In the three years since deficit reduction became a top priority in Congress, the winners have been Medicare recipients and the losers are agencies that fund national defense, education and anti-poverty efforts.

The deficit as a share of the economy jumped during the financial crisis, rising to 10.1 percent of gross domestic product in 2009 from 1.2 percent in 2007, according to the Office of Management and Budget. The crisis and resulting recession caused tax revenue to drop and spending to increase on unemployment benefits, food stamps and stimulus programs.

Deficit Drop

For fiscal 2013, which ends Sept. 30, the deficit will be $845 billion, or 5.3 percent of GDP, according to the Congressional Budget Office. That’s the first time the deficit will drop below $1 trillion since 2008.

A bipartisan commission in 2010, a congressional supercommittee in 2011 and recurring talks between President Barack Obama and House Speaker John Boehner, an Ohio Republican, haven’t produced an accord on how to address fiscal policy.

Still, even without a bipartisan consensus, the U.S. has reduced the deficit by about $2.4 trillion since Republicans took control of the House in January 2011. Most of that came from spending cuts Republicans secured later that year. Another $630 billion, plus interest, was shaved in January, when Congress agreed to let income tax rates rise for top earners.

Another $1.2 trillion in spending reductions over nine years is set to start today. The cuts will curb economic growth by 0.5 percentage point this year and wipe out 350,000 jobs if they stay in place through December, according to the median forecast of 26 economists surveyed by Bloomberg last week.

Cutting Spending

The prospect of the cuts hasn’t deterred investors. The Standard & Poor’s 500 Index is up 6.2 percent since the start of the year, closing yesterday at 1,514.68 in New York. The Dow Jones Industrial Average fell 0.2 percent to 14,054.49, and is less than 1 percent away from its October 2007 record.

Yields on 10-year Treasuries have been little changed over the past month, falling three basis points, or 0.03 percentage point to 1.88 percent at 5 p.m. in New York. The dollar led gains in world markets last month, climbing 3.5 percent, according to Intercontinental Exchange Inc.’s Dollar Index, which tracks the currency against those of six major U.S. trading partners.