January deficit fell sharply to $27 billion: CBO. [Reuters] – The budget deficit shrank by nearly half in January compared to a year earlier as tax collections from individuals rose and outlays fell, the Congressional Budget Office said on Tuesday. The CBO said it expects the Treasury Department to report a $27 billion deficit for January, versus a $50 billion deficit in January 2011. The January budget gap will bring the total deficit for the first four months of fiscal 2012 to $349 billion, a decrease of about $70 billion from the same period of fiscal 2011.