Treasury Reports Smaller Surplus Than Last Year

By MARTIN CRUTSINGER, Associated Press
May 13, 2008

WASHINGTON — The federal government ran a budget surplus of $159.3 billion in April, smaller than a year ago.

The Treasury Department reported yesterday that the budget surplus for April was 10.4% lower than in April 2007.

The government traditionally runs a surplus in April, the month that tax returns are due. However, the weak economy has been dampening growth in revenues this year.

Through the first seven months of this budget year, the federal deficit totals $152.2 billion, nearly double the $80.8 billion deficit during the same period in 2007.

The Bush administration, when it sent its latest budget proposal to Congress in February, estimated that the deficit for the whole year would total $410 billion, very close to the all-time high in dollar terms of $413 billion set in 2004.

However, many private economists believe the deficit for this year could climb to close to $500 billion, pushed higher by a weak economy and the distribution of 130 million economic stimulus payments now being made in an effort to keep the country out of a deep recession.

For the first seven months of this budget year, revenues have totaled $1.55 trillion, up 3% from the same period a year ago. However, government outlays have been rising must faster, climbing by 7.4%, to total $1.70 trillion so far this budget year.

While the deficit in 2007 had dropped to a five-year low of $162.8 billion, it is expected to rise significantly this year because of the weak economy and extra spending in such areas as the $168 billion economic stimulus package and fighting the Iraq war.