The federal government ran an estimated budget deficit last month of $85 billion, marking the second year in a row that there has been an April deficit. The government usually runs large surpluses in April as income taxes pour into the Treasury just ahead of the tax filing deadline.
The new estimate from the Congressional Budget Office (CBO) serves as a reminder of the economic and fiscal challenges facing the country as it struggles to recover from severe recession. Last year’s April deficit was the first since 1983.
On the positive side, however, CBO said there were indications that tax revenues could soon rise. Income withholding and payroll taxes revenue were greater in March and April than they were last year, presumably in part because wages and salaries were starting to recover.
Last month’s estimated deficit of $85 billion was $64 billion more than the April 2009 deficit. After adjustments for the timing of certain payments, however, last month’s number was only $39 billion more than in 2009.
“Outlays and revenues alike are lower than they were last year at this time, by 3 percent and 4 percent, respectively,” the CBO reports. “At the end of the spring tax-filing season, receipts of individual incomes taxes were less than CBO anticipated, but receipts of corporate taxes were greater.”
The agency said it continued to expect that both revenues and outlays would be higher at the end of this fiscal year than in the previous year.
For the first seven months of Fiscal 2010, the CBO says, the government went further into the red by about $800 billion, the same amount as this time last year.
External links:
CBO Director’s Blog
Full CBO Report
