JAMES B. LEE, JR.
1899 L Street, NW · Suite 225 · Washington, DC 20036 · (202) 596-3597 · www.fixthedebt.org
The Campaign to Fix the Debt
It’s Not All Downhill from Here
The final federal deficit numbers for Fiscal Year 2014 from the U.S. Treasury Department show
that the annual deficit was $483 billion. While this is down from the record levels of recent
years, deficits will begin rising again in a few years and the national debt remains on an
unsustainable course. Below are highlights of the latest numbers. Read a more detailed
analysis from the Committee for a Responsible Federal Budget here.
Deficits declined 66 percent over the past 5 years after increasing by roughly 800 percent.
The $483 billion FY 2014 deficit represents improvement from recent years, due
mainly to increased revenue from an improving economy.
Spending remained roughly level over the past five years, as the winding down of
measures responding to the recession and across-the-board sequestration cuts were
negated by increases in mandatory spending (namely Medicare, Medicaid, Social Security,
and interest payments).
The deficit is still three times higher than in 2007 and is projected to grow over time.
Even as deficits have fallen, debt has continued to rise.
As deficits fell by 66 percent, nominal debt held by the public grew by 69 percent – from
$7.5 trillion to $12.8 trillion today.
Public debt has more than doubled as a share of the economy in the last five years to
levels not seen since World War II; from 35 percent of GDP in 2007 to 74 percent in 2014.
Both deficits and debt are expected to rise in the coming years.
Under the Congressional Budget Office (CBO) current law baseline, deficits will return to
trillion-dollar levels by 2025. Under their less optimistic Alternative Fiscal Scenario (AFS),
the deficit will reach $1.5 trillion in 2025, exceeding the nominal record of $1.4 trillion
reached in 2009.
CBO projects debt will exceed the size of the economy before 2040. Under CBO’s AFS,
debt will exceed the size of the economy before 2030.