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$237 Billion Government Surplus Tops
Forecast
October 24, 2000
WASHINGTON -- The federal government
posted a record $236.99 billion surplus for the
fiscal year ended in September, and the
windfall could intensify the argument between
presidential candidates George W. Bush and Al
Gore over the nation's financial priorities.
Tuesday's announcement marked the third
consecutive year of surpluses, something that
hasn't occurred since the late 1940s.
The size of the 2000 surplus was nearly double
the fiscal 1999 surplus of $124.4 billion and
exceeds the Congressional Budget Office's
forecast of around $232 billion.
Excluding Social Security and the Postal
Service, the U.S. posted its largest ever
on-budget surplus, $87.18 billion.
Relative to U.S. real gross domestic product,
the government said the surplus was 2.4%, the
largest it has been since 1948.
In a statement, the Treasury Department
attributed the nation's run of eight straight
budget improvements to strong economic
growth and fiscal discipline, which allowed
revenue to grow faster than spending. Treasury
said federal outlays have grown at an average
yearly pace of 3.3% since 1992, while receipts
have grown at an average rate of 8%.
In fiscal 2000, total outlays amounted to $1.79
trillion and receipts totaled $2.03 trillion.
The Clinton administration boasted that the
improved fiscal discipline helped it reduce the
amount of debt held by the public by $223
billion to $3.41 trillion in fiscal 2000. That
lowered the ratio of debt to gross domestic
product to 35%. As a percentage of GDP, the
government's debt burden has fallen each year since fiscal 1994.
"This string of seven consecutive years of declining debt relative to GDP is the
longest since the period ended in 1967," the Treasury Department said.
"Moreover, it represents the largest seven-year reduction in the debt ratio since
the period ending in 1958, and reverses about three-fifths of the rise of the
preceding 12 years."
Despite the optimistic budget performance in fiscal 2000, Federal Reserve
Chairman Alan Greenspan and the Congressional Budget Office warned recently
that the nation's fiscal good fortune may prove to be short-lived.
In a speech last week, the Fed chief warned that plans by the two leading
presidential candidates and Congress to boost spending and cut taxes could
threaten the budget outlook. "I believe most of us harbor doubts about whether the
dynamics of the political process, some of which have been on display in the
current budget deliberations, will allow the surpluses to continue to grow," Mr.
Greenspan said.
Even if politicians don't spend a dime of projected surpluses, the budget office
warned in a report this month that the U.S. will again run deficits within the next
75 years. Absent structural reforms, the agency said that soaring health-care and
Social Security costs will push the nation's debt load to unsustainable levels.
The budget office's forecast of a $4.6 trillion windfall over the next 10 years has
intensified the election-year debate over fiscal priorities. Both major presidential
candidates would wall off Social Security budget projections -- $2.4 trillion over the
coming decade -- for proposals to extend the retirement system's solvency. The
remaining $2.2 trillion in surplus cash would be devoted largely either to tax cuts
or spending increases.
Mr. Bush would spend the lion's share of the on-budget surpluses on tax cuts,
including a repeal of the estate tax. Mr. Gore, meanwhile, would boost government
expenditure on new social programs and provide targeted tax relief for low- and
middle-income families.
Both men would establish reserve funds to guard against the possibility that
expected surpluses don't materialize in full.
Treasury said the government's surplus widened to $65.82 billion in September
2000 from $58.04 billion in September 1999. That compared with an unrevised
deficit of $10.43 billion in August.
In its monthly statement, Treasury also said receipts totaled $219.47 billion last
month, compared with $200.41 billion a year earlier and $138.13 billion in August.
Outlays totaled $153.65 billion in September, compared with $142.37 billion a
year earlier and $148.56 billion in August.
During September, the government took in $104.40 billion in individual income tax
receipts, up 17% from a year earlier. Corporate income tax revenue, meanwhile,
grew 8% to $43.44 billion.
The government paid $12.58 billion in net interest last month on the federal debt.
Net interest on the federal debt excludes interest paid on nonmarketable
government securities held by federal trust funds, such as Social Security. |
