US 2013 deficit falls to half of 2009 peak

Agence France-Presse

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The US budget deficit plunged 37.5% in fiscal 2013 to less than half its level 4 years ago on sharp spending cuts and surging revenues

BUDGET DEFICIT. The US budget shortfall plunges to half of 2009's. Photo by AFP/Mladen Antonov

WASHINGTON, USA – The US budget deficit plunged 37.5% in fiscal 2013 to less than half its level 4 years ago on sharp spending cuts and surging revenues, the Treasury said Wednesday, October 30.

The shortfall for the year ended September 30 was $680 billion, down from $1.1 trillion last year and from more than $1.4 trillion in 2009, when the government spent heavily to battle recession.

Receipts rose 13.3%, to $2.77 trillion, helped more by personal income taxes while the corporate tax take lagged forecasts, the Treasury said.

Meanwhile, spending fell 2.4% to $3.45 trillion.

The $84 billion decrease was close to the amount required by the tough sequester spending cuts implemented in March.

Treasury Secretary Jacob Lew used the final data to call on Congress to restrain the next sequester cuts and allow a more expansive budget for the current year, to enhance economic growth, which remains sluggish.

“Under President (Barack) Obama, the nation’s deficit has fallen for the past four years, the fastest pace of decline over a sustained period since World War II,” Lew said in a statement.

“Congress must build on this progress by crafting a pro-jobs and pro-growth budget agreement that strengthens the economy while maintaining fiscal discipline.”

The US piled up huge deficits during and after the crisis, pumping money into teetering financial firms and US auto makers to keep a deep recession from becoming worse.

The figures “show that we are continuing to make significant progress in reducing the deficit,” said the White House’s Office of Management and Budget (OMB).

“As a percent of gross domestic product (GDP), the deficit fell to 4.1%, representing a reduction of more than half from the deficit that the administration inherited when the president took office in 2009.”

The figures came out as Democrats and Republicans in Congress began talks on the next stage of funding the government for the current fiscal 2014, after a three-month stopgap budget was passed earlier this month.

Republicans are seeking more spending cuts, without added tax income, while the White House argues that the sequester, slated to expand in the coming year, is too harsh and damages growth.

“Building on the $2.5 trillion in deficit reduction already locked in, the president’s plan would replace the economically damaging sequester while achieving additional deficit reduction to put federal debt on a downward path as a share of the economy,” the OMB said. – Rappler.com

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