The federal budget deficit narrowed slightly in December from a year earlier, but the deficit for the entire year is still on pace to exceed $1 trillion.

The government ran a deficit of $80 billion last month, down 12.4 percent from the previous December, the Treasury Department said Wednesday. Through the first three months of the current budget year, the deficit totals $370.8 billion, an improvement of 3.1 percent a year earlier.

Private economists expect that the tax-cut package signed into law last month will lead to a much larger deficit while helping to boost economic growth.

The tax package provided a one-year reduction in Social Security taxes for individuals and accelerated tax breaks for businesses that invest in new equipment. It also extended for two years Bush-era tax cuts.

The estimated cost of the package is $858 billion, an amount that will be added to deficits over the next two budget years.

Economists at Goldman Sachs are forecasting that the deficit for the 2011 budget year, which began Oct. 1, will total $1.3 trillion, giving the country a third consecutive year of $1 trillion plus deficits.

Through the first three months of the fiscal year, government receipts total $531.8 billion, 9 percent higher than a year earlier. That reflected higher individual and corporate tax payments, a sign that the economy is gaining strength.

Government spending in this period totaled $902.6 billion, up 3.1 percent from a year earlier.

The 2010 deficit was $1.29 trillion and followed an all-time high of $1.41 trillion in 2009. The government spent billions of dollars in that period to stabilize the financial system and try to jump-start the economy after the recession hit.