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Deficit streak ends: Obama sees first monthly surplus
The federal government broke its record deficit streak in April, notching its first monthly surplus since the end of the Bush administration, according to preliminary estimates released Monday.
The numbers, compiled by the Congressional Budget Office, mark the first monthly surplus under President Obama, who when he took office in January 2009 began a program of boosted spending and continued tax cuts to try to bolster the foundering economy, but saw those efforts splash red ink across the federal budget.
Boosted by better tax collections and slightly slower spending, the government recorded a $58 billion surplus in April. That's nearly a $100 billion turnaround from April 2011, when the government ran a $40 billion deficit.
The numbers suggest that the government's short-term fiscal picture has improved slightly since the deepest days of the recession, when stimulus spending and tax cuts spilled red ink over the federal budget.
"Because of the large inflows of tax revenues, the federal government usually runs a budget surplus in April — though that did not occur in 2009, 2010 and 2011," CBO said.
The brief spot of cheery news came even as all sides on Capitol Hill are working on next year's spending bills, and House Republicans are pushing ahead with a measure that would change the automatic defense cuts slated for the end of this year and replace them with trims to social programs.
Mr. Obama, fighting for higher spending, issued his first spending veto threat of the year on Monday, saying he would reject House Republicans' bill to fund the Commerce and Justice departments because it spends too little.
"Passing [the bill] at its current funding level would mean that when the Congress constructs other appropriations bills, it would necessitate significant and harmful cuts to critical national priorities, such as education, research and development, job training and health care," the White House said in a statement of policy.
At the same time as the fight over the yearly spending bills, the House GOP on Monday took the first steps to undo the automatic defense cuts looming at the end of this year, which were triggered when the congressional supercommittee failed to come up with an agreement last year.
Moving to erase those defense cuts, House Republicans advanced a bill through the Budget Committee that would instead trim from food assistance, Medicaid and other benefits programs.
"There is no reason we cannot work together to replace the sequester," said the committee's chairman, Rep. Paul Ryan, Wisconsin Republican, who said this year marked the first time since 2005 that the House was using the powerful budget-reconciliation process to try to overhaul entitlement programs.
But Democrats said it was unfairly targeting the poor, while leaving tax rates unchanged for the wealthy.
"Our Republican colleagues continue to reject that balanced approach to deficit reduction," said Rep. Chris Van Hollen, the ranking Democrat on the committee.
The budget bill is due for a vote in the full House later this week, though it has little chance of advancing to Mr. Obama's desk.
Even with Monday's good fiscal news, the government is expected to run a $1 trillion deficit in fiscal year 2012, which began Oct. 1.
Through the first seven months, the deficit was already $721 billion, though that was substantially below the $870 billion deficit at the same point in 2011.
CBO's analysis said spending on defense, education, Medicaid and unemployment benefits have all fallen this year, while Social Security spending is up.
The nonpartisan scorekeeper releases a preliminary estimate each month. Final figures should come later this week from the Treasury Department.
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