WASHINGTON – A new report says the US government's budget deficit is set to fall to $514 billion for the current year, down substantially from last year and the lowest by far since President Barack Obama took office five years ago. The Congressional Budget Office report credits higher tax revenues from the rebounding economy and sharp curbs on agency spending as the chief reason for the deficit's short-term decline. But CBO sees the long-term deficit picture worsening by about $100 billion a year through the end of the decade because of slower growth in the economy over the coming decade than it had previously predicted. Last year's deficit registered $680 billion. Obama inherited an economy in crisis and first-ever deficits exceeding $1 trillion. A new report says the US government's budget deficit is set to fall to $514 billion for the current year, down substantially from last year and the lowest by far since President Barack Obama took office five years ago. Congressional Budget Office on Tuesday reduced its estimate of the US budget deficit for the current fiscal year but said sluggish economic growth and stubbornly high unemployment will cause the improvement to be short-lived. The CBO said the deficit will fall to $514 billion in the fiscal 2014 year ended Sept. 30, down from its previous estimate of $560 billion and a fiscal 2013 deficit of $680 billion. The deficit will decline to $478 billion in fiscal 2015, but start to grow thereafter as the economy continues to struggle with an unemployment rate that fails to fall below 6.0 percent until late 2016. The number of workers who are not participating in the labor force also will remain historically high, holding down revenue gains. President Barack Obama's signature healthcare law will contribute to this phenomenon, CBO said, citing new estimates that the Affordable Care Act will cause a larger than-expected reduction in working hours - eliminating the equivalent of about 2.3 million workers in 2021 versus a previous estimate of an 800,000 decline. – Agencies
