The budget deficit shrank substantially in the year ended Sept. 30 and would have shrunk even more if the tax increase inspired by President Obama hadn't restrained growth, according to a Wall Street Journal editorial.

The fiscal 2013 deficit narrowed to $680 billion, or 4.1 percent of GDP, from $1.1 trillion, or 6.8 percent of GDP a year earlier.

"The main reasons are good (the budget caps and sequester) and bad (the January tax increase)," The Journal editors write.

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As for government revenue, it soared13.3 percent to a record $2.77 trillion in the year. Tax revenue now stands at 16.7 percent of GDP.

"Revenues would have climbed even faster in 2013 if growth resembled what it was in the economic expansions of the 1980s, 1990s or mid-2000s," they argue.

Economic growth of 3 percent or more generally produces revenue equaling at least 18 percent of GDP, they say. But GDP expanded only 1.8 percent over the last year.

"The revenue gains from Mr. Obama's higher tax rates were thus offset in part by the slower growth caused by the higher tax rates," the editorial says.

Philip Bump of The Atlantic writes that if you're a Republican, "you should point out that the reason the deficit has dropped is, in part, thanks to reduced spending. And that reduced spending, in no small part is thanks to the sequestration."

"Republican leaders in Congress have come around to the idea that it [sequestration] is a policy victory for the party."

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