Deficit improves to $439 billion, CBO says

The federal budget deficit for fiscal 2014 reached $439 billion by the end of May, the nonpartisan Congressional Budget Office reported Friday.

The eight-month total is $188 billion less and is the smallest since President Obama took office.

Revenue for the period was $1.9 trillion and the government spent $2.4 trillion, the CBO estimated.

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Most of the change from last year was due to revenue, which grew by 7 percent. Spending fell by 2 percent.

Revenue is increasing as the amount paid in salary and wages increases along with job growth, and because of the expiration of tax breaks such as the 2 percent payroll tax break that ended in December 2012. The last months of calendar year 2012 are in fiscal 2013.

The largest “spending cuts” reported in the period were actually increased payments from troubled mortgage giants Fannie Mae and Freddie Mac, which have become profitable again. Fannie and Freddie contributed $42 billion more so far this fiscal year.

Defense spending was down $25 billion and spending on disasters and unemployment benefits also fell.

These cuts were partially offset by increases in Social Security benefit payments, which continue their march upward with the aging of the population, and in spending on Medicaid.