The federal deficit is projected to come in this fiscal year $66 billion below earlier forecasts and $100 billion below the last fiscal year, the White House said Friday.
The deficit will drop to $583 billion this year, the lowest level of President Barack Obama’s tenure. It is roughly half of where it was during his first term when there were trillion deficits amid the Great Recession.
Releasing its mid-year review, the Office of Management Budget said that an improving economy led to the lower projected deficit for the current fiscal year, which ends Sept 30.
Economists said the ratio of debt to economic growth is improving. However, lawmakers have been unable to tackle the source of future spending on so-called entitlement programs such as Medicare, that threaten to swap all federal spending in decades ahead if left as is.
“The president believes more can be done, and our top priority must remain accelerating growth while expanding opportunity for all Americans,” said Brian Deese, acting OMB director.
The deficit is projected to fall below 3 percent of economic growth in the following fiscal year, returning to historical levels.
Sen. Jeff Session, R-Al. said the “modest reduction in deficits and debt claimed in the budget are accompanied by significant increases in federal spending.”
The March projections of deficit trajectory were from the president's proposed budget.
The deficit is the difference between what the government takes in with revenue and the much larger amount it spends and owes.
Senate Majority Leader Harry Reid said he welcomed the news but that the numbers could be better if the House passed a rewrite of the nation’s immigration laws.
“But instead of acting to reduce our deficit and create jobs, Speaker Boehner and House Republicans are suing the President,” Reid said. “This disgraceful stunt is a waste of the American taxpayers’ time and money.”