U.S. Treasury Lowers Net Borrowing Forecast

The U.S. Treasury on Monday reduced its net borrowing estimate for the third quarter by two-thirds, to $30 billion, because tax revenue has been greater than expected.

The borrowing estimate for the quarter compares with the $89-billion forecast in May.

All categories of tax receipts have come in higher than forecast, according to charts distributed by the Treasury.

The White House recently cut its budget-deficit forecast for fiscal 2006 to $296 billion from $423 billion. But some analysts warn that tax receipts probably will slow as the economy cools.

“The bottom line is there will be less tax growth going forward and pretty steady expenditures,” said George Goncalves, a bond strategist at Banc of America Securities in New York.

The Treasury estimated that it would borrow a net $104 billion in the fourth quarter.

The budget deficit probably will expand to $330 billion in the fiscal year ending Sept. 30, 2007, as the government spends more to clean up from last year’s hurricanes and to fund continued fighting in Iraq and Afghanistan, Goncalves said.

Total U.S. public debt outstanding was $8.42 trillion at the end of June.