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Economy in Brief

U.S. Budget Surplus Doubled in April
by Tom Moeller May 10, 2006

The U.S. federal government ran a budget surplus in April of $118.9B that was more than double the surplus during the same month last year. The surplus improved the FY06 to-date budget deficit to $184.1B versus a deficit of $236.9B during the first seven months of FY05.

A quirky 21.5% m/m drop in U.S. net outlays helped minimize the government's red ink. As a result of the drop the y/y growth in FYTD outlays fell to 5.7% from 8.7% one month earlier. Lower spending during April was logged by most outlay categories. Defense spending (19% of total outlays) reversed all of the prior month's surge and fell 21.6% (-10.9% y/y) and for the first seven months of FY06 rose 5.7% from '05.

Medicare spending (12% of total outlays) also reversed the March jump and fell by about half m/m. Still the FYTD growth in Medicare spending was strong at 7.9%, helped by the initiation of prescription drug coverage. Spending on social security (21% of total outlays) remained strong at 5.7%.

Net revenues nearly doubled m/m during April and that lifted growth to 11.2% during the first seven months of this fiscal year versus FY05. Individual income tax receipts (44% of total receipts) rose 13.8% from last April and that pulled FYTD growth to 9.9%. Corporate income taxes (10% of total receipts) similarly were strong and rose 28.0% y/y and rose 29.9% during fiscal year 06's first seven months.

The improved job market raised employment taxes (36% of total receipts) 7.4% y/y and estate & gift taxes surged by 13.1% y/y.

Presidential Approval Ratings: How Low Can Bush Go? from the American Enterprise Institute (AEI) can be found here.

Also from AEI is Taking Stock of Congress: A Lot of Bad to Go Around and it is available here.

US Government Finance April Mar Y/Y FY 2005 FY 2004 FY 2003
Budget Balance $118.9B $-85.5B $57.7B (4/05) $-318.3B $-412.7B $-377.6B
  Net Revenues $315.1B $164.6B 13.5% 14.5% 5.5% -3.8%
  Net Outlays $196.2B $250.0B -10.8% 7.8% 6.2% 7.4%
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