WHAT SHALL WE DO WITH THE SURPLUS...:

Revenues outpaced spending by $116.50 billion last month, compared with a $59.74 billion deficit a year earlier, the Treasury Department said Thursday in a monthly report.

Last month's black ink was the first June surplus in five years--reflecting a broadly improving fiscal outlook as well as almost $67 billion in payments from the two mortgage-finance companies.

Other receipts are rising due to higher taxes and an improving economy, while spending is falling in part because of mandatory cuts.

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