U.S. Government Recorded $119 Billion Budget Surplus, Its First Since Before Pandemic

In January of the previous fiscal year, the government ran a deficit of roughly $163 billion.

Federal outlays surged during the pandemic as the government administered programs that provided aid to workers, small businesses and families. That spending has receded as many of the programs, such as monthly child tax credit payments, expired. Government receipts also have been trending higher, with rising wages and salaries boosting workers’ taxable earnings. Receipts from withheld payroll taxes climbed 21% in January from a year earlier, according to Treasury data.

The government is running a roughly $259 billion deficit so far in the fiscal year, which began in October, a 65% decline from the $736 billion deficit during the year-ago period.

Treasury’s Thursday report showed a steep decline in outlays at the Labor Department so far in this fiscal year, which a senior Treasury official said was due in part to improvement in U.S. employment levels and the expiration of special pandemic unemployment programs. The official said $142 billion of the decline in overall spending last month was because the Treasury Department didn’t distribute stimulus checks to households as it did in January 2021.

Before the pandemic, the federal government periodically ran monthly surpluses, including in January, April and September in both 2018 and 2019. The government last had an annual surplus in the 2001 fiscal year.

Gross U.S. national debt earlier this month exceeded $30 trillion for the first time, reflecting increased federal borrowing related to the pandemic.

Higher levels of government spending and borrowing during the pandemic have complicated President

Biden’s

ability to win final congressional approval for a sweeping social, climate and education spending plan, a key component of his economic agenda.

Congressional Republicans and Sen.

Joe Manchin

(D., W.Va.), whose vote is key in a narrowly divided Senate, have raised concerns about an additional large-scale spending package, given three previous rounds of pandemic aid passed by Congress. Mr. Manchin has said his reservations about additional government spending are also tied to elevated inflation, which last month accelerated to its highest level since February 1982.

—Anthony DeBarros contributed to this article.

Write to Amara Omeokwe at [email protected]