The Treasury Department released data on Wednesday revealing that the U.S. budget deficit for the last fiscal year was cut nearly in half, the lowest its been in five years. The improved book balancing was due to a combination of tax increases, spending cuts and a strengthening economy, Reuters reports. The deficit for the fiscal year, which ended on Sept. 30, came in at $680 billion, nearly a third lower than predicted by the White House earlier this year.
The New York Times notes the news marked “a significant turnaround for the nation’s books after four straight post-recession years in which annual deficits exceeded $1 trillion each.” The Treasury Department said in a statement that higher taxes accounted for 80 percent of the reduction. The news comes as Congress embarks on another round of budget negotiations. Here’s more on what’s next, from Reuters:
The budget figures were released as U.S. lawmakers launched a new round of budget talks on Wednesday with pledges to work toward easing automatic government spending cuts. They drew familiar partisan battle lines over boosting tax revenues to help pay for that.
The 29-member congressional negotiating panel, commissioned under this month's deal to end a government shutdown and lift the federal debt limit, has until December 13 to agree on a plan that would at least reduce the effects of $109 billion in spending cuts looming in 2014.