Federal budget deficit running 19.4 percent below last year

In its monthly budget report, the Treasury Department said Tuesday that the August imbalance came in at $49.98 billion. For the first 11 months of the budget year, the deficit totals $352.6 billion, 19.4 percent below the level of red ink for the same 11 months in 2004.

The government recorded a $24.6 billion surplus in September 2004 that left the total deficit for 2004 at $412.8 billion, a record in dollar terms.

The Bush administration is expecting a surplus for this September as well that will lower this year’s total deficit to a projected $333 billion, down from the $427 billion the administration had forecast last February.

The Congressional Budget Office is also forecasting a surplus for September and an imbalance for all of 2005 of $331 billion. CBO officials said that the impact of Hurricane Katrina will not exceed a few billion dollars for September, with the biggest costs falling in the 2006 budget year, which begins Oct. 1.

Congress has already approved $62.7 billion for rescue and relief efforts with many private analysts forecasting that Katrina will add $100 billion or more to next year’s deficit, which the CBO had estimated before Katrina would decline to $314 billion.

The improvement in this year’s deficit outlook has come from a rebounding economy, which has generated more tax revenue. Tax receipts through the first 11 months of this year total $1.90 trillion, an increase of 13.7 percent from the same period in 2004.

Spending has increased as well, rising by 6.8 percent to total $2.25 trillion through the first 11 months of this budget year.

For August, the $49.98 billion deficit represented an increase from a shortfall of $41.13 billion in August 2004.

The government took in receipts of $155.4 billion in August, a record for that month, while spending $205.4 billion, also a record for August outlays.