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April is the one month in which the U.S. government can be expected to run a budget surplus, thanks largely to the annual filing of personal income taxes that are due during the month. According to the U.S. Treasury Department, April 2018 saw the biggest budget surplus ever recorded in the nation’s history of $214 billion.
Harriet Torry and Richard Rubin of the Wall Street Journal note the record, but also find the cloud in the silver lining:
The U.S. government posted the highest surplus on record in April, although the federal deficit over the past several months widened as spending rose along with revenues.
Government revenue rose by 12%, or $55 billion, in April from the same period a year earlier, the Treasury Department said Thursday. That brought April’s surplus to $214.3 billion, the largest April surplus on record.
More broadly, the budget deficit widened in the first seven months of fiscal 2018. The deficit, or the difference between the amount of money the government spent and what it took in, stood at $385.4 billion in October through April, which was 12% larger than the deficit during the same period a year earlier.
MyGovCost has been tracking the federal government’s cumulative tax collections and spending for the fiscal year to date, which we’ve graphed in the following chart, where you can quickly compare the government’s performance in its 2018 fiscal year against its previous 2017 fiscal year.
On the whole, we see that while the government’s tax collections in FY 2018 are indeed higher than in FY 2017, the government’s spending is likewise up, having been juiced by higher spending increases in March 2018 with the passage of the Bipartisan Budget Act of 2018, which President Trump signed into law the month before.
Earlier in April, the Congressional Budget Office forecast that the U.S. government will run an 804 billion dollar budget deficit in its 2018 fiscal year, which ends on September 30, 2018. With that being the case, we can look for both cumulative spending and tax collections to continue running above their respective 2017 levels, with spending having a wider gap from its previous year’s cumulative total.
To answer the question of why the annual budget deficit of the U.S. government will rise this year despite the government collecting more in taxes than ever before: “It’s the spending, stupid!”