Monitor: U.S. budget deficit shrinking

BOSTON, Feb. 21 (UPI) -- The U.S. budget deficit is shrinking, despite continuing Iraq and Afghanistan war costs, a newspaper analysis said Wednesday.

Tax revenues are rising much faster than spending, with the budget deficit about 1.4 percent of the nation's gross domestic product, well below the 2.3 percent norm since 1970, The Christian Science Monitor reported.

"At the current pace, the budget could move back into surplus as early as May 2008," economist Michael Darda of MKM Partners in Greenwich, Conn., wrote in a report to clients last week.

Other economists disagree with Darda's optimism.

"It's unlikely that we're going to see a balanced budget anytime in the near or long term," Moody's Economy.com senior economist Mark McMullen in West Chester, Pa., said.

The Bush administration and the nonpartisan Congressional Budget Office both show a budget surplus by 2012, the newspaper said.

The shift reflects a strong economy, with higher incomes and corporate profits generating a bigger flow of tax revenue, the Monitor said.