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CBO estimates that the total budget surplus for the first four months of fiscal year 2000 was $40 billion, an increase of $24 billion over the surplus recorded at the same point last year. CBO is currently projecting a total budget surplus of $176 billion for the fiscal year, reflecting surpluses of $23 billion in the on-budget accounts and $153 billion in the off-budget accounts (mostly Social Security). In 1999, the government recorded an on-budget surplus of $0.7 billion, the first such surplus since 1960.
 

The Treasury reported a surplus of $33.1 billion in December, slightly more than the $32.5 billion that CBO had projected on the basis of the Daily Treasury Statements. Revenues were $0.3 billion below CBO's preliminary estimate, and outlays were $0.9 billion lower.
 

The government typically runs a surplus in January because revenues are boosted by the quarterly payments of estimated individual income taxes and outlays are depressed by the shift into December of certain payments that would ordinarily be made on January 1. CBO estimates that the surplus this January was almost $61 billion, about $10 billion less than the surplus in January 1999. That comparison is distorted, however, because last year January 3 fell on a weekend and about $29 billion in Social Security payments were made in December instead of January. After adjusting for that shift, the surplus in January 2000 was about $20 billion more than the surplus in January 1999.
 

The estimated surplus for the first four months of fiscal year 2000 was $40 billion, compared with $16 billion for the same period last year. Receipts were about $48 billion higher than in fiscal year 1999, while outlays grew by only $24 billion.
 

After the first four months of the fiscal year, revenues are 8.3 percent higher than at the same point a year earlier. Receipts from individual income taxes are up by almost 14 percent, reflecting strong withholding by employers in December and January as well as strong quarterly estimated payments by individuals in January. Receipts from corporate income taxes are up by nearly 2 percent after falling by about that same percentage in fiscal year 1999. Other receipts have declined by more than 6 percent, mainly because of a drop of 18 percent in excise tax revenues. That drop occurred because a large payment of excise taxes that had been postponed from the previous fiscal year was finally paid in October of last year. Excluding October, excise tax payments this year have grown by about 4 percent.
 

CBO estimates that outlays were 4.2 percent higher in the first four months of fiscal year 2000 than in the same period last year. That growth rate is higher than the 3.1 percent rate recorded for fiscal year 1999 as a whole.

Both of the major health care programs are growing more rapidly than they did last year. Medicare spending (which declined by almost 1 percent from 1998 to 1999) is up by about 2.5 percent so far this year. Medicaid spending (which grew by 6.9 percent in 1999) has increased by 7.6 percent in the first four months of fiscal year 2000. Defense outlays and payments of Social Security benefits are also rising at a faster pace than they did last year.

Net interest costs continue to decline, but higher interest rates are offsetting some of the savings obtained from reducing the public debt.
 

Both CBO and the Office of Management and Budget (OMB) have recently released new projections of the budget outlook for fiscal year 2000. CBO is now estimating a total surplus of $176 billion (in the absence of additional spending legislation), compared with OMB's estimate of $179 billion. CBO is projecting that revenues will increase by 6.4 percent this year and outlays will grow by 3.9 percent. (See The Budget and Economic Outlook: Fiscal Years 2001-2010, January 2000.) OMB's estimates of total revenues and outlays are slightly higher. CBO anticipates an on-budget surplus for 2000 of $23 billion; OMB estimates $32 billion.

NOTE: Unless otherwise indicated, the figures in this report include the Social Security trust funds and the Postal Service fund, which are off-budget. Numbers may not add up to totals because of rounding.