WASHINGTON (Reuters) - The United States posted its biggest monthly budget surplus in five years in April, the Treasury Department said on Friday, adding that revenues are running at a record high so far this year thanks to higher taxes and an improving economy.
The April surplus was $113 billion, about $6 billion higher than economists’ expectations and the highest surplus since April 2008, according to the Treasury. The surplus in April 2012 was $59 billion.
Treasury usually posts a surplus in April, when most Americans pay their taxes, but Washington’s budget fortunes are shifting more quickly than most analysts had anticipated.
The better state of the government’s finances will likely be a factor in budget battles in Congress over whether further belt-tightening is needed.
The administration and Republican lawmakers both seek a broad deal to cut the budget deficit, but clash over the White House’s insistence that any reductions in spending on health and retirement programs be offset with higher taxes.
More cash means the United States also gets more time before it runs out of borrowing room under the legal limit on the nation’s debt. While a temporary suspension of the debt ceiling expires on May 18, Treasury Secretary Jack Lew on Friday said the nation will be able to keep borrowing until at least early September as the Treasury deploys emergency cash maneuvers.
The government has received $1.6 trillion in taxes so far this year, a record high for this time period and 16 percent above last year’s level for April, due to an expiration of payroll tax cuts, higher taxes on richer Americans, and an improving economy.
Tax receipts for last month, at $407 billion, were 28 percent higher than receipts in April 2012.
Because of the higher revenues, the U.S. government has said it expects to pay down debt this quarter for the first time in six years.
The cumulative deficit for the fiscal year, which started in October, was $488 billion in April, down 32 percent from the first seven months of fiscal 2012. That puts the United States on track to have its first yearly deficit below $1 trillion in five years.
Government spending was $294 billion in April, in line with figures from last month and above the year-ago level of $260 billion. In the past seven months, government spending has fallen 1 percent to $2.1 trillion compared to the same period last year.
Editing by Andrea Ricci