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Federal Deficit on the Decline - 10/28/15

During the most recently completed federal fiscal year, the federal deficit declined to its lowest level since President Obama took office.  For the twenty fifteen fiscal year, the federal budget deficit totaled four hundred and thirty nine billion dollars.  That’s forty four billion dollars less than last year.  These data are supplied by the U.S. Treasury Department and the Office of Management and Budget. 

The latest budgetary shortfall translates into two point five percent of gross domestic product, the lowest share of output since two thousand and seven.  An improving economy has helped.  Government receipts rose by eight percent over the past year.  Though wages are not rising rapidly in America, they rose by enough to drive up collections of individual and payroll taxes.  It helps that for much of the past year, job growth has been more than respectable.

Higher corporate profits also pushed tax collections higher, as did fees and payments that took effect in twenty fifteen as a result of the Affordable Care Act.  While the shrinking deficit is broadly viewed as a positive indicator, many analysts worry that the current trend won’t last.  The Congressional Budget Office projects that deficits will begin to rise again in twenty seventeen.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.