WASHINGTON -- The booming economy and capital gains scored by investors in last year's soaring stock market are boosting tax revenue so much this spring that the federal budget surplus could reach $210 billion, about $30 billion above current official estimates, according to financial analysts.
That extra money could make it easier for the Clinton administration and congressional Republicans to reconcile some of their differences over additional spending or tax cuts for this fiscal year and the next, which starts Oct. 1.
That's because the bulk of the $30 billion could be used without dipping into the Social Security trust fund surplus, which Clinton and congressional Republicans have ruled off limits as a source of funding for non-Social Security spending or tax cuts.
In the short run, the revenue windfall means the government will be paying down the publicly held national debt more rapidly.
In the long run, if the additional money is not immediately committed for future use, it could leave more room in future budgets for the competing tax and spending proposals being offered by Republican presidential candidates Texas Gov. George W. Bush and Vice President Al Gore. Wall Street analysts who closely track the daily flow of tax receipts into the U.S. Treasury's coffers say the amount of money being sent by individuals along with their 1999 personal income tax returns is running nearly one-fourth higher than it was in April 1999.
''The revenue generating machine for the U.S. economy is running at full throttle,'' said economist Ethan Harris of Lehman Brothers in New York, who along with a number of other analysts said the surplus for April alone likely will be in the $150 billion to $160 billion range.
At $210 billion, the surplus would exceed the latest official projections from the Clinton administration's Office of Management and Budget or the Congressional Budget Office. Early this year, both predicted a surplus slightly less than $180 billion. Either way, this year's surplus is likely to be well above the $124.4 billion amount recorded in the last fiscal year.
Meanwhile, the Treasury Department Thursday reported a deficit of $35.4 billion for March. But after adjusting for a pair of calendar quirks that inflated spending last month and lowered reported revenues, the report indicated the budget balance had improved by more than $30 billion over the course of the first half of the fiscal year.
Brainerd Dispatch ©2013. All Rights Reserved.