WASHINGTON, D.C.: The US budget deficit fell to 2.8 percent of the economy’s output in fiscal year 2014, as government revenues rose sharply, official data showed on Wednesday (Thursday in Manila).
The federal government’s deficit was $486 billion in the fiscal year that ended on September 30, down from $680 billion, or 4.1 percent of gross domestic product, in fiscal year 2013, the Congressional Budget Office said in a preliminary estimate.
The Treasury will publish the actual fiscal 2014 deficit later in October. As a percentage of output the deficit has fallen for five straight years from the peak of the Great Recession, in fiscal 2009, when it swelled to 9.8 percent of GDP.
The large decline in the 2014 deficit was because of a 9-percent increase in receipts, mostly taxes, offset by a modest 1.0 percent rise in spending, according to the CBO, the independent, nonpartisan budget agency of Congress.
Defense spending in particular fell, by 5.0 percent, and outlays for unemployment benefits tumbled 34 percent as an emergency jobless compensation program expired at the end of December 2013.
By contrast, spending on the government’s largest benefits programs, such as Social Security for retirement and Medicare and Medicaid for health care, rose 11 percent.
The mounting costs of those programs, which account for half of federal spending, have long been the focus of pressure on lawmakers to reign in the outlays, but political gridlock in Congress has blocked reforms.
The Republican opponents of Democratic President Barack Obama took control of the
House of Representatives in 2011. Since then they have pushed through spending reductions, notably after forcing a 16-day government shutdown in October as fiscal 2014 got under way.