Federal Deficit For 2007 Will Be Lower

WASHINGTON (AP) _ The federal deficit for 2007 will be somewhat lower than it was last year, ``but the budget outlook for the long term remains daunting,'' the Congressional Budget Office reported

Thursday, August 23rd 2007, 9:50 am

By: News On 6

WASHINGTON (AP) _ The federal deficit for 2007 will be somewhat lower than it was last year, ``but the budget outlook for the long term remains daunting,'' the Congressional Budget Office reported Thursday.

The deficit for the fiscal year that ends Sept. 30 will be about $158 billion, or $90 billion less than the deficit recorded for 2006, the nonpartisan agency reported. The revised figure is about $19 billion below the deficit the CBO projected for fiscal 2007 on March 1.

Higher-than-expected tax revenues are the main reason for the improved numbers, CBO said.

``The long-term fiscal outlook continues to depend primarily on the future course of health care costs,'' the office said in its new report. It said economic growth slowed during the second half of 2006 and early 2007, ``and financial markets experienced significant turbulence during the summer of 2007.''

``Although there is some risk that problems in the housing market and disruptions in financial markets may spread and impair economic growth,'' CBO said, ``the most likely scenario is that economic performance will remain sound.''