U.S. deficit on track to hit 5-year low

The Congressional Budget Office forecasts the annual deficit

The Congressional Budget Office forecasts the annual deficit will be $670 billion when the budget year ends on Sept. 30. (Credit: iStock)

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The federal government Thursday reported a rare surplus of $116.5 billion in June, the largest for a single month in five years. The gain kept the nation on track for its lowest annual deficit in five years.

The June surplus was due in part to $66.3 billion in dividend payments from Fannie Mae and Freddie Mac. The mortgage giants were taken over by the government at the height of the 2008 financial crisis and are now repaying taxpayers.

Through the first eight months of the budget year, the deficit has totaled $509.8 billion, according to the Treasury. That's nearly $400 billion lower than the same period last year.

The Congressional Budget Office forecasts the annual deficit will be $670 billion when the budget year ends on Sept. 30. If correct, that would be well below last year's deficit of $1.09 trillion and the lowest since President Barack Obama took office. It would still be the fifth-largest deficit in U.S. history.

The government has collected $2.09 trillion in revenue so far this budget year, according to the June report. That's 14 percent more than the first eight months of the previous budget year.

It has spent $2.6 trillion so far, nearly 5 percent less than the same stretch last year.

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