The federal deficit fell to $483 billion for fiscal 2014, the Treasury Department reported Wednesday, the lowest total since 2008.
The Treasury’s official deficit number, which applies to the fiscal year that ended Sept. 30, was slightly lower than the estimate of $486 billion provided by the Congressional Budget Office earlier in the month and was down from the $680 billion total in 2013.
“The President’s policies and a strengthening U.S. economy have resulted in a reduction of the U.S. budget deficit of approximately two-thirds – the fastest sustained deficit reduction since World War II,” said Treasury Secretary Jack Lew in a statement announcing the deficit results.
The 2014 deficit was just 2.8 percent of national output, the lowest share since 2007, the year before the financial crisis struck. The annual deficit increased from $459 billion in 2008 to $1.4 trillion in 2009 before dropping rapidly in 2013 and 2014.
At below 3 percent of gross domestic product, last year’s deficit was below the 40-year average of budget shortfalls for the U.S. It was also near the level that budget experts view as consistent with stable debt. Nevertheless, at 74 percent of GDP the federal debt has doubled since before the financial crisis.
The CBO projects that the deficit will continue to shrink in fiscal 2015 and that the total debt load will shrink as a share of GDP as economic growth picks up. But deficits are expected to near $1 trillion again by 2024, pushing the debt up toward 80 percent of GDP.
The improvement in the 2014 deficit was mostly due to growth in receipts. Total receipts were up 9 percent in the year, an increase that reflected both the effects of tax increases and economic growth.
Total spending was up 1 percent, meaning that government outlays fell in inflation-adjusted terms.
