The federal deficit for the fiscal year that ended Sept. 30 totaled $1.089 trillion, about $207 billion smaller than in the previous year but the fourth consecutive deficit of more than a trillion dollars. The government took in $2.449 trillion (15.7 percent of GDP) in Fiscal 2012 and spent $3.538 trillion (22.7 percent of GDP).
The deficit fell to 7 percent of GDP, down from 8.7 percent in Fiscal 2011. The final 2012 figures were released this month by Timothy Geithner, secretary of the Treasury, and Jeffrey Zients, deputy director in the Office of Management and Budget.
They said the deficit declined because of higher government receipts and lower spending, with a strengthening economy partly responsible in both cases. Another factor in the higher receipts was the expiration of certain tax provisions. Other factors in the reduced spending were the expiration or phase-down of stimulus provisions, the end of military operations in Iraq and the continuing drawdown in Afghanistan.
While The Concord Coalition and a number of other nonpartisan groups concerned with the country’s fiscal path say that high deficits are to be expected in the wake of a severe recession, they have urged Washington to develop credible long-term fiscal reforms now that can be phased in as the economy strengthens.
Statement by Secretary Geithner and OMB Deputy Director Jeffrey Zients