The U.S. government posted a budget surplus in April, the first in more than three years, as tax revenue climbed and spending dropped.
Receipts topped outlays by $59.1 compared with a deficit of $40.4 billion in April 2011, the Treasury Department said today. Economists projected a $35 billion surplus, according to the median estimate in a Bloomberg News survey. It was the first surplus since September 2008 and the biggest since April 2008.
“This is the first good news in a long while that the rising tide of tax revenues may be starting to lift as the economic expansion nears the three-year mark from the end of the recession,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “The economy is growing again, but we can’t grow our way out of these trillion-dollar deficits.”
President Barack Obama, in his campaign to win a second term, is trying to make the case that while the recovery has been uneven, the U.S. is making progress. The administration has said won’t accept any of the dozen spending bills House Republicans are working on unless they agree to abide by a budget deal reached last year.
The dispute may lead to a government shutdown shortly before the November elections unless lawmakers agree on legislation to keep agencies operating in the 2013 fiscal year, which starts Oct. 1.
Republicans rejected President Barack Obama’s $3.8 trillion election-year budget plan, saying it didn’t go far enough to reduce the deficit or boost economic growth.
Estimates of the April budget outcome ranged from roughly in balance to a surplus of $60 billion in a Bloomberg survey of 23 economists. April has been a surplus month in 44 of the past 58 fiscal years, the Treasury Department said.
The non-partisan Congressional Budget Office estimated this week the April surplus would reach $58 billion. The CBO said in a report dated May 7 that the results were influenced by shifts in the timing of certain payments.
Receipts increased 10 percent from the same month last year to $318.8 billion, today’s Treasury Department report showed. Over the same period, spending dropped 21 percent to $259.7 billion.
Obama’s proposed budget would initially boost the U.S. economy though later in this decade it would become a drag on growth, the CBO said April 20.
Between 2018 and 2022, the administration’s plan would cut growth by 0.5 percent to 2.2 percent, according to the analysis.
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