According to data from the Treasury Department, the U.S.’s monthly budget deficit all but vanished in December, coming in at just $260 million. Analysts had expected a $1 billion deficit for the month:
The U.S. government budget deficit narrowed to its most favorable December monthly result in five years, reflecting higher revenue, lower spending and calendar- driven shifts in some monthly payments.
The shortfall last month shrank almost completely to $260 million from $86 billion in December 2011, according to Treasury Department data issued today in Washington. The gap was smaller than the $1 billion median estimate in a Bloomberg survey of economists. Through the first three months of this fiscal year, the deficit was 9.1 percent smaller than the same period last year.
This was the best December result since 2007, before the financial crisis began. Monthly deficits can be a bit volatile, to be sure, but the low number is still a sign that the nation’s finances are moving in the right direction.
According to the Center on Budget and Policy Priorities, $1.4 trillion in deficit reduction over the next ten years would be enough to stabilize and eventually reduce U.S. debt. And for that number to be truly balanced — once all of the budget deals crafted since 2011 are taken into account — it would have to be composed of about 90 percent new revenue. 75 percent of the deficit reduction achieved by the Obama administration and Congressional Republicans has been via spending cuts.