Budget deficit falls to 8-year low on boost in tax revenue

What stands out here, outside of the total deficit accumulation of the last decade (and decades), is that the deficit as a percentage of Gross Domestic Product (GDP) was below the recent averages at only about 2.5% of GDP for 2015 – down from 2.8% in 2014. Receipts of individuals’ taxes rose 6% and corporate receipts climbed 10% in the year.

Since then, a slowly improving economy and annual spending caps agreed to in a 2011 budget deal have steadily reduced the deficit. As a share of the economy, the deficit is 2.5%, smaller than at any time since 2007, the Treasury Department said. Defense spending was down 2.3% at $591.4 billion.

The Treasury said wage and salary growth made individual and payroll tax collection strong throughout the year.

The deficit came in at $144 billion, or 25 percent, less than the estimate in President Obama’s 2016 budget. Corporate receipts climbed on growth in taxable profits.

Government expenditures grew 5 percent to $3.7 trillion, partly due to spending increases in Medicare, Medicaid and Social Security programs, the Treasury noted.

The economic data comes on the same day that Treasury Secretary Jack Lew – George Osborne’s American counterpart – told Congress that the U.S. could exhaust its borrowing capacity by November 3, two days earlier than was previously estimated.

Separately, federal government funding will expire on December 11.

A few Republicans oppose a condition-free increase in the debt limit, but outgoing House Speaker John Boehner has pledged not to let the USA default on its obligations.

The United States budget deficit for 2015 has fallen to its lowest level in eight years, spurred by gains in tax revenue that outpaced greater government spending.

The Congressional Budget Office, meanwhile, has warned that deficits will rise again beginning in fiscal 2017 if current laws don’t change.

For the month of September, the government posted a $91.1 billion surplus, narrower than the $105.8 billion surplus a year earlier.