Washington Extra – Surplus shocker!

May 11, 2012

Speaker of the House John Boehner is seen in February 28, 2012 file photo on Capitol Hill in Washington. REUTERS/Larry Downing

For anyone who thought the term “budget surplus” had been exorcised from the U.S. government’s lexicon, the Treasury Department offered up some interesting news today. 

For the first time since September, 2008, the government’s monthly receipts outpaced its expenditures, resulting in a $59 billion budget surplus in April. The end of the 42-month drought does not mean Washington has solved its budget problems. Indeed, for the first seven months of this fiscal year, $720 billion in cumulative deficits have been racked up.

But you’ve got to start somewhere and April’s result hinted at a slowly improving economy. Other such bits of evidence surfaced in government data released on Thursday: New applications for jobless benefits fell last week and March trade figures showed consumers gobbled up foreign goods at a fast clip while U.S. exports surged to a record high.

House Speaker John Boehner, the highest ranking elected Republican, wasn’t convinced that it was “Morning in America” for the U.S. economy (to steal a phrase from the ever-optimistic Ronald Reagan). “The American people are focused on the economy and they are asking the question, ‘where are the jobs,'” Boehner said at a press conference.

Here are our top stories from Washington…

Drop in jobless claims eases US labor market fears – The number of Americans submitting new applications for jobless benefits edged down last week, easing concerns the labor market was deteriorating after surprisingly weak employment growth in April. Another report showed the trade deficit widened in March, with exports surging to a record high and a rise in imports highlighting the economy’s firming underlying demand. For more of this story by Lucia Mutikani, read here.

US logs first monthly budget surplus in 42 months – The United States posted a budget surplus for the first time in 42 months in April on a rise in tax receipts and a drop in government spending, although it partly reflected a shifting of some payments to other months. While the one-month surplus does not signal a turnaround in U.S. indebtedness – the nation is still projected to run a fourth straight year of deficits topping $1 trillion – it could be taken as a modest reflection of a slowly improving economy. For more of this story by Mark Felsenthal, read here.

Romney apologizes for bullying incident at school – Republican presidential nominee-in-waiting Mitt Romney apologized for high school pranks that may have hurt others, after a report that he and other students at a Michigan school bullied a student who was presumed to be gay. “I did some dumb things and if anybody was hurt by that or offended … obviously, I apologize,” Romney said in response to a Washington Post story that detailed a 1965 incident in which Romney pinned down a fellow student and cut his hair. For more of this story by Steve Holland, read here.

Obama to bring in millions at Clooney fundraiser – Fresh from declaring his support for same-sex marriage, President Obama heads west for a political fundraising spree that will culminate in a multi-million dollar extravaganza at the home of Hollywood star George Clooney. Obama’s campaign has revved up its supporters with teases about Clooney, encouraging fans to donate even $3 online for the chance to meet the movie star and the president in Los Angeles. For more of this story by Jeff Mason, read here.

Postal Service loses $3.2 billion in Jan-March – The Postal Service said its loss widened to $3.2 billion in the first three months of 2012 and repeated on Thursday its warning that it will likely default on payments to the federal government unless Congress passes legislation offering some relief.  “We are aggressively pursuing new revenue streams and reducing costs in areas within our control,” Postmaster General Patrick Donahoe said. “These actions are not enough to return the Postal Service to profitability.” For more of this story by Emily Stephenson, read here.

Sipping, not guzzling, fuel on Afghanistan’s frontlines – To sustain themselves on Afghanistan’s rugged frontlines, U.S. Army troops have learned to sip, not guzzle. The liquid they must conserve is JP-8, a kerosene-based, all-purpose fuel the Army uses in aircraft and Humvees and to generate power for computers, lights and heat. Consumption of JP-8 – short for Jet Propellant-8 – often comes at a grim cost. –  For more of this story by Deborah Zabarenko, read here.

Bernanke: even worthy borrowers can’t get mortgages – Banks have become so restrictive in making mortgages that many worthy home buyers are being frozen out of the U.S. housing market, and lending practices are not likely to loosen any time soon, Federal Reserve Chairman Ben Bernanke said. For more of this story by Glenn Somerville, read here.

Senate leader eyes quick passage of Ex-Im Bank bill – Senate Majority Leader Harry Reid said he hoped the Senate would pass a bipartisan bill by the end of the day to renew the Export-Import Bank’s charter, which is set to expire on May 31. In a speech on the Senate floor, Reid, a Democrat, said he hoped Republicans would cooperate in an effort to pass the legislation by a unanimous voice vote, instead of forcing a protracted debate on the bill. For more of this story, read here.

Afghan women fade from White House focus as exit nears – Shortly after sending U.S. troops to Afghanistan in October 2001, President Bush focused so intently on freeing Afghan women from the shackles of Taliban rule that empowering them became central to the United States’ mission there. But Obama’s lack of overt attention to Afghan women has led many to fear their hard-fought gains will slip away as the United States hands off security responsibility to Afghan President Hamid Karzai, with ever-present Taliban leaders still holding sway in much of the countryside. For more of this story by Laura MacInnis and Amie Ferris-Rotman, read here.

Political shift will make or break Rio+20 summit – The shifting sands of geopolitics, marked by rapid growth of big, emerging economies such as Brazil and China while traditionally rich countries fall behind, could undermine progress to define sustainable development goals at a United Nations conference next month. New divisions between old allies are adding to familiar disputes over finance and responsibility as preparatory talks in New York last week failed to find consensus, causing the United Nations to add an extra round of talks later this month. For more of this analysis by Valerie Volcovici and Nina Chestney, read here.

From elsewhere…

Chesapeake’s deepest well: Wall Street – Chesapeake Energy Corp. is taking in more money from bankers, other investors and its own financial bets than it is from its oil and gas. Chesapeake is expanding so fast that it takes in much less revenue from its oil and gas than it spends, leaving it stretched. Hence its business depends on deal-making: raise money from investors to acquire land and drill wells; sell the rights to the gas and oil in those wells; plow that money into new land and wells; repeat the cycle all over again.  For more of this special report, read here.

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