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

The U.S. budget deficit fell to an eight-year low in fiscal 2015 as a strengthening economy helped generate more tax revenue. 

The gap fell to $439 billion, from $483 billion 2014, the lowest since 2007, the Treasury Department and Office of Management and Budget (OMB) reported on Thursday. 

{mosads}The latest figure represents 2.5 percent of the economy’s size, which also is the best showing since 2007 and less than the average over the past 40 years. 

The joint report said that the increase in revenue “can be attributed to a stronger economy.” Employment has increased by nearly 3 million jobs over the past year, and the jobless rate has continued to drop. 

“We need to stay focused on strengthening our economy, which means passing a long-term budget that fully funds the government and reverses the harmful cuts known as sequestration to allow for critical investments in both our economic and national security,” OMB Director Shaun Donovan said.

Tax revenue increased 8 percent, to $3.25 trillion, and spending was up to $3.69 trillion, a pickup of 5 percent. 

On Oct. 7, the Congressional Budget Office estimated the deficit at $435 billion for 2015.

The deficit came in at $144 billion, or 25 percent, less than the estimate in President Obama’s 2016 budget. The fiscal year ended Sept. 30.

Budget deficits topped $1 trillion from 2009 through 2012 as the economy recovered from the financial crisis. 

The figures were released ahead of two major fiscal battles coming for Congress: a Nov. 3 deadline to raise the debt ceiling and a Dec. 11 deadline to provide funding to keep the government open.

Earlier Thursday, the Treasury Department moved the previous deadline for raising the $18.1 trillion borrowing cap up from Nov. 5.