The numbers: The U.S. federal budget surplus fell to $176 billion in April, down from a record $308 billion in the same month last year, the Treasury Department said Wednesday.
As a result, the deficit for the first seven months of the fiscal year widened to $925 billion, up sharply from $360 billion in the same period last year.
Key details: Receipts fell $225 billion to $639 billion this year from a record $864 billion in the same month last year.
Spending fell $93 billion to $462 billion this year.
Interest on the federal debt increased $16 billion to $76 billion in April. For the fiscal year-to-date, interest on the federal debt was up 31%.
Big picture: Because of the large inflow of tax payments, the government usually records a budget surplus in April.
Last year’s surplus was a record due to high capital gains taxes from the strong performance of financial markets as the country exited the pandemic.
At the moment, the U.S. is facing a looming fiscal crisis as the divided Congress has been unable to raise the federal debt ceiling. Treasury ran out of statutory room on the amount of debt it can issue in January. Since then, the department has been using extraordinary measures to stay under the limit.
Treasury Secretary Janet Yellen has warned that there is a risk that Treasury will run out of funds from these extraordinary measures in early June. The data released Wednesday were used in Yellen’s updated estimate of the so-called “X-date,” Treasury officials said.
The White House and Congressional Republicans agreed Tuesday to work on a budget agreement that could resolve the debt-ceiling impasse.
See: Debt-ceiling standoff: Here’s what could go into a bipartisan deal
Market reaction: The yield on the 10-year Treasury note
TMUBMUSD10Y,
fell 8 basis points to 3.44% after consumer inflation cooled in April.
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