Washington ? The government’s explosive borrowing has hit a turning point: It’s expected to drop 18 percent this year after last year’s record high.

The brighter picture is due to higher tax revenue and less government spending as the economy has improved.

The Obama administration still expects this year’s deficit to set another high: $1.56 trillion. Even if, as expected, that number declines a bit when the administration issues a revised estimate this summer, it isn’t likely to drop below $1.4 trillion. That would match last year’s all-time record.

The stronger economy is boosting federal tax revenue and lowering emergency spending needed to stabilize the financial system and invigorate the recovery. As a result, the Treasury Department has trimmed its estimated borrowing needs for this budget year to $1.459 trillion. That’s down 18.3 percent from last year’s record $1.786 trillion.

Because of the drop, Treasury said Wednesday it’s reducing its borrowing amount at its quarterly auction to $78 billion in a series of three debt auctions next week. That’s down from a record $81 billion at the last quarterly action in February.

It marks the first decline in the amount the government plans to borrow at a quarterly auction since May 2007. Many economists view it as a watershed event, indicating that the high point for Treasury’s debt demands had passed.

“The government still needs boatloads of money, but at least borrowing has peaked,” said Mark Zandi, chief economist at Moody’s Analytics.

The deficit, along with the nation’s $14.3 trillion debt ceiling, have become political challenges for the Obama administration and lawmakers on Capitol Hill. Public outcry over both nearly sank the health care overhaul. Lawmakers have been under pressure to show more fiscal responsibility with every legislation under consideration.

A presidentially appointed deficit commission is scheduled to report by year’s end on what spending cuts or higher taxes, or both, are needed to control future deficits. In addition, lawmakers have adopted rules requiring new non-emergency spending to be offset by tax increases or spending cuts.

A reduction in borrowing could help ease some concerns. But it hardly signals an end to the problems.

The deficit soared to $1.4 trillion last year. Private analysts say it will be around that level this year, too. The administration expects the deficit for 2011 to decline only slightly to $1.227 trillion.

In fact, the administration doesn’t see the budget deficit falling below $706 billion for any year over the next decade. That means the government would pile up an additional $8.5 trillion in debt over that time that would have to be financed.

The administration has stressed it recognizes the need to reduce future deficits and is committed to reducing the deficit, as a percentage of the economy, to 3 percent over the next five years. That would be down from 10 percent of GDP this year.

So far, the government has been able to pay low interest rates on the borrowing it has done because foreign investors still see U.S. Treasury securities as a haven in times of turmoil.

The deep global recession has also meant less competition for loans by businesses and consumers. That’s helped keep rates low.

So have the Federal Reserve’s steps to push rates to record lows to stimulate growth.

“All the factors that have helped to keep U.S. rates low from the bad economy to a global flight to quality will start to reverse over the next year,” Zandi said. “When they do, if we haven’t appreciably changed our fiscal outlook by then, investors will begin to grow nervous and start demanding dramatically higher interest rates to hold our debt.”