Tax Receipts Surge, May Aid Deficit Cutting
WASHINGTON -- An unexpected surge in tax receipts in April may help cut the federal budget deficit this year, according to administration and congressional officials.</br></br>The receipts soared to about $120 billion from $91.44 billion a year earlier. While a large rise was expected because of tax-law changes and economic growth, the increase appears to be $5 billion to $10 billion bigger than anticipated.</br></br>"The Treasury is sitting on a humongous pile of cash," said Peter Davis, a vice president at Prudential-Bache Securities Inc. "Nobody had any idea of how massive it would be." Mr. Davis said he has narrowed his deficit estimate for fiscal 1987, which ends Sept. 30, to about $185 billion from as much as $200 billion.</br></br>Treasury and congressional analysts caution that it's too soon to tell whether the surge will mean a smaller deficit for the year; the high April payments could be offset by low receipts later. Moreover, slower economic growth, higher interest rates and increased federal outlays all could swell the deficit.</br></br>Reagan administration budget officials previously have said they expect a fiscal 1987 deficit in the range of $175 billion to $180 billion. The Congressional Budget Office estimate is $174 billion. In fiscal 1986, the deficit totaled $220.7 billion.