This got lost in all the Obamacare exchange shuffle, but the federal government posted a $680 billion deficit in fiscal year 2013:
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 late Wednesday. That is the smallest annual shortfall since the $459 billion gap posted in 2008, and 38% below the fiscal 2012 deficit….
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.
Let’s take a closer look at that. On the tax revenue side, the federal government took in $2.774 trillion, which shattered the old record of $2.568 trillion set in 2007 and was $324 billion more than was raked in last year. That $2.774 trillion would have been more than enough to cover spending for any year prior to 2008.
Even though that was a record, it still fell short of expectations. The Congressional Budget Office estimated in May that receipts for FY2013 would be $2.813 trillion thanks to all the tax hikes that kicked in at the beginning of the calendar year. That didn’t exactly pan out as expected, at least by those who don’t believe the Laffer Curve exists.
In terms of GDP, the 16.7% of GDP taken by the federal government was a bit below the 60-year average of 17.3% between 1948 and 2007, but still within the ballpark of ranges over the 60 years prior to the Great Recession.
Thanks solely to the sequester, spending was reduced to $3.454 trillion in 2013, a drop of $83 billion from 2012 and $149 billion from 2011’s record $3.603 trillion. Even so,, not only was it $472 billion more than the pre-Obama record of $2.983 trillion in 2008, the 20.8% of GDP spent by the federal government was nearly 2 full percentage points higher than the 60-year pre-Great Recession average of 18.9% and higher than any year between 1992 and 2008.
The resulting $680 billion deficit is the fifth-highest nominal-dollar deficit in history, behind only the four previous deficits run up by President Barack Obama and Senate Majority Leader Harry Reid. In terms of the percentage of GDP it represents, the 4.1% of GDP deficit for 2013 is more than 2 1/2 times greater than the 60-year pre-Great Recession average of 1.6%, and higher than any year between 1992 and 2008.