US budget deficit falls to $439b, lowest in 8 years

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US budget deficit falls to $439b, lowest in 8 years
The US budget gap is equal to 2.5 per cent of the economy, the smallest proportion since 2007, and below the average of the past 40 years.

Washington - Revenue up 8% in 2015 at $3.25t, spending 5% at $3.69t

By AP

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Published: Sat 17 Oct 2015, 12:00 AM

Last updated: Sat 17 Oct 2015, 2:00 AM

The US budget deficit in 2015 fell to its lowest level in eight years, spurred by gains in tax revenue that outpaced greater government spending.
The Treasury Department said on Thursday that the deficit in the just-completed 2015 budget year fell to $439 billion from $483 billion in 2014. It is equal to 2.5 per cent of the economy, the smallest proportion since 2007, and below the average of the past 40 years.
The latest figures coincide with intensifying budget battles in Washington. Congress and the White House face an early November deadline to raise the nation's borrowing limit. Lawmakers are seeking a separate agreement with the Obama administration on a budget to keep the government open past a December 11 deadline.
The past few years' dwindling budget gaps are a sharp contrast to the ballooning deficits that emerged during the Great Recession. Government spending surged and tax revenue sank as nine million Americans lost jobs, the number of people relying on unemployment benefits and other social programmes soared and banks and automakers needed bailouts.
Those trends raised annual deficits above $1 trillion for the first four years of Obama's presidency. In 2009, the deficit equalled nearly 10 per cent of the economy, the largest proportion since World War II.
Since then, a slowly improving economy and annual spending caps agreed to in a 2011 budget deal have steadily reduced the deficit. It has declined for six straight years when measured as a per centage of the economy. Roughly 2.8 million jobs were added in the 12 months that ended in September. Corporate profits also rose, boosting the government's tax receipts.
Revenue rose eight per cent in 2015 to $3.25 trillion and spending five per cent to $3.69 trillion.
Americans paid six per cent more in income and Social Security taxes in 2015 compared with a year earlier. Corporate tax receipts rose 7.2 per cent. Health care programmes drove some of the largest increases in spending. Medicaid, which pays for health services for the poor, reported expenses of $350 billion, 16 per cent higher than in 2014. Much of that increase was attributable to greater enrollments under the Obama administration's health care reforms.
Education spending jumped $30 billion, or 51 per cent, driven by an increase in the financing of student loans.



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