Federal budget surplus for Dec. - but wait . . .

WASHINGTON - The federal budget showed a record surplus for December, but for the first three months of this budget year, the budget deficit was running significantly higher than in the same period the previous year.

The Treasury Department reported yesterday that the budget was in surplus by $48.3 billion last month.

It was the largest surplus for any December on record.

The budget was boosted by higher quarterly corporate tax receipts and high individual tax withholdings because of year-end bonuses, according to Bloomberg News.

However, for the first three months of the budget year, which began Oct. 1, the budget deficit totals $105.5 billion - up 31.3 percent from the same period a year ago.

So far this budget year, revenue is up 5.7 percent to $606.2 billion. But spending is rising at a faster pace, increasing 8.8 percent over the same period in the 2007 budget year, to $653.9 billion.

The rise in spending reflects sharp increases in defense spending and in government health-care spending.

The Congressional Budget Office and the Bush administration will in coming weeks provide updated estimates for the deficit for the current 2008 budget year, which runs through Sept. 30.

The administration's new forecast will be part of the 2009 budget it will send Congress on Feb. 4.

In the summer, the administration estimated the 2008 deficit would be about $50 billion higher than the 2007 imbalance of $162.8 billion, which was a five-year low.

The Bush administration says its policies, if followed by the next administration, will return the budget to an annual surplus in 2012.

But private economists predict that deficits will start rising in coming years.

They cite the ongoing costs of wars in Iraq and Afghanistan and higher costs for big government benefit programs such as Social Security and Medicare as 78 million baby boomers reach retirement age.