Projected lower deficit could slow any budget deal

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Associated Press

Posted on May 15, 2013 at 6:01 AM

Updated Wednesday, May 15 at 7:01 AM

WASHINGTON (AP) — There's some good news on this year's budget deficit: It's now projected to come in well below what was estimated just a few months ago.

But for deficit hawks it's bad news because it could further curb the already slowing momentum for a budget deal this year.

A Congressional Budget Office study released Tuesday predicts a 2013 budget deficit of $642 billion, more than $200 billion below its February estimate.

While the recovering economy is producing greater revenues, the improving deficit picture also reflects the accumulating effects of prior rounds of spending cuts — mostly tamping down day-to-day agency budgets — and January's tax hike on wealthier earners.

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