The deficit has dropped precipitously over the last year as Mr. Obama’s stimulus spending subsided, the economy improved, and the tax increases and spending cuts agreed to since 2011 have begun to bite.
Foremost among those tax increases was the expiration of the payroll tax cut, which funds
Meanwhile, the key spending cuts have come via the budget sequesters, which are automatic across-the-board trims that kicked in last year.
The next round of sequesters is slated to take effect on Jan. 15, but negotiators are trying to work out a deal to restore some of that spending, which could reverse some of the progress, depending on
how they write the agreement.