The USA budget deficit fell to an eight-year low in fiscal 2015 as a strengthening economy helped generate more tax revenue.
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The government’s deficit, which is a measure of how much the government has spent against what it raised in taxes, shrunk to $439bn (£283.6bn) in the 12 months to the end of September, from $483bn in the same period a year ago, the Treasury Department said.
What stands out here, outside of the total deficit accumulation of the last decade (and decades), is that the deficit as a percentage of Gross Domestic Product (GDP) was below the recent averages at only about 2.5% of GDP for 2015 – down from 2.8% in 2014.
The deficit came in at $144 billion, or 25 percent, less than the estimate in President Obama’s 2016 budget.
The US Congress and the White House have been discussing a two-year budget deal and need to reach an agreement before December 11, when the current short-term funding will expire.
However these annual yearly finances deficits continue to compound, with the whole national debt now $18.1 trillion, $7.5 trillion greater than when Obama took workplace.
“Under the president’s leadership, the deficit has been cut by roughly three-quarters as a share of the economy since 2009 – the fastest sustained deficit reduction since just after World War II”. Accounting for calendar adjustments, the 2015 fiscal year deficit was $445 billion. Corporate profits also rose, boosting the government’s tax receipts.
Government expenditures grew 5 percent to $3.7 trillion, partly due to spending increases in Medicare, Medicaid and Social Security programs, the Treasury noted. Defense spending was down 2.3% at $591.4 billion. The Congressional Budget Office warns that “the long-term outlook for the federal budget has worsened dramatically over the past several years” because of the recession, an aging population and increasing health care costs.
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Lew’s warning comes as closely held talks on the budget have yielded little evidence of progress.
