US Daily Cash Deficit 9/18/2013

The US Daily Cash Deficit for 9/18/2013 was $1.5B bringing the September Surplus through 18 days to $36B with 8 business days to go.

09-18-2013 USDD

Taxes “not withheld” continue to come in strongly as expected making up the ground lost yesterday and then some…perhaps a sign that  another strong finish is on deck?? Revenues are still down $3B vs last year, but if you take out the $20B Tarp revenue from last September and it doesn’t look half bad at +8%.

Using 2012 as a guide, the last 12 calendar days of last September posted an $8B deficit, suggesting that we would end this September at a $28B surplus. However, I have to think we’ll do better than that even if we don’t see an end of month revenue surge. Between moderately higher revenues, an extra day, and some generous contributions from Fannie/Freddie, we are probably on track for a $50-$70B surplus without any surprises.

Monthly Treasury Statement Vs. Daily Treasury Statement

I don’t think this will be a news flash for anyone, but as detailed here the Daily Treasury Statement (DTS) released daily by Treasury is the primary source of data used for all of the US Daily Cash Deficit posts. However, there is another Treasury report, the Monthly Treasury Statement (MTS), that the rest of the world is much more familiar with. Any time you hear an “official” revenue, outlay, or deficit number….odds are it came from the  MTS.

Now, you might be tempted to assume that the MTS is just the sum of the DTS…rolled up into a nice government report. Unfortunately, this simply is not the case. On several occasions, I spent more hours than I care to admit trying to tie the two out, failing miserably each time. After a chat with Treasury staff, I found out why…they are generated from completely independent data sets and simply are not reconcilable. During my attempts…I came across many many examples where the numbers from each report…in categories you would expect to be straight forward like NASA expenditures, were in fact off by 50-70% or more. As a result, as I’ve said before, I don’t like the MTS and I don’t trust the MTS.

Unfortunately, when I started blogging about the daily deficit last year, I made the assumption that for all it’s flaws, the MTS and the DTS were close enough. I based this on a comparison of FY 2011 and FY 2012, which over the twelve month period, despite monthly deltas, on the year was only off by $7B in 2011 and $3B in 2012…close enough for government work right?

Well, a few months ago, I decided to pull the historical MTS data and line it up with the DTS data, and while sure enough the 2011/12 FY are pretty darn close, not much else is. In fact, the average TTM difference over the last 5 years is $79B. At present, the TTM delta is $95B, with the cash deficit being $95B higher than the reported MTS deficit. Lesson learned…2 is not an adequate sample size.  This is likely to impact my world famous CBO vs CBO challenge, but I’ll tackle that another day.

While I can’t tie out the MTS to the DTS (since it’s not possible), I do have a pretty good idea of where at least some of the variance lies. The first thing you will notice about these two series is that DTS revenues are almost always higher than the MTS. The reason for this is that it represents the cash flows in for the entire federal government….and then some. My theory is that some of what ends up on the DTS is ultimately excluded from the MTS with the most prominent example being the US Postal Service. It would seem that USPS runs it’s business through treasury bank accounts, resulting in cash source of about $87B per year. On the outlays side….they have gone out of their way to make it difficult to track. They split out postal service money orders, but apparently not op costs. I assume that payroll gets grouped together with “Federal Salaries”. So as far as I am concerned, I can probably assume that the $87B of cash in is offset by probably $100B or so of outlays, contributing to about $13B of deficit (lot of assumptions there) However, on the MTS, you can probably bet that the revenues and outlays are completely excluded, and somewhere treasury makes an entry indicating a $13B loan…that I’m pretty sure will never be repaid…thus excluding it from the official deficit calculations. I catch it in the cash deficit…they purposely exclude it.

This is just the largest item….I’m sure there are more, plus untold amounts of “modified accrual” shadiness going on that account for the differences. So, I’ll just go ahead and say it….in my opinion the MTS is a bogus report that simply can’t be trusted. When all else fails….all we can rely on is the cash flow statement, and the DTS is the only timely reliable source of that for the time being. As long as government accountants can slice and dice and exclude whatever they want, you simply can’t trust the reports they generate.

So…why do I trust the DTS??? you probably are wondering? Well, I don’t dismiss the possibility for shadiness, but for the most part, the DTS is verifiable. Cash in less cash out damn well better be equal to delta cash and delta debt. Debt is separately verifiable, and cash is just about the last thing you want to lie about because it is the first thing any auditor is going to look for. Finally…these reports are generated daily with a 24 hour turnaround. Creating fraudulent financial statements takes time (I assume 🙂 ) , so the risk here is less than something bureaucrats have a few weeks to fiddle around with.



