U.S. FY 2008 deficit grows despite December surplus
WASHINGTON (Reuters) - The U.S. government revealed a weakening budget picture on Friday, with the 2008 fiscal year's first-quarter deficit rising 31.3 percent despite a record December surplus.
The cumulative deficit for the October-December period widened to $105.54 billion from the $80.4 billion gap for the same period a year earlier, as slower growth in receipts failed to keep up with higher spending, the Treasury Department said.
The data comes as the White House and key members of Congress are discussing possible fiscal stimulus plans to bolster a flagging economy, which could cost more than $100 billion.
"The deterioration in the first-quarter numbers didn't shake our view that the deficit might widen this year to the $200 billion range," said Lou Crandall, chief economist at Wrightson-ICAP in Jersey City, New Jersey.
"A severe deterioration of economic conditions and significant stimulus repose could quickly push you above the $300 billion (deficit) level," he said.
The federal government ended its last fiscal year on September 30, 2007 with a deficit of $163 billion, marking the third consecutive year of falling deficits after they peaked at $413 billion in 2004.
The Treasury said receipts for the first quarter of fiscal 2008 rose 5.7 percent from a year earlier to $606.21 billion, while spending outlays for the period rose 8.8 percent to $711.75 billion. Both receipts and outlays were a record for a first quarter.
For December, the federal government had posted a $48.26 billion budget surplus, a record for that month. However, one-off items reduced federal outlays by nearly $30 billion.
The December budget surplus was 15 percent wider than the year-earlier surplus of $41.96 billion. Analysts polled by Reuters had forecast a $50 billion surplus for December.
Federal government outlays in December rose to $228.72 billion from $218.01 billion in December 2006, the Treasury said.
A Treasury spokeswoman said the December 2007 outlays were reduced by $29.7 billion as the government shifted $17 billion of December Social Security, Medicare and other benefit payments into November and collected $12.7 billion from a Federal Communications Commission auction of advanced wireless services spectrum.
Without these special items, the December surplus would have been only $18.56 billion.
Federal receipts still set a new December record of $276.98 billion, up 6.5 percent from the $259.97 billion collected in December 2006.
(Reporting by David Lawder; Editing by Dan Grebler) 