According to the U.S. Treasury
Department, the federal government posted the largest monthly budget
surplus in over five years in June, with spending down 47 percent and a
stronger economy proving a lift in tax receipts.
Tax receipts exceeded expenditures
by $116.5 billion in June representing the biggest surplus since April 2008. This
is compared to a $59.7 billion deficit in June of last year. The result
exceeded the $115 billion median estimate in a Bloomberg survey of 21
economists.
The Treasury report showed
revenue rose by 10.2 percent in June to $286.6 billion from the same month a
year ago. Spending was also down as it totaled $170.1 billion compared with
$319.9 billion a year ago. Tax receipts should continue to improve throughout
the year as the economy continues to grow. The Congressional Budget Office said
July 9 that net corporate income taxes were higher by $29 billion, or 17
percent, “probably reflecting growth in taxable profits in both calendar years
2012 and 2013.”
The Obama administration has
projected the federal budget deficit to shrink to $759 billion for the
fiscal year ending Sept. 30. This is the smallest deficit gap in five years as
a stronger economy bolsters revenue. As tax collections increase, there are
also rising payments to the Treasury from Fannie Mae and Freddie
Mac with the housing sector showing improvement. These developments have combined
to take pressure off of Congress and the White House to come to accord on
spending, automated cuts, and the deficit.
For the first nine
months of the 2013 financial year that began Oct. 1, the nation’s deficit
narrowed to $509.8 billion compared with a $904.2 billion shortfall over the
same period from a year before. This led to an upgrade in the U.S. credit
rating by Standard & Poor to AA+ stable, improving from negative. The
improvement comes based on receding fiscal risks less than two years after the
U.S. was downgraded from the top rating.