Higher taxes keep federal deficit in check

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The federal government notched its 31st straight month in the red in April, though individual income tax receipts are “significantly” higher than expected and made the deficit smaller than it otherwise would have been, the Congressional Budget Office said Friday.

With the economy looking stronger than expected, income tax receipts are up 26 percent, or $130 billion, over 2010 at this point, the CBO said, calling the inflow “the result of increased amounts withheld from paychecks and strong growth in payments accompanying 2010 tax returns,” which were due last month.

The better-than-expected tax revenue, which comes despite last December’s tax-cuts deal, has tamped down what would otherwise be a massively exploding deficit.

Still, the April shortfall of $41 billion marks the 31st straight month — going back to the financial crises at the end of the Bush administration — that the government has run a deficit. That’s more than twice as long as the previous record on file, going back to 1980.

Overall, CBO officials said the government is already $871 billion in the red through the first seven months of fiscal year 2011.

The CBO’s figures are estimates. The final numbers will be released by the Treasury Department next week.

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