MercoPress. South Atlantic News Agency

Unexpected drop in US fiscal 2006 deficit

The United Status federal budget dropped to 247 billion US dollars in fiscal 2006, the lowest level in the last four years, announced the Treasury Department. The figure is 22% below the 318.7 billion US dollars of the previous year.

The data comes at a crucial moment for the Republican Party, which according to the latest public opinion polls with just four weeks to the midterm elections when the whole House of Representatives and a third of the Senate seats are at stake, the party figures loosing to the Democrats.

Both expenditure and revenue marked new maximums in the fiscal year ended September 30: revenue increased 11.7% and outlays 7.3%.

The deficit is also far lower that the originally announced by the federal government last February and lower that the estimate of last July. Fiscal 2006 is also the best year since fiscal 2002 when the accumulated deficit reached 159 billion US dollars after four years running of surpluses, a legacy of the Bill Clinton administration.

Since then the US has recorded the three largest deficits in its history including the 413 billion US dollars of fiscal 2004, the highest ever.

However Republican President George Bush argues that the massive tax cuts decided by his administration have helped to cut public debt, stimulate the economy and as a consequence increase fiscal revenue.