The Congressional Budget Office (CBO) released its updated estimate of the U.S. federal budget deficit on Monday afternoon. The agency now estimates that the fiscal year 2014 deficit will fall to $492 billion, nearly a third less than the $680 billion deficit posted in fiscal year 2013. The federal fiscal year runs from October 1st through September 30th. The new estimate is $23 billion less than the previous estimate made in February.

The CBO notes that 2014 is the fifth consecutive year that the budget deficit has declined as a share of GDP since peaking at 9.8% in 2009. As a percentage the 2014 deficit is equal to 2.8% of U.S. GDP. The average deficit from 1974 to 2013 is 3.1% of GDP.

If existing laws remain unchanged, however, shrinking deficits will reverse in 2019. Deficits are projected to rise from a low of $469 billion in 2015 to about $1 trillion in 2022 before falling slightly through 2024. The primary reasons for the increase are an aging U.S. population, rising healthcare costs, expanded federal subsidies for health insurance, and larger payments on the national debt.

Federal debt held by the public grows to 78% of GDP by 2024, up from 72% at the end of 2013. In 2007 the debt totaled just 35% of GDP. Federal spending on the major health programs will rise from 9.5% of GDP in 2013 to 11.5% in 2024, surpassing federal outlays on Social Security.

Today’s projections are lower than those made in February largely due to a lower estimate for discretionary spending and lower projections of the cost of health insurance subsidies provided by Obamacare and Medicare.

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