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Federal deficit on pace to be least since ’08

– The U.S. government ran a big surplus in April, thanks to a flood of tax payments that helped keep the budget on track for the lowest annual deficit in six years.

The Treasury Department said Monday that April’s surplus totaled $106.9 billion, down slightly from last April’s $112.9 billion surplus. The government typically runs a surplus during April, when individual tax returns are due and corporations make quarterly tax payments.

Through the first seven months of the 2014 budget year, which began Oct. 1, the deficit totals $306.4 billion. That’s down 37 percent from the same period last year.

The Congressional Budget Office is forecasting a deficit of $492 billion for the full budget year. That would be the narrowest gap since 2008.

In 2008, the government recorded a deficit of $458.6 billion, which was the deficit up to that time. But that record was soon eclipsed as the government ran annual deficits surpassing $1 trillion for the next four years. Those deficits reflected a deep recession. The downturn reduced tax revenue and increased government spending to stabilize the financial system and pay benefits for people who had lost jobs.

So far this budget year, revenue totals $1.74 trillion, up 8.2 percent from the same period in 2013. Revenue has been boosted by a stronger economy, which means more people working and paying taxes, thereby reducing the deficit.

Government spending totals $1.6 trillion, down 8.2 percent from a year ago. The decline reflects efforts by Congress and the administration to trim spending.

After peaking at $1.4 trillion in 2009, the deficit has been falling. Last year, it dropped to $680.2 billion. Over the next decade, CBO is projecting that the deficits will total $7.6 trillion, $286 billion less than it projected in February. The biggest factor is $165 billion less in projected spending on health insurance subsidies for policies sold through exchanges created by the Affordable Care Act.

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