Federal Deficit Continues To Shrink

The government’s fiscal year is only two months old and already the budget deficit is showing a marked improvement over last year’s 23-year low.

Red ink in November was $17.3 billion, bringing the total for the first two months of fiscal 1998 to $53.3 billion, down 31 percent from $77.7 billion during the comparable period a year earlier.

However, the Clinton administration still is predicting the 1998 budget shortfall will rise to $58.3 billion from $22 billion in fiscal 1997, which ended Sept. 30.

Robust economic growth in 1997 generated a tax windfall that helped shrink the deficit to the smallest amount since 1974. However, economists believe growth will moderate in 1998. The administration is expected to update its deficit and economic forecasts in about six weeks when it releases its proposed budget for 1999.

In November, revenue totaled $103.5 billion and expenditures, $120.8 billion. The biggest spending categories were Social Security, $30.7 billion; interest on the $5.36 trillion national debt, $26.4 billion; Health and Human Services Department programs, $24.6 billion; and the military, $16.7 billion.