Federal deficit falling faster than expected

The federal budget deficit is expected to fall to $642 billion in fiscal year 2013, the lowest level since 2008, according to the Congressional Budget Office.

The study released today cited higher tax revenues and better-than-expected payments from government mortgage giants Fannie Mae and Freddie Mac behind the shrinkage.

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It's a level $200 billion lower than estimates just a few months ago.

The government ran a $1.1 trillion budget deficit last year, capping four years in a row of trillion-dollar deficits during President Barack Obama's first term.

The deficit hit a record $1.4 trillion in 2009 at the height of the economic recession.

While falling debt is never a bad thing, many experts agree it may be short-lived.

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The reason why? Many of the factors cutting into this year's deficit are one-time effects, according to Bloomberg, and don't address the long-term picture.

"Budget shortfalls are projected to increase later in the coming decade … because of the pressures of an aging population, rising health care costs and growing interest payments on the federal debt," the CBO said in its report, according to CNN.

Some deficit hawks say it may even be coming down too fast, stunting economic growth.

The figures were released as the Fed said households were continuing to reduce debt, shedding $110 billion in the first quarter.