WASHINGTON (AP) — The U.S. government ran a much smaller deficit through the first two months of the budget year than last year, signaling further improvement in the nation's finances.

The Treasury Department says the gap between revenue and spending for November was $135.2 billion. That's 21.4 percent lower than November 2012.

Through the first two months of the budget year, which begins on Oct. 1, the deficit totals $226.8 billion — 22.7 percent lower than the same period a year ago.

Higher tax rates and a better economy have boosted revenue, while spending has slowed. Those trends led to an annual deficit of $680 billion in the 2012 budget year, the lowest deficit in five years. Private economists predict the annual deficit this year will fall further, to around $600 billion.

Meanwhile, Congress' budget office estimates that the just-announced budget deal would increase the deficit over the next two years by $41.4 billion.

The analysis also says the deal would save taxpayers $23 billion, when calculated over the coming decade. But there's a cost when it comes to deficits.

The budget office says the bipartisan agreement would increase the deficit by $23.2 billion in 2014 and by $18.2 billion the year after that.

The deal permits $63 billion in relief from automatic spending cuts over the coming two years and substitutes $85 billion in longer-term savings and fee proposals over the coming decade.

That framework has drawn the ire of some conservatives.

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