The U.S. government on Friday reported that its fiscal 2022 budget deficit plunged to half the previous year's budget to $1.375 trillion, due to fading COVID-19 relief spending and record revenues fueled by a hot economy, but student loan forgiveness costs limited the reduction.

The U.S. Treasury said the $1.4 trillion reduction in the deficit was still the largest-ever single-year improvement in the U.S. fiscal position as receipts hit a record $4.896 trillion, up $850 billion, or 21 percent from fiscal 2021.

President Joe Biden touted the deficit reductions in remarks at the White House and at Delaware State University, and said the deficit would shrink by another $250 billion over the next decade, given Medicare's ability to negotiate lower drug prices.

Biden chided Republicans for voting against the deficit reduction. While his administration lowered the deficit, it boosted spending on infrastructure and expanded benefits for middle-and low-income Americans.

"You know, we've gone from a historically strong economic recovery to a steady and stable growth, while reducing the deficit," Biden said.

Outlays for fiscal 2022, which ended September 30, fell by a record $550 billion, or 8 percent from last year to $6.272 trillion. But the outlays for September, the fiscal year's final month, included the recognition of $430 billion in costs from the Biden administration's plan to forgive student debt of up to $20,000 for former college students now earning under $125,000 a year and under $250,000 for married couples.

The move brought the September budget deficit to $430 billion, more than six times the prior-year September deficit of $65 billion. For most years, September is a surplus month due to the payment of quarterly corporate and individual taxes.

The Congressional Budget Office estimated that the plan would cost about $400 billion. This includes the extension of a COVID-19 moratorium on all student loan payments until the end of 2022, which added about $21 billion in budgetary costs.

Non-governmental budget analysts have estimated that the plan would wipe out a much-touted deficit reduction from Democrats' recently enacted climate, healthcare and Internal Revenue Service funding bill.