- The Washington Times - Thursday, January 12, 2006

ASSOCIATED PRESS

The federal government posted the first budget surplus for December in three years as corporate tax payments hit a high, helping offset a record level for spending, the Treasury Department reported yesterday.

The department said in its monthly budget report that government receipts surpassed spending by $10.98 billion last month. A year ago, the government ran a deficit of $2.85 billion in December.

The improvement reflected government receipts climbing 12.1 percent from a year ago to $241.88 billion. Government spending rose by a slower 5.6 percent to $230.9 billion. The figure for outlays still represented a record high for spending for any month.

Corporate income-tax collections totaled a record $73.5 billion last month, surpassing the old record of $72 billion set in September.

Even with December’s surplus, the deficit for this year is expected to climb, reflecting higher government spending to help with reconstruction efforts in hurricane-ravaged states along the Gulf Coast.

Joel Kaplan, deputy director of the White House budget office, told reporters yesterday that the administration expected the deficit for this year to top $400 billion, an estimate that is in line with the expectations of private forecasters.

The largest deficit was an imbalance of $413 billion in 2004. Last year, the deficit narrowed to $318.5 billion as a surge of tax revenues from an improving economy helped offset rising government spending.

President Bush has vowed to cut the deficit in half by 2009 and still preserve the tax cuts he pushed through Congress in his first term.

Treasury Secretary John W. Snow said this week that the administration plans to reduce the deficit through stringent controls on spending, which he said would be evident in the budget proposal for 2007 that Mr. Bush will send to Congress in early February.

However, budget experts are already predicting that Congress will balk at making sharp cuts in the growth of popular government programs, especially in an election year.

Through the first three months of the current budget year, which began Oct. 1, government tax receipts have totaled $530.2 billion, up 8.8 percent from a year earlier.

Government spending totaled $649.52 billion, a 7.2 percent increase from a year ago. That resulted in a deficit for the first three months of the fiscal year of $119.31 billion, up 1.1 percent from a year ago.

The December surplus marked the first surplus for that month since December 2002.

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