The federal budget deficit for the fiscal year that ended Sept. 30 fell to just under $1.4 trillion, a 50 percent drop from the fiscal 2021 shortfall, the Treasury Department and the Office of Management and Budget reported Friday.

The final figure would have been lower if not for President Joe Biden’s student debt relief forgiveness plans, which added over $400 billion to the tab last month.

Administration officials said the year-end results set several records.

The fall in the deficit from $2.78 trillion in fiscal 2021 to $1.38 trillion in fiscal 2022, a decrease of $1.4 trillion, is the largest decrease on record.

Spending posted a record decrease, falling by $550 billion or 8 percent from $6.82 trillion in fiscal 2021 to $6.27 trillion in the year ending Sept. 30.

Revenue climbed from $4.05 trillion to $4.9 trillion, a rise of $850 billion or 21 percent, also a record.

[Economic growth helps cut fiscal 2021 deficit to $2.8 trillion]

The figures were largely in line with Congressional Budget Office estimates released earlier this month.

Improvement in the economy and the phaseout of economic aid provided after the pandemic hit in March 2020 played a large part in the results.

Some 90 percent of the revenue growth came from increases in income tax and payroll tax and corporate taxes, which officials said were boosted by growing employment and rising wages. At 19.6 percent of gross domestic product, tax receipts were the highest as a share of the U.S. economy since fiscal 2000 and the second-largest since World War II.

The decline in spending was led by a reduction in pandemic aid programs, like the $1,400 checks that went out last year and other payments to individuals and businesses, officials said. 

Looking ahead, officials said not to expect a similar magnitude of changes in spending at the end of the current fiscal year since the drops in pandemic-related spending have mostly already occurred.

While the year-end deficit fell, the shortfall in September, the last month of the fiscal year, vaulted to $430 billion, more than five times the $65 billion deficit in September 2021. That was due almost entirely to Biden’s plan to forgive student loans.

If not for the student loan relief costs, officials said, there would have been no deficit in September. The government usually records a surplus in the last month of the fiscal year because of estimated tax payments collected in September. Over the last 68 years, there has been a surplus in September in 56 of those years, an official said.

“The entirety of the decline in the deficit between 2021 and 2022 can be attributed to the expiration of temporary COVID relief, not due to a renewed era of fiscal responsibility,” Committee for a Responsible Federal Budget President Maya MacGuineas said in a statement. “In fact, the deficit would have been almost $400 billion lower had the Biden Administration not decided to enact an inflationary, costly, and regressive student debt cancellation plan in August.”

Though the one-time cost of student debt forgiveness won’t be repeated, deficits are still set to remain large by historical standards. 

For the fiscal year that began Oct. 1, the White House in August projected a deficit in the $1.3 trillion to $1.4 trillion range, depending on what policies are enacted. Over the next decade, deficits are expected to total somewhere between 4.5 percent of GDP in the administration’s forecast and 5 percent under CBO assumptions, compared with a 3.5 percent average over the past half-century.

While the fiscal 2022 deficit dropped substantially from a year earlier, the total increase in federal borrowing was much larger.

Not counting debts owed to federal trust funds for Social Security, Medicare and more, debt held by public grew by $2 trillion, to $24.3 trillion. That includes the nearly $1.4 trillion deficit increase as well as additional debt piled on to restock Treasury’s emergency cash balance, plus other impacts of federal lending programs not reflected in the annual deficit figure.

That’s compared with a $1.3 trillion debt increase the prior year, which was much lower than the nearly $2.8 trillion recorded deficit in fiscal 2021 largely because Treasury was burning through much of a huge cash stockpile built up during the pandemic.