WASHINGTON – The U.S. budget deficit for 2015 has fallen to its lowest level in eight years, spurred by gains in tax revenue that outpaced greater government spending.
The Treasury Department said Thursday that the deficit in the just-completed 2015 budget year fell to $439 billion from $483 billion in 2014. It is equal to 2.5 per cent of the economy, the smallest proportion since 2007, and below the average of the past 40 years.
The latest figures coincide with intensifying budget battles in Washington. Congress and the White House face an early November deadline to raise the nation’s borrowing limit. Lawmakers are seeking a separate agreement with the Obama administration on a budget to keep the government open past a Dec. 11 deadline.
The past few years’ dwindling budget gaps are a sharp contrast to the ballooning deficits that emerged during the Great Recession. Government spending surged and tax revenue sank as 9 million Americans lost jobs, the number of people relying on unemployment benefits and other social programs soared and banks and automakers needed bailouts.
Those trends raised annual deficits above $1 trillion for the first four years of Obama’s presidency. In 2009, the deficit equaled nearly 10 per cent of the economy, the largest proportion since World War II.
Since then, a slowly improving economy and annual spending caps agreed to in a 2011 budget deal have steadily reduced the deficit.
Roughly 2.8 million jobs were added in the 12 months that ended in September. Corporate profits also rose, boosting the government’s tax receipts.
Revenue rose 8 per cent in 2015 to $3.25 trillion. Spending increased 5 per cent to $3.69 trillion.