White House projects 2014 deficit dropping to $583B, almost $100B less than last year

WASHINGTON – The White House said Friday that the U.S. government’s budget deficit will drop to $583 billion this year, the lowest level of President Barack Obama’s tenure.

Last year’s deficit was $680 billion. The latest update from the White House budget office is also $66 billion less than the administration predicted earlier this year when releasing the president’s budget.

Obama presided over trillion-dollar-plus deficits during his first term as the economy struggled to recover from a bad recession and financial crisis. Attempts to strike deals with GOP leaders such as House Speaker John Boehner of Ohio have failed, though Obama was successful in muscling through a tax hike on wealthier earners in early 2013. Tight spending on annual agency budgets is also responsible for lower deficits.

The nonpartisan Congressional Budget Office projects an even lower deficit of $492 billion for the budget year ending Sept. 30.

The White House has also lowered its economic growth forecast for the current year to 2.6 per cent, reflecting the unexpected 2.9 per cent drop in gross domestic product in the first quarter of this year. Its earlier prediction was for a 3.3 per cent hike in GDP.

Obama’s March budget release called for a variety of tax increases and promised new help for the working poor and additional money for road-building, education and research. It also pulls back from controversial cuts to government pension cost-of-living increases that had angered Democrats.

The unexpected White House release came as the Treasury Department announced separately that the government ran a surplus of $71 billion for the month of June.