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News Summary: Gov't finances improve in short term

The Associated Press

SHRINKING DEFICIT: The federal budget deficit will drop to $845 billion this year after topping $1 trillion for four straight years, the Congressional Budget Office projects. It expects deficits will shrink to $430 billion by fiscal 2015.

LOWER BORROWING: Government borrowing has dropped to roughly 25 cents for every dollar it spends, from over 40 cents per dollar a few years ago. Tax receipts are rising and spending is moderating.

LONG-TERM PROBLEM: But without higher taxes, changes in the big benefit programs like Medicare, Medicaid and Social Security, cuts in other government services or a combination of the three, the CBO says deficits by the end of the decade will again be in the $800 billion range.