WASHINGTON (AP) -- The Treasury Department reports on the federal budget deficit for March. The report will be released Thursday at 2 p.m. Eastern.
SMALLER GAP: The nonpartisan Congressional Budget Office estimates that the deficit narrowed to $36 billion in March from $107 billion in the same month a year ago.
BETTER JOB MARKET, MORE TAXES: The government is seeing higher tax receipts and spending a bit less. Tax payments by individuals and corporations likely rose 16 percent in March to $215 billion from a year ago, the CBO forecasts. About 2.2 million jobs have been created in the past year and average weekly paychecks have also increased. The increase in income has boosted income tax receipts. Corporate profits have also perked up.
Government spending, meanwhile, fell about 2 percent in March from the previous year to $251 billion, the CBO projects. Spending by the Defense Department fell $7 billion and the cost of unemployment benefits dropped $2 billion. Those declines were partially offset by higher Social Security spending.
HALF-WAY POINT: The government's 2014 budget year began last Oct. 1 and reached its half-way point at the end of March. In the first six months of the budget year, the deficit likely fell to $413 billion from $600 billion a year ago, the CBO forecasts.
Tax receipts rose 10 percent in the October-March period, the CBO says, while spending fell 4 percent.
President Barack Obama projected last month that the deficit for the full year will drop to $649 billion, down from $680 billion in the previous year.
The CBO is forecasting an even bigger improvement, projecting that this year's deficit will decline to $514 trillion and fall further to $478 billion next year. That would be less than half the $1 trillion-plus deficits that existed for the first four years of Obama's presidency. The deficit rose to a record level of $1.4 trillion in 2009.
But even so, the budget gap remains historically high. And the CBO sees the deficits starting to rise after next year, driven higher by greater spending on Social Security and Medicare as baby boomers retire.
The higher deficits have sparked budget wars between Democrats and Republicans in Washington for the past three years, causing two government shutdowns. But those fights may subside this year following an agreement reached last December on the broad outlines for spending for this year and next.
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