The deficit for fiscal 2015 was $435 billion, the smallest shortfall since 2007, the Congressional Budget Office estimated Wednesday.
The annual deficit was $48 billion smaller than in fiscal 2014, the budget office said in its monthly budget review.
The improvement was driven by revenue growth of roughly 8 percent, which outstripped spending growth of 5 percent. The government took in $3.249 trillion and spent $3.685 trillion.
The deficit is the smallest of President Obama’s tenure and the smallest since before the recession officially began at the end of 2007. The financial crisis, and the government’s response, pushed up annual deficits to above $1 trillion from 2009 to 2012.
Now, the deficit is below the 50-year average, as a share of economic output.
The biggest increase in revenue over the year was $115 billion in taxes withheld from workers’ paychecks, attributable to growing wages, according to the CBO.
Spending growth was greatest for federal entitlement programs, including health insurance through Medicare and Medicaid as well as Social Security.
The bailed-out mortgage businesses Fannie Mae and Freddie Mac also sent $51 billion less to the Treasury, a drop-off that counts as an increase in spending in government accounting.
The government also recorded a $18 billion credit writedown on its portfolio of student loans.
In its latest projections, the budget office sees the deficit falling again in fiscal 2016, to $414 billion.
Then, annual shortfalls are expected to grow indefinitely, mostly because of payments through federal entitlements programs for health care and retirement, as well as interest payments on the federal debt.
