The nation shrunk its budget deficit during the first eight months of 2013 as government spending declined overall.
This was equally true when it came to government spending on housing and financial services programs, including the Troubled Asset Relief Program (TARP), Fannie Mae, Freddie Mac and the Federal Housing Administration. All of these programs and agencies leaned less on government funds during the eight-month period, according to the CBO report.
The latest numbers from the Congressional Budget Office show the federal government recorded a budget deficit of $627 billion from October 2012 through May 2013 – the first eight months of fiscal year 2013.
That’s a significant $220 billion drop from the budget shortfall recorded a year earlier and reflective of a system that is spending less in certain areas while simultaneously experiencing a 15% increase in federal revenue.
Spending on housing-financial services related programs accounted for some of the reductions in the overall deficit, the CBO suggested.
Spending outlays linked to TARP – a program designed to aid failing financial institutions in the wake of the housing crisis – fell by $33 billion. This change resulted from budget adjustments, which pushed TARP spending higher in 2012 while reducing it in fiscal 2013.
Payments to Fannie Mae and Freddie Mac also came in $25 billion under year ago levels, the CBO said, while spending by the Federal Housing Administration fell by $6 billion as the agency increased insurance premiums.
While the Treasury made more payments to the GSEs than it received in 2012, that trend was reversed in the early part of fiscal 2013.
For the entire 2013 fiscal year, CBO now forecasts a budget deficit of approximately $642 billion total.
Other spending reductions included a $28 billion drop in defense spending and a $17 billion decline in outlays for unemployment benefits.