(CNSNews.com) – The U.S. Treasury, according to its monthly statement, ran a surplus of $182,428,000,000 in the month of April, taking in $455,605,000,000 in revenue while spending $273,177,000,000.
At the same time, however, the federal debt subject to the legal limit set by Congress remained frozen at $19,808,428,000,000 for the entire month, according to the Daily Treasury Statement.
The debt subject to the limit started the month at $19,808,428,000,000, finished the month at $19,808,428,000,000, and remained at $19,808,428,000,000 as of March 9—the last day for which the Treasury has published its daily statement.
Much of the surplus tax revenue that the Treasury collected during April went to increase the federal government’s cash on hand.
The Treasury began April with $92,205,000,000 in cash on hand and finished it with $272,585,000,000, according to the Daily Treasury Statement. That was an increase of $180,380,000,000 in cash on hand—or $2,048,000,000 less than monthly surplus of $182,428,000,000.
The debt subject to the limit has in fact been frozen at $19,808,428,000,000 since March 15, when it closed the day at that level. For 55 straight days—through May 8, the last day for which the Treasury has published a daily statement—it has been frozen at that level.
That is because the Bipartisan Budget Act, which was passed by a Republican-controlled Congress and signed by Democratic President Barack Obama in November 2015, suspended the debt limit until March 15, 2017. Under that law, the new legal limit on the debt would be whatever the debt was at the close of business on March 15.
Facing that new debt limit, Treasury Secretary Steven Mnuchin sent a letter to House Speaker Paul Ryan on March 16, informing him that he was declaring what the Treasury calls a “debt issuance suspension period.”
During such a period, the Treasury accounts for some government trust fund in different manner than it normally does—and then report on its Daily Treasury Statements that the debt subject to the legal limit is in fact frozen just below the legal limit.
On each of the Daily Treasury Statement since Mnuchin’s March 16 letter to Ryan, the Treasury has said that the new limit on the debt is $19,808,772,381,624.74. On those same statements, the Treasury has said that the “total public debt subject to limit” has opened and closed each day at $19,808,747,000,000—or about 25,381,624 below the limit.
The Congressional Research Service published a report in October 2015 explaining the actions the Treasury typically takes when it hits the legal limit on the debt and the secretary declares a “debt issuance suspension period.”
“Past Treasury secretaries, when faced with a nearly binding debt ceiling, have used special strategies to handle cash and debt management responsibilities,” said CRS.
“Actions taken in the past include suspending sales of nonmarketable debt, postponing or downsizing marketable debt auctions, and withholding receipts that would be transferred to certain government trust funds,” said CRS. “Congress has authorized the Treasury secretary to invoke a ‘debt issuance suspension period’ to use some of these strategies using the Civil Service Retirement Fund and the Thrift Savings Fund, along with the authority to make those funds whole after an easing of the debt constraint.”
It is not unusual for the Treasury to run a surplus in April, the month that includes the deadline day for federal income tax returns. This is the case even when the Treasury is running a deficit for the fiscal year up to April and is headed toward running deficits for the full year.
In April 2016, for example, the Treasury ran a surplus of $106,452,000,000, but had a deficit of $354,592,000,000 for fiscal 2016 up to that point. The Treasury ended up running a deficit of $587,412 for all of fiscal 2016.
So far in fiscal 2017 (September through April), the Treasury has run a deficit of $344,427,000,000—despite the one-month surplus of $182,428,000,000 in April.
The last time the Treasury ran a deficit in April was in 2011. That year, the one-month deficit for April was $40,488,000,000—and through the first seven months of fiscal 2011 (September through April), the Treasury ran a deficit of $869,898,000,000.