The federal budget deficit has fallen to its lowest level since 2009 on increased tax receipts due to a strengthening economy.
The deficit was $439 billion in the 2015 fiscal year, $44 billion less than last year, the Treasury Department and the Office of Management and Budget said Friday. The shortfall represents 2.5% of the economy, the lowest share since 2007.
“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,” Treasury Secretary Jacob J. Lew said in a press release.
Government receipts rose by 8% over the last year, as rising wages drove up collection of individual and payroll taxes and higher corporate profits fueled an increase in business income tax receipts.
“We need to stay focused on strengthening our economy, which means passing a long-term budget that fully funds the government and reverses the harmful cuts known as sequestration to allow for critical investments in both our economic and national security,” OMB Director Shaun Donovan said.
Donovan’s comments came amid uncertainty over whether the White House would be able to strike a budget deal with Republicans to keep the government functioning beyond a December deadline, The New York Times said. The administration is also trying to garner support to raise the debt limit before Nov. 3, when Lew said the government would exhaust its ability to borrow.
The improved deficit numbers may be fleeting as the Congressional Budget Office has projected that deficits will begin to rise again in 2017 if fiscal policies are not overhauled.
Maya MacGuineas, the leader of the Campaign to Fix the Debt, called Friday’s report “good news,” adding, “Now the bad news: This may well be the lowest it will be for a long time.”