U.S. deficit down to $680B, lowest in 5 years
WASHINGTON - The United States posted its smallest budget deficit in five years as employment gains and higher taxes propelled revenue to a record, while spending fell by the most since the Eisenhower administration.
Outlays exceeded receipts by $680.3 billion in the 12 months ended Sept. 30, the narrowest gap since 2008, compared with a $1.09 trillion shortfall in fiscal 2012, the Treasury Department said Wednesday in Washington.
Stronger hiring has helped shrink the deficit as a share of gross domestic product by more than half in the last four years, narrowing it from a record $1.42 trillion in 2009. Bolstering revenue this year were higher payroll taxes Congress allowed in January, while spending has been restrained by across-the-board cuts known as sequestration.
Revenue jumped to an all-time high of $2.77 trillion compared with $2.45 trillion in 2012. Spending totaled $3.45 trillion, a decline from $3.54 trillion a year earlier.
The 2.4 percent drop in annual spending last fiscal year was the steepest since 1955, according to Treasury data compiled by Bloomberg News.
The Treasury said the 2013 deficit amounted to 4.1 percent of GDP, down from 10.1 percent in 2009.
A short-term shrinkage of annual budget deficits isn't enough to reverse the 25-year growth of U.S. debt that requires Congress to choose among spending cuts, tax increases or a combination of both.
The CBO estimates rising spending on Medicare and Social Security will widen the deficit to 6.5 percent of GDP in 2038, greater than any year between 1947 and 2008.