellon former Detroit Mayor Kwame Killpatrick who stole and embezzled Black people pensions in Detroit. President Bush and Obama are the worst Presidents America has ever had . Latest Approval Polls for Obama are 38% For and 56% Against Obama 6 % were neutral . Bush was a little higher . President Obama is now officially the most unpopular President ever, even worse than Nixxon , Bush, and Hoover

    • Cool Thug on said:

      You know, Joe, ever since you first showed up here, I’ve been wondering what your problem is. I finally figured it out… you don’t know squat about anything! Here’s what I mean; let’s talk about presidential ratings as an example.
      You say Obama is now “the most unpopular President ever, even worse than Nixxon.” Obama currently has a disapproval rate of “38%’, you say. At Nixon’s lowest point , in July and August of 1974, his approval rate was at 24%. Let’s go on…
      In January of 1983, Ronald Reagan’s approval rate was at 35%. Bush was NOT “a little higher”!In October of 2008, George W. Bush’s approval rate was at 25%.
      Here is the source of my information: The Gallup Poll. November 13, 2013.
      Joe, please know what YOU are talking about! Stop making an idiot out of yourself!

      • Joe is Mexican so he probably can’t read english to well. That is why he just makes isht up.

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