The U.S. budget deficit shrank to $69.6 billion in July from $129.4 billion in the same month almost a year ago. Government rise in receipts and a drop in spending has totaled $184.6 billion in July, up from $159.1 billion a year ago.  Government outlays also fell from $288.4 billion to $254.2 billion.  A drop in spending partly reflected $35 billion in recurring benefit payments made on July 1 theTreasury said.