For the moment, it looks like the government is doing a better job managing the way it spends your tax dollars.
But with interest rates expected to start rising soon, the good news is only temporary.
The level of government overspending—usually referred to as the budget deficit—fell by nearly a third during the fiscal year that ended last month, mostly because revenues grew a lot faster than spending, according to a Congressional Budget Office report on Wednesday.
The Treasury collected a little over $3 trillion—nearly 9 percent more than it did a year ago—while spending rose just 1.4 percent to $3.5 trillion, according to the CBO.
That shrank the deficit to $486 billion for the latest year—about $195 billion less than the budget gap in fiscal 2013.
Higher discretionary spending—up $44 billion—was fueled largely by the cost of expanding health-care coverage. And the total paid out in Social Security checks was $37 billion more than last year. Those spending increases were offset by a $30 billion cut in spending by the Defense Department and a $24 billion drop in jobless benefits.
The improved job market also helped the government collect more money than expected. That's because the expanding pool of jobs boosted overall wages, generating more tax revenue for the government.
"Growth in wages and salaries explains most of the increase in withheld receipts, but almost one-third of it stemmed from changes in law," the CBO said, citing an increase in payroll tax rates that pushed up withholding.