US Daily Cash Deficit 9/17/2013

The US Daily Cash Surplus for 9/17/2013 was $3.0B as $9.4B of taxes “not withheld” were deposited in federal accounts Tuesday resulting in a rare Tuesday surplus. Still…revenues edged down about $1B from year ago…could be small timing issues, but we won’t know for a few more days.  Remember this is the category that surged 40% YOY back in April and 16% in our last quarter end (June).  With 9 full business days remaining, they are currently down 1%. It’s not time to panic…yet…we should continue to see strong inflows from this source for the rest of the month, but obviously this isn’t where we want to be with more than half of the month already in the books.

09-17-2013 USDD-C

On outlays, I have a correction to make. Treasury issued a revised DTS for 9/3, with the net effect being a $14B decrease in outlays. It was issued a few weeks ago around the time I was on vacation, but I just glanced at it today and corrected my database…The revised numbers actually make a lot more sense. All month long, I’ve been seeing a ~+$40B of outlays, while timing was only explaining about $30B. So with the revision, we are at +28B, which indicates a small marginal reduction after adjusting for timing, consistent with what we would expect with sequestration ongoing. Yesterday I made some comments indicating that reaching the $70B surplus I had originally forecast was going to be a challenge…I’ll need to re-evaluate that in light of this $14B pickup, but I will probably wait for a few more days of data.

US Daily Cash Deficit 9/16/2013

The US Daily Cash Surplus for 9/16/2013 was $62.1B as the much anticipated quarterly corporate taxes started flowing in….soon to be followed by individual quarterly payments over the rest of the week. In yesterday’s USDD, I mentioned that the year ago surplus (9/17/2012) had been $54B, and that topping that by $5-10B would be a pretty good indicator. We got +$8B….which is pretty good….it doesn’t Wow!! me, but it should be seen as a pretty solid sign that revenues are not going to fall off a cliff or anything(well…except for the TARP piece).

09-16-2013 USDD

Yesterday’s revenue haul brings us back within $4.5B of last years revenue, now down only ~2%. Corporate taxes, which had been down 15% are now up 2%, and taxes not withheld are up to +8% from 4%. Revenues should continue to flow strongly for the rest of the week….what we are interested in is how strongly. My initial forecast for September 2013 was a $70B surplus. Although it is still early, this is starting to look like a bit of a stretch since we are currently at $20B surplus through 16 days. Pulling in another $50B surplus from here out looks unlikely, but if tax receipts over the next week or so come in stronger than expected, it’s not impossible, especially since September 2013 has an additional Monday (9/30) which we didn’t have last year. The combination of the extra day of strong Monday inflows could be enough, but I won’t be holding my breath.


It did just occur to me that Fannie and Freddie will be making their quarterly payments to treasury later this month…Last year, that was good for about $5B. I wouldn’t expect another $60B payment payday loan like we saw in June, but It will probably exceed last year’s $5B by a healthy margin, making the $70B a bit more likely than I implied when this was originally posted

US Daily Cash Deficit 9/13/2013

The US Daily Cash Surplus for 9/13/2013 was $11.2B pulling the September 2013 cash deficit through 13 days to $42B.

09-13-2013 USDD

You may notice that revenue, which had been up about $8B vs 2012 has flipped and is now down $12B. Most of that is due to a $21B TARP payment received a year ago compared to a meager $42M yesterday. TARP “revenue” has more or less slowed to a trickle at around $2B per month and is no longer a material source of revenue. As we have been expecting, we received about $10B of corporate tax revenue Friday compared to $12B a year ago, but given the timing, I would think there is a decent chance we catch back up with Monday’s haul.

On the month, while taxes withheld are up 11%, corporate taxes are down 15%, excise taxes are down 1%, and taxes not withheld are up a meager 4%. This, along with the large reduction in TARP revenue has pushed the YOY revenue down 9%. I don’t expect this to last….I am currently expecting September revenue to come in between +5% and +10%, but that is assuming we see strong gains across the board this week, especially in taxes not withheld and corporate taxes. Through 2 full weeks, we are about where I expected us to be…now we’ll just sit back and see whether the quarterly tax receipts come in.  The corresponding Monday from last year ran a $54B surplus, so we would hope to exceed that by $5-10B. We’ll know by 4 pm (E) tomorrow when the DTS is released.