With tax revenues showing a significant increase, the Congressional Budget Office released a report on Tuesday showing that the U.S. budget deficit for the first seven months of fiscal year 2013 was much narrower than in the year-ago period.
The CBO said the federal government ran a budget deficit of $489 billion in the period from October 2012 through April 2013, which is 32.1 percent narrower than the $720 billion deficit recorded during the same period last year.
The narrower deficit reflected a 16 percent jump in taxes as well as a more modest 1.9 percent drop in federal government spending.
Taxes increased by $184 billion due in part to higher wages and salaries, the expiration of the payroll tax cut and increases in tax rates on income above certain thresholds.
The CBO said net corporate income taxes rose by $24 billion or 22 percent, likely reflecting growth in taxable profits in both calendar years 2012 and 2013.
Meanwhile, government spending for the first seven months of fiscal year 2013 fell by $41 billion after adjusting for shifts in the timing of certain payments.
The decrease in government spending was partly due to a 5 percent drop in defense spending as well as a 25 percent decrease in spending on unemployment benefits.
While spending on housing assistance, energy programs, and international assistance also fell, the decreases were partly offset by higher spending on Social Security, Medicare, and Medicare.
The report said spending by the Agriculture Department also rose as drought led to increases in crop insurance payments, while FEMA also saw an increase in spending due to Hurricane Sandy.
The CBO also estimated a $112 billion surplus in April of 2013, reflecting a $52 billion increase from April of 2012. The increase in the surplus would be even larger if not for distortions caused by quirks of the calendar.
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