U.S. Treasury Dept June, 2013 - $117 Billion Surplus

ARRA News Service - This afternoon The Treasury Department  released the Monthly Treasury Statement for last month showing the U.S. ran a surplus of $117 billion in June. The surplus was driven by higher tax revenues, sequester-related spending cuts, timing quirks in government payments, and large receipts from Fannie Mae and Freddie Mac.

While a one-month surplus is positive, the larger budget reality remains negative. The federal government is still on pace to run a deficit this year, the long term structural challenges to our budget remain with Medicare and Social Security on the path to insolvency and billions of taxpayer dollars continue to be wasted by inefficient and unaccountable federal agencies. The high level of spending over the past five years has failed to deliver on the promise of economic recovery. Washington continues to ignore these realities and as a result our long-term budget outlook remains troubling.

We have an overspending problem, not an under-taxing problem. The federal government has run trillion dollar deficits over the past four years and is still on pace to run a multi-billion dollar deficit this year, meanwhile tax revenue has reached a record high. As long as we are running deficits, our nearly $17 trillion debt is continuing to rise.

• This is the largest budget surplus since April 2008, which underscores just how much the federal government has been overspending.

Recent reports from the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB) make clear that the answer to our economic problems isn’t higher taxes, it is making our government more efficient, effective, and accountable. Tax revenue has outpaced spending cuts and economic growth was revised down.

On our current course, raising taxes again would not fix the long-term structural problems with our budget nor will it result in the growth needed to put our country back on a firm fiscal foundation. Worse, it ignores the biggest drivers of our debt, Medicare and Social Security spending.

For years, the government has spent far more than it has taken in and it remains on that course this year despite this month’s surplus. Big spending programs like the stimulus have failed to deliver on promises, while cuts like the sequester haven’t had the devastating impact many said it would.

As we enter the last quarter of the fiscal year and deadlines for the CR and debt ceiling near, Washington has the opportunity to take the next step and finally have a productive discussion on what’s holding our economy back: overspending.

June's Surplus Was Driven By Taxes, Sequester Cuts, GSEs, And Timing Quirks - Related articles:

• Higher Tax Revenues Contributed To June's Surplus. "Rising tax revenues, public spending cuts and big payments to the Treasury from state-backed mortgage firms helped the government take in $117 billion more last month than it paid out, the U.S. Treasury said on Thursday." ("U.S. Posts $117 Billion Budget Surplus In June, "Reuters, 7/11/13)
• Sequester Cuts Also Contributed To June's Surplus. "Across-the-board budget cuts began March, which also contributed to the surplus." ("U.S. Posts $117 Billion Budget Surplus In June, "Ibid, 7/11/13)
• Fannie Mae And Freddie Mac Provided $66.3 Billion In Payments In June." The surplus was due in part to $66.3 billion in dividend payments from Fannie Mae and Freddie Mac. The mortgage giants were taken over by the government at the height of the 2008 financial crisis and are now repaying taxpayers for the support they received." (Martin Crutsinger, "U.S. Government Reports $116.5 Billion Surplus In June, "AP, 7/11/13)
• Timing Quirks Reduced Outlays In June By $34 Billion. "Because June 1, 2013, fell on a Saturday, certain payments that ordinarily would have been made in June this year were instead made earlier, reducing outlays in June by about $34 billion." ("Monthly Budget Review For June 2013," CBO, 7/9/13)

Analysis developed for the ARRA News Service by PublicNotice.

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