The federal government notched a $1.1 trillion deficit in fiscal year 2012 — the fourth straight year over $1 trillion — according to a preliminary estimate that the Congressional Budget Office released Friday.
That’s still an improvement over 2011, when the deficit reached $1.3 trillion, and it marks the lowest deficit of President Obama’s four years in office.
The CBO report said the better picture was due to higher revenue from taxes. Spending was about the same in 2012 as it was a year earlier.
The government ended the fiscal year on a very positive note, posting a $75 billion surplus for the month of September — just the second monthly surplus since the Wall Street collapse in September 2008, when President George W. Bush was still in office.
Corporate income taxes powered the better fiscal news.
The CBO said revenue from corporate taxes was up by 34 percent in 2012, which the agency said was due to the expiration of some rules governing how quickly businesses were able to deduct the costs of equipment investments.
The spending picture was more complicated.
CBO analysts said defense and basic domestic spending both fell, particularly due to a $30 billion drop in unemployment benefit costs.
But the two big federal entitlement programs, Social Security and Medicare, both grew, offsetting the other spending cuts.
“Social Security outlays rose by $42 billion (or 6 percent) in 2012, somewhat more than in recent years. Medicare spending rose by $15 billion (or 3 percent), slightly less than in 2011 and 2010,” the CBO estimate said. “Outlays for veterans programs increased by $8 billion and for the Office of Personnel Management by $5 billion. Spending for the State Department, the Department of Homeland Security and the Environmental Protection Agency increased by about $2 billion each.
CBO releases an estimate every month of the federal government’s fiscal picture. Official numbers will come next week from the Treasury Department.