WASHINGTON — The federal budget deficit fell this year to its lowest level since President Obama took office, his administration reported Thursday, a change propelled by an increase in tax receipts amid 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 in a report. The shortfall represents 2.5 percent 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 statement released with the figures. The deficit ballooned to $ 1.4 trillion in 2009, in part because of stimulus spending during the recession.
Government receipts rose by 8 percent over the last year, the report said, which “can be attributed to a stronger economy.” Rising wages drove up collections of individual and payroll taxes, and higher corporate profits led to an increase in business income tax receipts. Also, fees and payments under the Affordable Care Act that took effect in 2015 helped increase federal collections.
The administration cheered the figures as vindication of Mr. Obama’s economic policies and as proof of the resurgence he set in motion after taking office during the depths of the recession.
But the good news 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 administration is also trying to garner support to raise the debt limit before Nov. 3, the date when Mr. Lew said the government would exhaust its ability to borrow.
Mr. Lew, in a letter to lawmakers hours before the deficit numbers were released, moved up by two days his initial estimate of when the statutory borrowing limit would be reached. By Nov. 3, he said, the government would have to resort to “extraordinary measures” to meet federal obligations.
Fiscal hawks called the deficit numbers a positive sign, but they cautioned that the improvement would probably be fleeting. 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 Thursday’s report “good news,” adding, “Now the bad news: This may well be the lowest it will be for a long time.”
NYT > Economy