By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — The U.S. government’s budget deficit dropped sharply in fiscal 2013, pushed to its lowest level in five years by record revenues and modestly lower spending.
For the fiscal year that ended on Sept. 30, the deficit was $680 billion, or 4.1% of gross domestic product, the Treasury Department reported. That is the smallest annual shortfall since the $459 billion gap posted in 2008, and 38% below the fiscal 2012 deficit.
The full-year figure includes a surplus of $75 billion for September.
The deficit has fallen mostly due to increased revenues, as well as slightly lower government spending reflecting the across-the-board budget cuts known as the sequester.
Budget receipts hit a record high in fiscal 2013, a Treasury official said. Revenue was $2.8 trillion for the fiscal year, up 13% from 2012.
Receipts of Individual income taxes and corporate taxes both rose 11% in fiscal 2013 compared to a year earlier, a reflection of both higher tax rates enacted in January and the improving economy.
Spending for the full year totaled $3.5 trillion, a decrease of 2%.
The government’s fiscal year runs from October to September.
The full-year deficit is the first of Barack Obama’s presidency to come in below $1 trillion. Deficits have fallen from a peak in 2009, when the U.S. was still struggling from the recession. The budget gap for fiscal 2012 was $1.1 trillion.
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