Report: Surplus Could Surpass $50B
WASHINGTON (AP) _ The economy continues to perform so strongly that the government could enjoy a $50 billion-plus surplus for fiscal 1998 if current spending and revenue trends keep pace, The Washington Post reported today, citing an internal Federal Reserve document.
In a written statement today, the Fed’s Board of Governors said its policy is not to comment on internal forecasts.
``The size of the Fiscal Year 1998 federal surplus remains highly uncertain with official and private estimates varying over a considerable range,″ the statement said.
Of particular difficulty is forecasting the amount of revenue that might flow into the U.S. Treasury as tax day looms April 15, the board said, adding that ``much more will be known in the next few weeks, as tax returns are processed.″
Earlier this week, the Congressional Budget Office raised its surplus prediction from $8 billion to $18 billion. Some private economists are predicting it could hit $80 billion. Any government surplus would be the first since 1969.
Official figures are available for October through February, the first five months of the fiscal year, and the budget office has made public its estimate of the size of the March deficit. According to those figures, the cumulative deficit for the six months was $71 billion.
But tax revenues from the April 15 tax deadline will boost government revenues and bring the budget back into the black for the year. If the surplus for April and the rest of the budget year are equal to the $89 billion surplus posted in the second half of fiscal 1997, then the surplus for all of 1998 would amount to the $18 billion projected by the Congressional Budget Office.
But if revenue continues to grow in the second half of the fiscal year, as occurred during the first half, the surplus for 1998 could reach $75 billion.
Gene Sperling, chairman of President Clinton’s National Economic Council, noted the uncertainty of budget projections.
``Until you get the key months like April, I don’t think anybody knows for sure,″ he said.