(WASHINGTON) — The Congressional Budget Office has reported a monthly budget surplus of $58 billion, which would be a first in nearly three years.
The improved numbers are attributed to a 10 percent increase in tax revenue. The month of April coincides with tax season which typically results in a yearly surplus, but that hasn’t happened since the 2008 financial crisis when tax revenue fell.
“It is a clear signal that the government’s fiscal situation is finally moving definitively in the right direction,” said Mark Zandi, who is the chief economist for Moody’s Analytics.
Next month’s report will likely show a budget deficit, but the small surplus is an important milestone in the nation’s struggle to fend of a future debt crisis.
Some economists argue that a rush to curb the deficit through immediate spending cuts could harm the economy in the short term. Britain recently announced that it fell back into recession, with some blaming the drop in gross domestic product on harsh austerity measures.
The other school of thought says that a massive budget deficit is too risky because the interest on the debt could grow to become unmanageable.
Lawmakers will likely have to find a way to cut the deficit over the long run.
“Policymakers have a lot more work to do to establish fiscal sustainability,” said Zandi.
The conventional wisdom is that Congress will address the long-term problem after the election is over.
Copyright 2012 ABC News Radio
Nate Eaton, EastIdahoNews.com
Paul Menser, BizMojo Idaho
John Gunnerson, BYU-Idaho