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News. U.S. Posts December Budget Surplus of $53.22 Billion
Fannie Mae, Freddie Mac Payments to Treasury Further Narrowing Deficit in Quarter

By JEFFREY SPARSHOTT CONNECT
Jan. 13, 2014 2:00 p.m. ET
WASHINGTON—The federal government posted a budget surplus in December after mortgage giants Fannie Mae FNMA -2.88% and Freddie Mac FMCC -2.32% posted big payments to the Treasury, further narrowing the deficit in the first quarter of the fiscal year.

Revenues outpaced spending by $53.22 billion in December, the first surplus for the month since the 2007 fiscal year and the biggest on record. Economists surveyed by Dow Jones had forecast a $44.5 billion surplus.

Federal finances have been improving steadily as spending remains contained and revenues rise.

The U.S. government's deficit for October through December totaled $173.60 billion, down 41% from the $293.30 billion shortfall during the same period a year earlier, the Treasury Department said Monday in its monthly report. The 2014 fiscal year started on Oct. 1.

Federal revenue climbed by 8% to $664.60 billion in the first three months of the latest fiscal year. Individual income and payroll taxes accounted for the bulk of the increase, largely a result of higher tax rates that kicked in during the 2013 calendar year.

Spending fell 8% in the first quarter to $838.20 billion, in large part because of improving finances at Fannie Mae and Freddie Mac. The two companies paid $39.57 billion to the Treasury at the end of last year. Because of the way the government accounts for the funds, they are deducted from spending, rather than included in revenues.

The latest budget figures follow trends from 2013, when the deficit fell below $1 trillion for the first time in five years. The $680.28 billion shortfall for the full year was down by more than one-third from 2012 as a slowly recovering economy and higher tax rates boosted receipts.

U.S. lawmakers in December negotiated a two-year budget deal, setting a $1.012 trillion spending ceiling for the 2014 fiscal year, which ends Sept. 30.

But Congress is likely to miss a Wednesday deadline for passing legislation to appropriate those funds. A stopgap bill will likely extend the deadline until Jan. 18.

http://online.wsj.com/news/articles/SB10001424052702303595404579318742766736128