The U.S. last year racked up its smallest budget deficit since 2007, marking an economic shift of fortunes as President Barack Obama and congressional Republicans prepare to face off over legislative priorities this year.
Capped off by a $2 billion surplus in December, the government ended the calendar year with a deficit of $488 billion, $72 billion less than the 2013 tally, according to data from the U.S. Treasury. The federal government uses a fiscal year that begins in October; on that basis, the 2014 fiscal year ended in September saw a deficit of $483 billion, also the lowest of Mr. Obama’s presidency.
The government’s fiscal outlook has improved markedly since the 2007-09 recession, when government tax revenues withered as the national unemployment rate climbed toward 10%. The Obama White House responded to the economic collapse with a more-than-$800 billion stimulus package, designed to defibrillate the economy even as it added further to the deficit.
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