U.S. deficit falls to $680 billion

NEW YORK (CNNMoney) -- The federal government's latest annual deficit is the smallest it's been since 2008, according to Treasury Department data released Wednesday.


At $680 billion, the fiscal 2013 deficit is 51% less than it was in 2009, when it hit a record high nominally of $1.4 trillion.


As a percent of the economy, it's also considerably smaller than it's been in the past five years, coming in at 4.1% of gross domestic product. By contrast, the annual deficit in 2009 topped 10% of GDP. And last year it was 6.8%.


Overall, Treasury said higher receipts accounted for 79% of the decline in the deficit from last year.


Several factors have contributed to the strong improvement in the nation's fiscal picture. They include an improving economy and a mix of fiscal restraint -- primarily, the expiration of stimulus measures, the imposition of across-the-board budget cuts known as the sequester, and tax increases on high-income households during the 2013 fiscal year, which ended September 30.


Another boon was the fact Fannie Mae and Freddie Mac paid back a large part of the $187 billion federal bailout the mortgage giants received, starting in 2008, to help them weather the housing crisis.


In addition, interest rates were low throughout the year, and that kept total interest payments moderate relative to the amount of outstanding debt. 

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