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WASHINGTON (AP) - The federal deficit hit $319 billion for the budget year just ended, down from last year's record red ink though a surge in Katrina-driven spending threatens to drive it up again.
The improvement from the record $413 billion recorded in the 2004 budget year, which the Treasury Department reported on Friday, is largely due to a surge in federal revenues from an improving economy.
The figures were released three days before Congress returns from a recess and commences a struggle to cut $35 billion from federal benefit programs over the next five years to help defray hurricane recovery costs. Friday's deficit figures underscored that even if lawmakers agree to such savings, they would have a barely visible effect on the overall red ink figure.
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