The US Cash Surplus for 5/16/2013 was $0.3B leaving the May deficit essentially unchanged at $99B.
Curiously…Treasury chose to pay down the public debt by $34B today…further pushing down cash from $69B yesterday to $36B today…with one day left before the debt limit is frozen in place. All this is very interesting…it was just a few weeks ago in the middle of surging April revenues and thus cash…that Treasury was issuing debt pushing the cash balance up over $200B. Now…with the debt limit expiration a day away…they appear to have done a 180…trying to hit the limit with just a few days cash in hand??
So for review… the problems don’t start when you hit the debt limit…they start when you run out of cash. So if your goal was to make it as long as possible after the debt limit expires without defaulting or delaying payments, you would want a huge cash stockpile…pretty simple stuff. On the other hand if you wanted to just get it over with…you would go in with almost zero cash, and threaten to stop mailing out social security payments and military pay next week. The more I think about it….this sounds like a better strategy for Obama. What could they possibly gain by drawing this out for four months?
But then…why all the stories about making it to October? Why have the CBO come out with the new deficit forecast…setting expectations so high… Maybe it is my expectations that are too high?
Maybe I’m getting ahead of myself….we’ll get the Friday finals Monday at 3…maybe they will issue a lot of debt. But if they don’t, and we end up with cash in the $30B range, we have about a 4 week “red zone” between 5/18 and the middle of June when we should see some heavy cash inflows. Using last year as a go by, the deficit over that period could be around $100B, but we would probably expect it to be a bit lower. That leaves say a $50B gap that would need to be filled by extraordinary measures, or perhaps a “special” cash infusion from Fannie Mae?? Guess we’ll have to wait and see
The US Cash Deficit for 5/15/2013 was $34.7B bringing the May 2013 deficit through 15 days to $99B.
As expected, a large interest payment went out for $30.4B…about $1B more than last years payment on the same day. So not earthshaking, but a small nudge in the direction we would expect given the ~$1T increase in debt since last year. Also of note, corporate taxes of $5.8B were received today…a shade lower than last year, but month to date is up 6%, though that’s only $0.4B, so immaterial in the big picture.
We are back to having timing differences, so comparing revenues and outlays isn’t especially useful, but more or less everything is in sync…no material moves up or down. Cash fell an additional $22B, bringing the balance to $69B with 2 more days before the debt limit kicks back in. This is a complete 180 from the path it looked like they would take just a few weeks ago where it looked like they were going to load up on cash and debt in anticipation of the 5/19 debt limit expiration. Hmmm…. I give up. I don’t see how they make it to October if they start with under $100B of cash, but you never know.
The US Daily Cash Deficit for 5/14/2013 was $3.4B bringing the May 2013 deficit through 14 days to $65B, actually $3B over 5/2013 through 14 days.
Though not perfect, 2012 and 2013 are more or less aligned again…each having 10 business days M-F x 2. This is important because revenues are highly correlated with the day of the week….with Mondays being the highest in general. So…we have a bit of a surprise in revenue…actually showing a decline of $0.6B. looking in the details, we see tax deposits withheld are up $8B, or about 11%.. Refunds are also down $2B, for a total increase of about $10B. However, this is being offset by declines in unemployment deposits from the states, federal reserve earnings, other, and TARP. Outlays are up a bit, but there is a lot of movement….Social Security payments are up $2.5B, with two more payments to go this month.
Tomorrow brings a triple whammy. A $30B interest payment, the third round of Social Security at ~$12B, and some payroll for government employees paid on the 1st and 15th…the military in particular adding another $3B. All in, a $35B deficit looks quite possible, pushing us up to around $100B for the month.