CBO has released the budget numbers for the first quarter of fiscal year 2007. The deficit was $85 billion, $35 billion less than the first quarter of last fiscal year. Temporary events, not structural factors, mostly explain the difference between this year and last. Hurricane Katrina drove up federal spending last year, and record corporate profits and big gains for high-earners have been pushing up revenues this year, though most analysts expect that surge to end soon. House Budget Chairman Rep. John Spratt (D-SC) commented on the news in CQ ($). “While any report of short-term improvement in the deficit is welcome, the long-term forecast for the federal government’s budget deficit remains troubling,” said House Budget Chairman John M. Spratt Jr., D-S.C. Spratt added, “We must not underestimate the size of the challenge that lies ahead.”