Tax Receipts

WaPo reports Tax Receipts Exceed Treasury Predictions

After three years of rising federal budget deficits, a surge of April tax receipts brought unexpected good news to fiscal policymakers -- the tide of government red ink appears to be receding. The Treasury Department this week reported there would be a $54 billion swing from projected deficit to surplus in the April-to-June quarter, after an unanticipated gush of tax payments poured into the Treasury before the April 15 deadline. That prompted private forecasters to lower their deficit projections for the fiscal year that ends in September.

Budget analysts inside and outside the government said the positive turn is likely to be short-lived. Indeed, after a four-year absence, the Treasury Department announced yesterday it is considering reissuing its 30-year Treasury bond to help finance long-term government debt, jolting the bond markets and pushing down the price of existing 30-year securities. But in the short term, many forecasters said the budget deficit appears to have crested. "I think it has turned the corner," said David Wyss, chief economist at Standard & Poor's, the credit rating agency. "My guess is 2004 will have been the worst year."

Steve Verdon blogged Usually I only get to complain about the reporting of the deficit in mainstream outlets. However, this story in the Washington Post is a pleasant surprise.

Lorie Byrd blogged Now, some might think that when they read this article saying tax receipts in April exceeded Treasury predictions and the budget deficit projections were therefore lowered, that the top story in every newspaper today would say “Democrats Wrong – Bush Tax Policy Working.” Of course anyone thinking they would ever see that headline would have to be from Mars or be utterly unfamiliar with the American MSM.

James Joyner blogged The Treasury Department reports that, in a pleasant surprise, higher-than-expected tax receipts have created a budget surpluss for the third quarter of the fiscal year.

This is good news