Feb. 10 (Bloomberg) -- The U.S. government’s budget deficit narrowed in January as income-tax receipts climbed and spending dropped.
The $27.4 billion gap was less than the median forecast of economists surveyed by Bloomberg News and followed a $49.8 billion shortfall in January 2011, the Treasury Department said today in Washington. It was the smallest January deficit since 2008, when the government ran a surplus.
“There are signs that better economic conditions are leading to faster growth in government tax receipts,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “This gives one some hope that the trillion-dollar deficits will not be with us forever.”
President Barack Obama on Feb. 13 will submit to Congress an election-year spending plan for the fiscal year beginning Oct. 1. Obama’s four-volume package will be based in part on the 10-year, $3 trillion deficit-reduction proposal he offered unsuccessfully to Congress in September.
Before today’s report, the median estimate in a survey of 22 economists by Bloomberg News forecast that the January budget deficit would narrow to $31.6 billion. Estimates of the gap ranged from $66.7 billion to $20 billion.
So far in the fiscal year that began in October, the budget deficit is $349.1 billion compared with $418.8 billion in the same period last year.
Spending fell by 5.3 percent in January from a year earlier to $261.7 billion, while revenue rose 3.4 percent to $234.3 billion.
Individual income tax receipts in the first four months of this fiscal year rose 4.9 percent to $403.8 billion. Corporate income tax receipts climbed 56 percent to $60.2 billion in the first four months of the fiscal year.
The non-partisan Congressional Budget Office estimated this week the January budget deficit would reach $27 billion. The shifting of payments because Jan. 1 fell on a weekend reduced payments by about $17 billion last month, the CBO said in its monthly review.
Additionally, the government spent less this January than last on the student loan program, refundable tax credits and the Troubled Asset Relief Program, the CBO said.
--With assistance from Chris Middleton in Washington. Editors: Carlos Torres, Vince Golle
To contact the reporters on this story: Meera Louis in Washington at email@example.com
To contact the editor responsible for this story: Chris Wellisz at firstname.lastname@example.org