Federal Deficit Falls to Smallest Level Since 2008

http://www.nytimes.com/2014/02/28/business/economy/federal-deficit-falls-to-smallest-level-since-2008.html?_r=0

WASHINGTON — The federal budget deficit fell precipitously to $680 billion in the 2013 fiscal year from about $1.1 trillion the year before, the Treasury Department said Thursday. That is the smallest deficit since 2008, and marks the end of a five-year stretch when the country’s fiscal gap came in at more than a trillion dollars a year.

The report comes days before the White House is expected to release a new budget. Democrats have said that the still-tepid recovery requires government investment along with commitments to reduce deficits in the long term — while also emphasizing the rapidly falling budget gap.

Republicans have long said that Democrats have proven poor stewards of the economy, overseeing a period of sluggish growth and rising debt.

The report, which was a regular update on the country’s finances, underscores the persistence, if not the strength, of the recovery after the worst economic downturn since the Great Depression. Growth in tax revenue accounts for much of the decline in the deficit. But increases in taxes and cuts in federal spending figure strongly too, as does a surprising — and surprisingly long — slowdown in the pace of health-spending growth.