The Congressional Budget Office projected Monday that the federal deficit will fall to $492 billion for fiscal 2014.

At just 2.8 percent of gross domestic product, that would be the smallest budget shortfall as a share of the economy since 2007, and a significant drop from last year's $680 billion deficit. That, in turn, was a sharp decrease from the trillion-dollar-plus deficits that had prevailed since the financial crisis.

The CBO, the official nonpartisan budget scorekeeper for Congress, also expects the deficit to fall further in 2015, to $469 billion, or 2.6 percent of GDP.

From there on to the end of the budget window in 2024, however, the news is not good: Deficits are projected to increase steadily into the range of 4 percent of GDP and again eclipse $1 trillion, as the costs of health care and retirement for an aging population, along with interest payments on the debt, continue to rise and put pressure on the federal budget, cutting into other priorities. Discretionary spending, including spending on national defense and non-entitlement domestic programs, is expected to fall to 5.1 percent of GDP by 2024, down from a historical average of roughly 8 percent over the past few decades.

The long-run outlook is still that the U.S. faces a rising level of debt -- from 72 percent of GDP in 2013 to 78 percent in 2024 -- that the CBO warns "would have serious negative consequences" for the country, including government crowding out of private investment and an elevated risk of financial crises. The debt was just 35 percent of GDP on the eve of the recession at the end of 2007.

Nevertheless, the CBO's projected 10-year cumulative deficits are $286 billion less than projected in February. A large part of that estimated decrease is $165 billion in lower-than-expected spending on Obamacare exchange subsidies, a product of the CBO's updated analysis of premiums and plans offered through the exchanges.

In February, the CBO marked a significant deterioration in the long-run budget outlook, saying that slower economic growth over the next 10 years would lead to $1 trillion in greater deficits because of smaller tax revenues.