The age of trillion-dollar deficits is well over. For now. Thanks to a recovering economy, spending restraint and higher tax receipts, the Congressional Budget Office now projects the deficit for 2014 will be $514 billion, or 3% of the size of the U.S. economy.
As a share of gross domestic product, that represents a nearly 27% drop from last year, and marks the smallest deficit since 2007.
In its latest budget and economic outlook, released Tuesday, the CBO also projected that the 2015 deficit would reach a low for the coming decade, at $478 billion, or 2.6% of GDP, and then stay below 3% for a couple of years after that.