politics

Soaring tax revenue and falling spending drive record low budget deficit

But the deficit was not as small as the $1 trillion White House officials had projected in August, largely due to higher education spending that reflected the student debt cancellation program. of President Joe Biden, which the Congressional Budget Office estimated would cost $400 billion. .

The Biden administration has for months touted the sharp decline in budget deficits as proof that the president’s economic policies are strengthening the economy and improving the fiscal outlook, and has used it to push back against GOP criticism that the president is hoarding money. public debt.

Deficits as a share of the economy fell to 5.5% in the fiscal year that ended Sept. 30, from 12.3% in fiscal 2021, but still higher than in 2019, before the pandemic.

But critics say the administration is taking too much credit for the lower deficit. The Committee for a Responsible Federal Budget attributed the decline entirely to the reduction or expiration of spending programs enacted during the pandemic.

Federal spending fell $550 billion, down 8% from a year earlier, due to lower spending by the Small Business Administration, Department of Labor and Department of Housing and Development urban. It’s a record drop, and the first drop since 2013, when government spending fell by $84 billion, Treasury officials said.

Tax revenue jumped from $850 billion to $4.9 trillion, a 21% increase over last year. Taxes withheld from paychecks jumped 14%, thanks to rising wages and employment.

Unretained revenue rose 37%, partly reflecting the surge in the stock market last year. Business revenue soared 14%, the agency said.

Brian Faler contributed to this report.

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