Fed budget deficit narrows to $80B in December

WASHINGTON (AP) — The federal budget deficit narrowed slightly in December compared to a year ago, but the deficit for the entire year is still on pace to exceed $1 trillion.

The government ran a deficit of $80 billion last month, down 12.4 percent from the previous December, the Treasury Department said today. Through the first three months of the current budget year, the deficit totals $370.8 billion, an improvement of 3.1 percent from the same period a year ago.

Private economists expect that the tax-cut package signed into law last month will lead to a much larger deficit while also helping to boost economic growth.

The tax package provided a one-year reduction in Social Security taxes for individuals and accelerated tax breaks for businesses that invest in new equipment. It also extended for two years Bush-era tax cuts.