U.S. Oct-Dec budget deficit narrows sharply - CBO

WASHINGTON Wed Jan 8, 2014 5:49pm EST

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WASHINGTON Jan 8 (Reuters) - The U.S. government's budget deficit fell by more than a third in the first three months of fiscal 2014 to $182 billion, including a $44 billion surplus in December, the Congressional Budget Office estimated on Wednesday.

The cumulative budget gap for October, November and December was $111 billion below the year-ago-period, continuing a trend of shrinking deficits due to an improving economy and higher tax collections.

Net revenues rose 7.7 percent, or $38 billion, in the October-December period, mostly because of higher social insurance taxes after a temporary reduction expired at the end of 2012, CBO said.

Outlays for the three-month period fell by 7 percent, or $62 billion, as military spending fell $11 billion, unemployment benefits fell $4 billion and net interest on the public debt fell by $7 billion.

Government controlled mortgage finance groups Fannie Mae and Freddie Mac also contributed $34 billion more to the Treasury than during the year-ago period as their net worth improved.

The $44 billion December surplus compares with a $1 billion deficit a year earlier, the CBO said, even though revenues in December 2012 benefited from stronger realization of income by wealthy individuals hoping to avoid tax increases in January 2013.

The U.S. Treasury Department is expected to report official budget figures for December and the first three months of the 2014 fiscal year on Jan. 13.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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