The federal budget deficit for fiscal 2013 was $680 billion, the Treasury Department reported Wednesday.
This is the first time that the deficit has fallen below $1 trillion during President Obama's time in the White House.
The deficit has dropped $409 billion from 2012, when it was $1.089 trillion.
Most of the change comes from higher tax receipts. Receipts rose to $2.77 trillion in 2013, up from $2.45 trillion in 2012. Spending was $3.45 trillion, down from $3.53 trillion in 2012.
White House Budget Director Sylvia Mathews Burwell hailed the deficit total, noting that the deficit is now less than half what it was in 2009, when it stood at $1.4 trillion in the wake of the recession.
"As a percent of Gross Domestic Product (GDP), the deficit fell to 4.1 percent, representing a reduction of more than half from the deficit that the Administration inherited when the president took office in 2009. The deficit reduction since that point represents the fastest decline in the deficit over a sustained period since the end of World War II," Burwell said in a statement.
The deficit report arrived the same day that a new House-Senate budget conference met for the first time in hopes of resolving the $91 billion in spending differences for fiscal 2014 between the two chambers' budgets.
"We are making progress as a nation toward getting our fiscal house back in order, but there is still much to do to secure a strong fiscal future for our country. This includes focusing on job creation and pursuing a sensible, balanced approach to deficit reduction that can replace the irrational sequester and provide certainty to businesses, markets, and working families," House Minority Whip Steny Hoyer (D-Md.) said.