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Estimates Show Tax Revenues Lowering Deficit

The federal budget deficit has declined somewhat, according to new numbers released by the Congressional Budget Office. An increase in tax revenues caused the latest 2005 budget projections to cut the estimated deficit by $88 billion.

The nonpartisan CBO said that while the news is welcome, it may not have long-reaching effect. The federal deficit for the year of 2004 was $396 billion. A $308 billion shortfall for 2005, as now estimated, would reflect the positive impact of the $88 billion.

While recent total deficit levels have set records, they are not as large a portion of the U.S. economy as previous shortfalls, in the 1980s and 1990s.

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