Government posts smaller surplus in 2001

By Jeannine Aversa

Associated Press

WASHINGTON – The sour economy and tax rebates made for a smaller, $127 billion surplus for the 2001 budget year compared with the record bounty produced the year before, the Bush administration announced today.

It was the first time since 1992 that the government’s balance sheet didn’t show an improvement. At that time the government’s deficit had bloated to a record $290 billion; in subsequent years the deficits shrank and since 1998 the government has recorded surpluses.

The 2000 surplus was $237 billion.

Even with the deterioration in the government’s finances, the 2001 surplus marked the second-biggest ever in U.S. history. Government finances have not shown so many consecutive years of surplus since before the Great Depression; an 11-year string of surpluses ended in 1930.

Projections for the 2001 surplus have been revised downward by White House and congressional budget analysts this year as the economy, stuck in low gear for more than a year, continued to weaken.

The Congressional Budget Office earlier this month estimated that the 2001 surplus would be $121 billion, well below the $153 billion projected in August. The White House said it could be as low as $120 billion, versus an August estimate of $158 billion.

The smaller surplus in the 2001 budget year, which ended Sept. 30, reflects the weakening economy’s toll on tax revenues and the impact of provisions contained in President Bush’s $1.35 trillion, 10-year tax cut, which was approved by Congress in the spring, the CBO said.

The tax cut resulted in about $35 billion in rebate checks over the summer, the CBO said.

The tax law also shifted the due date for corporate income tax payments – estimated to total around $33 billion – from mid-September to Oct. 1, which marked the start of the 2002 budget year.

The Sept. 11 attacks on the World Trade Center and the Pentagon also contributed to the smaller 2001 surplus as government spending in some areas was increased after the disaster. But the impact was limited since the budget year ended Sept. 30.

Some economists believe the government will post a deficit in the 2002 budget year, the first shortfall since 1997, reflecting costs of reviving the ailing economy and protecting the nation against terrorist attacks.

In August, experts projected a $176 billion surplus for the new fiscal year that started Oct. 1, but now it is all but certain to end up as a deficit in the tens of billions.

Many economists say economic fallout from the attacks pushed the economy into recession this calendar year. Analysts predict economic output fell in the third and fourth quarters, meeting one common definition of a recession.

In the 2000 budget year, the government posted a record surplus of $237 billion as the economic boom bolstered tax revenues.

That surplus surpassed the previous record of $124.4 billion for fiscal year 1999 and came on top of a $69.2 billion surplus in fiscal year 1998. The 1998 surplus marked the first time the government had managed to finish in the black since 1969.

The surpluses are important because politicians have been counting on them to reduce the national debt over the next decade. That would put the government on more solid financial ground and help bolster Social Security and Medicare for the looming retirement of the baby boom generation.

Revenues for fiscal year 2001 totaled $1.99 trillion, while expenditures came to $1.86 trillion.

Individual tax payment totaled $994.3 billion, compared with $1 trillion in fiscal year 2000. Payments from corporate taxes came to $151.2 billion, from $207.3 billion.

The biggest spending categories in fiscal 2001 were:

Social Security, $461.7 billion, up from $441.8 billion; programs of the Health and Human Services Department, including Medicare and Medicaid, $426.4 billion, up from $382.6 billion; interest on the public debt, $359.5 billion, compared with $362 billion; and military spending, $291 billion, up from $281.2 billion.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Customers enter and exit the Costco on Dec. 2, 2022, in Lake Stevens. (Olivia Vanni / The Herald)
Costco stores could be impacted by looming truck driver strike threat

Truck drivers who deliver groceries and produce to Costco warehouses… Continue reading

Two Washington State ferries pass along the route between Mukilteo and Clinton as scuba divers swim near the shore Sunday, Oct. 22, 2023, in Mukilteo, Washington. (Ryan Berry / The Herald)
Ferry system increases ridership by a half million in 2024

Edmonds-Kingston route remains second-busiest route in the system.

Three injured after high-speed, head-on collision on Highway 522

Washington State Patrol is investigating the crash that happened before 4:30 p.m. on Monday.

Fernando Espinoza salts the sidewalk along Fifth Avenue South on Thursday, Feb. 6, 2025 in Edmonds, Washington. (Olivia Vanni / The Herald)
Think this is cold, Snohomish County? Wait until Tuesday

Tuesday could bring dangerous wind chill during the day and an overnight low of 19 degrees

Robin Cain with 50 of her marathon medals hanging on a display board she made with her father on Thursday, Jan. 2, 2025 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Running a marathon is hard. She ran one in every state.

Robin Cain, of Lake Stevens, is one of only a few thousand people to ever achieve the feat.

People line up to grab food at the Everett Recovery Cafe on Wednesday, Dec. 4, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Coffee, meals and compassion are free at the Everett Recovery Cafe

The free, membership-based day center offers free coffee and meals and more importantly, camaraderie and recovery support.

Devani Padron, left, Daisy Ramos perform during dance class at Mari's Place Monday afternoon in Everett on July 13, 2016. (Kevin Clark / The Herald)
Mari’s Place helps children build confidence and design a better future

The Everett-based nonprofit offers free and low-cost classes in art, music, theater and dance for children ages 5 to 14.

The Everett Wastewater Treatment Plant along the Snohomish River on Thursday, June 16, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Everett water, sewer rates could jump 43% by 2028

The rate hikes would pay for improvements to the city’s sewer infrastructure.

The bond funded new track and field at Northshore Middle School on Thursday, Oct. 24, 2024 in Bothell, Washington. (Courtesy of Northshore School District)
Northshore School District bond improvements underway

The $425 million bond is funding new track and field complexes, playgrounds and phase one of two school replacements.

The Washington State Department of Licensing office is seen in 2018 in Seattle. (Sue Misao / The Herald)
Drivers licensing offices to close Feb. 14-17

Online services are also not available Feb. 10-17. The Washington State Department of Licensing said the move is necessary to upgrade software.

Pharmacist Nisha Mathew prepares a Pfizer COVID booster shot for a patient at Bartell Drugs on Broadway on Saturday, Oct. 1, 2022, in Everett, Washington. (Ryan Berry / The Herald)
Everett lawmakers back universal health care bill, introduced in Olympia

Proponents say providing health care for all is a “fundamental human right.” Opponents worry about the cost of implementing it.

Outside of the updated section of Lake Stevens High School on Thursday, Feb. 27, 2020 in Lake Stevens, Wa. (Olivia Vanni / The Herald)
Lake Stevens, Arlington school measures on Feb. 11 ballot

A bond in Lake Stevens and a levy in Arlington would be used to build new schools.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.