The US Treasury reported a budget surplus for the first time since 2008. The Treasury likely benefited from a windfall when the payroll tax cuts expired on January 1.
The budget surplus for January was $3 billion. Treasury Department data showed on Tuesday that the surplus was the first in five years and was significantly better than January 2012′s $27 billion deficit.
Reuters reports that economists were expecting to see a $2 billion deficit, making it a surprise when the Treasury reported the surplus. The boost was likely part of the “fiscal cliff” deal, which was passed last month.
The 2012 fiscal year saw a budget deficit of $1.089 trillion. So far during the 2013 fiscal year, the budget deficit has been $290 billion, 17 percent lower than the first four months of 2012.
The surplus was caused by receipts outpacing spending. Receipts grew to $272 billion, while spending was $269 billion for January. Comparably, last year’s receipts for January were $234 billion, but the outlays were $262 billion.
Bloomberg notes that Millan Mulraine, senior US strategist for TD Securities Inc. in New York, stated before the report came out:
“Going forward, we are likely to see a dramatic improvement in the overall budget relative to the last year largely due to the improving economic performance.”
The last time the budget saw a surplus was in January 2008. That surplus was $17.8 billion. Tuesday’s report also showed that revenue rose 16.2 percent in January 2013 from the same month last year. The Congressional Budget Office noted that the federal budget deficit will total $845 billion for 2013 fiscal.
This year will be the first time in five years the deficit will be less than $1 trillion — a result of budget cuts and economic growth. The nonpartisan agency expects the budget deficit for fiscal 2014 to be even lower at $616 billion.
Are you glad to see the US’s budget has a surplus for the first time since 2008?
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