Feb. 12 (Bloomberg) -- The U.S. government posted a January budget surplus for the first time in five years, reflecting higher revenue from payroll and individual income taxes.
Receipts exceeded outlays by $2.88 billion, compared with a $27.4 billion deficit in January 2012, according to Treasury Department data issued today in Washington. Economists projected a $2 billion shortfall, according to the median estimate in a Bloomberg survey. The nation had a $17.8 billion surplus in January 2008.
“Going forward, we are likely to see a dramatic improvement in the overall budget relative to the last year largely due to the improving economic performance,” Millan Mulraine, senior U.S. strategist for TD Securities Inc. in New York, said before the report.
The federal budget deficit will total $845 billion in fiscal 2013, the first time in five years the gap will be less than $1 trillion, reflecting a combination of budget cuts and economic growth, the Congressional Budget Office said Feb. 5. Next year’s gap will fall further to $616 billion, the nonpartisan agency said.
Today’s report showed revenue rose 16.2 percent in January from the same month a year earlier, to $272.2 billion from $234.3 billion. Spending increased 2.9 percent to $269.3 billion from $261.7 billion.
Individual income tax receipts in the first four months of this fiscal year, which started Oct. 1, climbed to $468.4 billion from $403.8 billion in the same period last year. Corporate income tax receipts rose to $70.3 billion from $60.2 billion.
President Barack Obama and Republicans are locked in a standoff over how to avert $1.2 trillion in automatic spending cuts set to take effect on March 1 unless Congress acts to stop or replace them.
In addition, a temporary suspension of the nation’s $16.4 trillion debt ceiling only runs through May 18.
The U.S. Treasury on Feb. 6 urged Congress to pass a longer-term debt limit increase before the suspension runs out, saying failure to do so would force the department to take “extraordinary measures” to finance the government.
Consumers are grappling with an increase in the payroll tax, which Congress allowed to revert to its 2010 level of 6.2 percent from 4.2 percent starting in January. A worker earning $50,000 a year is taking home about $83 less a month because of the higher levy.
Estimates for January ranged from deficits of $2 billion to $35 billion, according to the Bloomberg survey of 27 economists.
On Feb. 7 the Congressional Budget Office projected January would show a budget deficit of $2 billion.
The CBO said that receipts were about $36 billion higher in January 2013 than they were in the same month last year, “largely because revenues from individual income and payroll taxes increased by $33 billion.”
“Most significantly, the temporary cut in payroll taxes expired at the end of December 2012, boosting withheld receipts by about $9 billion,” the CBO said.
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