2000 Surplus May Pass $40 Billion
Friday, May 12th 2000, 12:00 am
By: News On 6
WASHINGTON (AP) â€” Fueled by yet another burst of healthy revenue collections, this year's federal budget surplus should exceed $40 billion without counting Social Security, the Congressional Budget Office said Friday.
The new projections, which private and federal analysts expected, nonetheless verified the government's relentless fiscal strength. They also demonstrated that there should be plenty of money to pay for emergency spending legislation being written for U.S. peacekeepers in Kosovo, anti-drug efforts in Colombia and disasters at home.
In addition, the numbers could be good news for Texas Gov. George W. Bush, the likely Republican presidential nominee. His campaign recently boosted its surplus estimate for this year to about what CBO now envisions and argued that there is enough money to pay for his planned five-year, $460 billion tax cut.
CBO cautioned, however, that it was unclear whether there would be a long-term surplus improvement because of economic uncertainty. That could make it harder for Bush and his likely Democratic rival, Vice President Al Gore, to use the new figures to claim their competing budget proposals are affordable.
Only last month, the budget office projected a fiscal 2000 surplus of $26 billion without Social Security and a surplus of $179 billion counting the retirement and pension program's huge trust fund.
But in its analysis released Friday, CBO said it now expects the surplus to surpass $40 billion without Social Security and exceed $200 billion with it.
Both would be records for a government that until 1998 had run three consecutive decades of deficits. Fiscal 2000 ends Sept. 30.
``Stronger economic growth is likely to continue through much of the rest of this year,'' which could push tax receipts and the surplus even higher, CBO's report said.
With lawmakers beginning to write spending bills for fiscal 2001, the agency cautioned that its outlook for next year remains uncertain. Though CBO last forecast a $15 billion surplus without Social Security for 2001, many private analysts expect that figure to also surpass $40 billion when the estimate is updated later this year.
``Beyond 2000, however, the outlook for economic growth will reflect a number of factors, such as tightening monetary policy, whose effects are not yet clear,'' the report said.
CBO, Congress' nonpartisan budget analyst, based its new estimates on revenue collections in April and early May, which traditionally is the peak period for the government's tax collections.
Thanks to continued surprising economic strength, total tax receipts in April were 11 percent higher than in April 1999, CBO said. The agency said they would have been more than 15 percent higher if not for this year's delayed April 17 tax due date, which because of processing delays will cause some money to be counted in May's totals.