Federal deficit shows improvement for first half of fiscal 2010

Deficit numbers were brighter behind a $223 billion decrease in spending for the Troubled Asset Program, from $115 billion in spending during the first six months of last year and $109 billion in receipts so far this year, CBO Director Doug Elmendorf wrote on his blog. The amount is negative this year because the Treasury is expected to report a reduction of $114 billion in outlays for TARP in March, “reflecting a significant decline in its estimate of the net costs that will ultimately result from that program’s transactions.”

Revenue during the period was $37 billion lower than 2009 because of a $45 billion decline in payroll taxes due to lower wages. Corporate income tax payments were about 5 percent less. 

With tax day later this week, the next month or so should provide insight into receipts for 2010. 

The smaller deficit also was caused by a $69 billion decline in spending on federal deposit insurance. Spending on government-controlled mortgage lenders Fannie Mae and Freddie Mac decreased by $34 billion during the past six months.