Topline
The federal government’s revenue surpassed expenses by $119 billion last month, marking its first monthly surplus since before the Covid-19 pandemic began, the Treasury said Thursday—amid an increase in tax revenue and the phaseout of Covid-era safety net programs.
U.S. Treasury Department
Key Facts
Small month-to-month surpluses were fairly common before the pandemic, even though the federal government has run annual deficits for the last two decades.
Last month’s surplus marks a stark change from a $163 billion deficit in January 2021: Between January 2021 and 2022, monthly tax revenue and other receipts grew from $385 billion to $465 billion, and outlays shrank from $547 billion to $346 billion.
Key Background
Federal spending surged in the early months of the pandemic, as the unemployment rate hit its highest level since the Great Depression and lawmakers rushed to pass economic relief measures. In the fiscal year ending September 2020, the government logged a record $3.1 trillion annual deficit, roughly triple fiscal year 2019’s shortfall. But in recent months, spending has fallen as pandemic-era programs like expanded unemployment benefits expired, and income and payroll tax revenue has grown as more people return to work.
What To Watch For
Despite this month’s surplus, the federal government is still expected to run a deficit this year, meaning it will need to add to its roughly $30 trillion in debt to stay open. Congress last raised the debt ceiling—a cap on total federal borrowing—in December, giving the Treasury authorization to keep borrowing to pay its bills until 2023.
Source: https://www.forbes.com/sites/joewalsh/2022/02/10/federal-government-runs-its-first-monthly-budget-surplus-since-2019/