The US trimmed its budget deficit by $83 billion in the first eight months of fiscal 2012, the Treasury reported Tuesday, as income sped up while spending was basically flat.
The deficit in the October-May period was $844 billion, nearly 9.0 percent down from a year earlier, helped by a 5.4 percent increase in tax and other receipts to $1.56 billion.
Spending at $2.41 billion in the eight months was a bare 0.2 percent lower.
The Treasury said that some calendar-based differences to its operations from last year to this masked a larger, $101 billion reduction in the deficit during the period.
On Friday Standard & Poor’s warned that the United States continues to risk a new downgrade of its credit rating due to the political deadlock that is preventing a concerted medium-term plan for cutting the deficit.
In its base-case projections, S&P said the fiscal deficit, as a share of gross domestic product, will decline from 10 percent in 2011 to five percent by 2016.
Even at that level, the deficit-GDP ratio “would still be at the high end of the ranges we use to assess sovereigns’ fiscal performance.”
US trims deficit $83 bn in 8 months
