WASHINGTON — The government’s explosive borrowing has hit a turning point: It’s expected to drop 18 percent this year after last year’s record high.
The brighter picture is the result of higher tax revenue and less government spending as the economy has improved.
The Obama administration still expects this year’s deficit to set a record high: $1.56 trillion. Even if, as expected, that number declines a bit when the administration issues a revised estimate this summer, it isn’t likely to drop below last year’s record $1.4 trillion deficit.
The stronger economy is boosting federal tax revenue and lowering emergency spending needed to stabilize the financial system and invigorate the recovery. As a result, the Treasury Department has trimmed its estimated borrowing needs for this budget year to $1.459 trillion. That’s down 18.3 percent from last year’s record $1.786 trillion.
Because of the drop, Treasury said Wed nesday it’s reducing its borrowing amount at its quarterly auction to $78 billion in a series of three debt auctions next week. That’s down from a record $81 billion at the last quarterly action in February.
