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  #1    
Old February 13th, 2013, 01:25 PM
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WASHINGTON (Reuters) - The budget posted a surprise surplus in January for the first time in five years, as the Treasury likely benefited from a windfall when payroll tax cuts expired.

The budget registered a $3 billion surplus, the first time there had been a surplus in January since 2008, Treasury Department data showed on Tuesday. Economists had been looking for a $2 billion gap. The surplus compared with a $27 billion deficit in January 2012.

It appeared the Treasury got a boost from the expiration of a payroll tax reduction on January 1 following the last-minute "fiscal cliff" deal. In its estimate last week, the Congressional Budget Office said the Treasury got an extra $9 billion in taxes from the expiry.

The January surplus means the government's cumulative deficit for the fiscal year, which starts in October, is $290 billion, 17 percent lower than the comparable first four months of fiscal 2012.

During fiscal 2012 which ended September 30, the budget deficit totaled $1.089 trillion.

Growth in receipts outpaced rising spending, narrowing the deficit. Receipts grew to $272 billion from $234 billion in the same month last year while outlays rose to $269 billion in January of this year from $262 billion in January 2012. So far in the first four months of fiscal 2013, receipts are $98 billion higher compared to the same period a year ago.

The extra fiscal space should leave the Treasury with plenty of room to stave off default after a debt-limit extension expires on May 19.

Congress on January 31 passed a measure that allows Treasury to borrow sufficiently to meet federal obligations until May 19, at which time another increase in the federal debt limit will be needed.

But even if no increase is granted, Treasury will be able to stave off a final day of reckoning until late July or early August by redeploying emergency cash management measures which allow it to claw back about $220 billion worth of borrowing capacity.
inb4 Rubio & Boehner take all the credit for this one. Good news though.

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Old February 13th, 2013, 01:53 PM
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How is this possible if it was close to a fiscal cliff? Unless of course it was just scare tactics being used....
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Old February 13th, 2013, 02:27 PM
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Originally Posted by Elendil View Post
How is this possible if it was close to a fiscal cliff? Unless of course it was just scare tactics being used....
It is a budget surplus. Meaning that for this operating year the federal government is bringing in more than their spending. Which is good. Does not mean that the debt is now in the black however. Budget deficit is different than the US public debt. Potentially $30billion (I would wager less though come tax time because the wealthy will find loop holes, guaranteed) that could go toward the nearly $16trillion debt.

Also, keep in mind that for the past few years they've been reusing an old budget from the Bush era with minor changes because of political deadlock. More recent interests and allocation aren't included. I still expect or hope for a surplus though once Obama presents his budget this year

So, there's still lots of work to be done. The fiscal cliff was a set of automatic across the board spending cuts and tax increases that would hurt the interests of both parties (and ordinary citizens, but really the politicians are concerned about themselves). It was devised as an incentive for the two parties to come up with a solution. They came up with some cuts and the aforementioned tax increase on the wealthy, but left the bulk of it out and kicked the can down to March.

There's still a very real problem with spending (in terms of amount and priority) and the way in which revenue is raised. Obama gave out a lot of great ideas last night. I'd love to see them happen. But there is still a lot of work to be done to get America's fiscal house in order. Many band-aids isn't a long-term solution. The fiscal cliff is still very real.

Very glad to see a budget surplus though. That is great news.
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Old February 14th, 2013, 11:10 AM
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Obama never got his chance to get rid of the Bush tax cuts, so this isn't all Obama's doing. We had budget surpluses the last time had a Republican House and a Democratic President. Obama has consistently caved to Republican demands to cut spending, so we agreed to close some tax "loopholes" (deductions and credits) that were deemed wasteful. There's something about having a divided government that causes us to balance our budget. Maybe it's the fact that neither side gets to have everything their way. Let's also look at who these tax hikes will affect the most: the working and middle classes. Part of the Obama tax hikes is a 2% increase in the payroll tax, which affects every American who receieves a paycheck.
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Old February 14th, 2013, 02:32 PM
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Originally Posted by FreakyLocz14 View Post
Obama never got his chance to get rid of the Bush tax cuts, so this isn't all Obama's doing. We had budget surpluses the last time had a Republican House and a Democratic President. Obama has consistently caved to Republican demands to cut spending, so we agreed to close some tax "loopholes" (deductions and credits) that were deemed wasteful. There's something about having a divided government that causes us to balance our budget. Maybe it's the fact that neither side gets to have everything their way. Let's also look at who these tax hikes will affect the most: the working and middle classes. Part of the Obama tax hikes is a 2% increase in the payroll tax, which affects every American who receieves a paycheck.
There's truth to that. Minority governments are a great byproduct of a parliamentary system. I quite like them. Actual negotiating and bargaining has to take place. Compromise.

I don't see a lot of that in the current US federal government though. Just deadlock that leads to nothing, and nothing leads to a lack of new spending, which leads to savings. But... if they're doing nothing, why are they there and getting paid?
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Old February 14th, 2013, 10:43 PM
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Originally Posted by TRIFORCE89 View Post
There's truth to that. Minority governments are a great byproduct of a parliamentary system. I quite like them. Actual negotiating and bargaining has to take place. Compromise.

I don't see a lot of that in the current US federal government though. Just deadlock that leads to nothing, and nothing leads to a lack of new spending, which leads to savings. But... if they're doing nothing, why are they there and getting paid?
We could have minority governments in the American system, if the voters started electing third party candidates to Congress.

During the 110th Congress, both the Democrats and the Republicans held 49 out of 100 seats, so the 2 Independent Senators caucused with the Democrats in order to give them a narrow majority.

Gridlock isn't necessarily a bad thing. It's put pressure on both parties to set aside their sacred horses to get things done.
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Old February 15th, 2013, 06:19 AM
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Originally Posted by FreakyLocz14 View Post
We could have minority governments in the American system, if the voters started electing third party candidates to Congress.
That'd be wonderful.

With the Tea Party giving its own SotU address rebuttle separate from the Republicans, think there's a chance of that becoming an official third party at the very least?
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Old February 15th, 2013, 10:12 PM
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Originally Posted by TRIFORCE89 View Post
That'd be wonderful.

With the Tea Party giving its own SotU address rebuttle separate from the Republicans, think there's a chance of that becoming an official third party at the very least?
It's a faction within the GOP. In a two-party system, you get factions, since politicians must associated with one of the two major parties to get elected. There are libertarians in Congress, for example. They're just not Libertarian Party members. Rep. Ron Paul (R-TX) was a libertarian member of the Republican Party for decades, until he left Congress this year. There is now a small, but significant, libertarian GOP faction. The Democrats don't really have a libertarian faction. They went away with William Jennings Bryan.
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Old February 18th, 2013, 08:45 PM
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I'm surprised, that considering the continually exploding national debt, there is now a budget surplus. Can't say I'm so surprised about how they got it, considering Washington's Enron-style accounting that they've been using for many, many years. Someday... someday... there could be serious trouble ahead again, once the government's accounting shenanigans are fully exposed, just like how Enron collapsed after their accounting fraud was exposed.

Makes me really wonder if the federal government's accountants were formerly employed by Arthur Andersen and (maybe) even were involved in audits of companies such as Enron and WorldCom, or other accounting firms involved in scandals from auditing other companies, such as Sunbeam and Kmart.
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