For the first time since 2007, the Treasury Department announced on Monday that the federal government will be able to pay down debt in a quarter, as new figures show Uncle Sam should come out $35 billion ahead between April-June, turning around what had been an expected need to borrow over $100 billion.
“This borrowing estimate is $138 billion lower than announced in February,” read a statement issued by the Treasury Department.
“The decrease in borrowing relates primarily to higher receipts, lower outlays, and changes in cash balance assumptions,” read the statement.
In other words, tax revenues are coming in at a higher than expected clip and Uncle Sam is spending less money because of automatic budget cuts that kicked in March 1.
Still, we aren’t anywhere near a balanced budget, which has only happened four times since 1970, when there was a budget surplus between fiscal years 1998 and 2001.
That news came as the squabbling continued over last week’s move by Congress to force an end to furloughs for air traffic controllers, by shifting money from an airport improvement fund into FAA operations.
“This was not our ideal solution,” said White House Press Secretary Jay Carney at Monday’s briefing for reporters, where he again said it’s time to wipe away the $85 billion sequester with a combination of new taxes and different cuts.
“The sequester was designed purposefully to be terrible policy, and we are seeing in the various impacts it is having across the country that it is, in fact, terrible policy,” said Carney.
But at this point, Republicans aren’t interested in Democratic plans to do away with the sequester, leaving many on Capitol Hill wondering which group will push for help from lawmakers to address a specific spending issue.
Will it be backers of Head Start, who want to ease a 5 percent cut to that $8 billion program?
Democrats have talked a lot in recent days about what they see as an unfair solution where air traffic controllers are allowed to avoid furloughs, but cuts continue to Head Start.
But could that change if the two parties agree on how best to shift around money in the Education Department budget?
Sure it could; but no one has floated any bipartisan plan on that or a host of other funding issues related to the automatic cuts.
In a sense, Democrats are in a spot on the sequester much like where Republicans in Congress are on the issue of the Obama health law.
Democrats want the sequester repealed; Republicans want the Obama health reforms repealed.
But neither party has the votes to do that. So, the question is – what is the best course forward.
Is it better to keep pushing for repeal – or should you cut some deals to improve the current law?
Right now, Republicans aren’t going to get many Democrats to talk about repealing the Obama health law, just like Democrats aren’t going to get many Republicans to talk about raising taxes as a way to eliminate the sequester.
We’ll see if anyone steps forward with new plans when the Congress returns to work next week.