The federal budget deficit: It’s shrinking.

Lost in the chatter about President Barack Obama’s behind-schedule delivery of his annual budget was this word from the U.S. Treasury: The federal deficit for the first six months of the fiscal year (October 2012-March 2013) was $600 billion, a whole lot less than the $779 billion recorded for the same months of the previous year. Revenues are running 12.5% ahead of last year; outlays are running 2.5% below last year.

What’s going on? The economy is getting better, and that means more wages and profits to tax and less spending on programs such as unemployment compensation. Meanwhile, Congress and the president have raised taxes — both income and payroll taxes — and put some caps on spending.

“The deficit,” economists at Goldman Sachs said in a note to clients, “is likely to decline substantially further in the next two to three years… Sequestration has barely started to show up in the outlay data, and the expiration of the Bush tax cuts for high-income earners is likely to reduce tax refunds and boost [tax payments] in early 2014.”