US Daily Cash Deficit 2/20/2014

The US Daily Cash Deficit for Thursday 2/20/2014 was $19.8B bringing the February 2014 cash deficit through 20 days $150B with 6 business days remaining.

2014-02-20 USDD

After almost no refunds 2/19, 2/20 has a huge day coming in at $17B…as noted earlier today…this series has become unpredictable, so all I can really do is sit back and watch. As of today, tax refunds are up $15B, and 18% YOY. Withheld taxes are up 2% for the month, but will likely end the month closer to +10%, which is actually quite good…and surprising to me, but we’ll definitely take it.


US Daily Cash Deficit 2/19/2014

The US Daily Cash Deficit for Wednesday 2/19/2014 was $14.0B (**corrected…originally posted as $8.8B**) pushing the February 2014 deficit through 19 days to $130B with 7 business days remaining.

2014-02-19 USDD

Refunds plummeted for the day down to $388M…from $6.8B yesterday. I guess the bottom line is that at least day to day, tax refunds have become less correlated with prior year numbers. Who knows…maybe it’s a process change, maybe it’s being driven by refund processing or even taxpayer filing patterns I can’t imagine. But whatever the reason, there is no denying that there is more randomness….and therefore less predictability.

Thanks to the drop in refunds…which offset revenues, 2014 has pulled back to even with 2013 in that category. Outlays are still way under at $-44B. However, I think we’ll come close to catching back up by the end of next week when once again outlays due Saturday 3/1 will get dragged forward a day into February. This happened last month, and accounts for about $35B of the -$44B we are currently down….the rest I suspect we will catch up with since per our sync….2013 is ahead by one business day over 2014, but that will sync back up next Friday as well. Assuming that plays out….and outlays will be more or less flat…the story becomes revenue…and refunds…

January 2014 Update: Social Security Enrollment

This report was finally released yesterday…about a month late for some reason, but at least we have it now. So…just to recap, The umbrella of SS covers about 58M individuals. 38M are retired individuals, about 9M are disabled workers, and the balance are generally spouses/widows/children of retired or disabled workers.

Each month, obviously we have new people retiring, some say 10k per day….and of course we also have people passing away each month. Note that retirements especially are seasonal, and I suspect to some lesser degree, so are deaths, so it is important to compare the current month vs the prior year as this is far more relevant than the prior month.

I track this monthly because SS is a huge piece of the federal budget, and secondly, I am on the lookout for a substantial increase in retirements at some point over the next few years, and I believe that this report will provide evidence of this in real time.

Fortunately, the January 2014 report does not have any evidence of an impending spike. Traditionally, January usually has a large increase in retired workers….I guess people try to retire near the end of the year, and get all of their paperwork completed by January.??Personally, I’d choose to retire probably in the fall….depending on where the tax brackets were in relation to my income, but that’s just me…maybe I’ll cover it in a “fun with math column” when I retire…in about 35 years:)

This January was no exception, with an increase in retired workers of 150k, but 21k under Jan-2013’s 171k, but right in line with Jan-2012 at 153k. Annualized, we are adding 1.15m people per year to the retirement program…roughly the same pace as last year. So while there is no spike…yet…we are still adding a huge number of people to the program.

Quick math…adding 1.2M people, at $1300 per month….So divide 1300 by 12.4%(ss withholding rate)….and you get that it takes an additional $10,484 of monthly income by a worker to support each new retiree. So if for each retiree, we added one new job at 126k per year, we’d be more or less ok right?  Well, there probably aren’t too many of those…so scratch that. If you happen to believe the federal jobs report, we added 2.2M jobs over the last 12 months, including 113k in January. So if we pencil this all out….we need each marginal worker…all 2.2M of them to contribute $8500 per year to cover the 1.2M new retirees. again…divide by 12.4%….If they all can just average $69k of pay, we’ll be fine. Still a stretch huh?? One last try. How many minimum wage employees (assuming Obama’s new $10 rate passes) do we need to add per year just to pay for the additional 1.2M retirees? “Only” 7.5M….per year indefinitely.

So while the long run still appears to be hopeless, that’s been known for a few decades now. There was some good news in the report. For the first time since 1997, the number of disabled workers actually showed a month over month drop falling 12k to 8.930M from last month’s record 8.943M. Drops elsewhere pulled the consolidated number to only +100k overall vs last year’s 146k January total increase. That’s a pretty big drop….it will be interesting to see the February report… this just a blip, or could our trend actually be headed down a bit?

US Daily Cash Deficit 2/18/2014

The US Daily Cash Deficit for Tuesday 2/18/2014 was $21.3B as strong revenues were overwhelmed by $35B of interest payments and continued strong tax refunds.

2014-02-18 USDD

Taxes withheld are looking ok at this point…and will probably end up somewhere around +5-10% if the current trend continues.. However, this is being offset by tax refunds up $11B YOY and about $2B less of corporate taxes and taxes not withheld. For the month, refunds are up 17%. Now, I don’t really expect that pace to continue through April, but if it does the net reduction in revenue would be ~$40B over the 3 month period. It’s not huge, but it’s not going to help our revenue quest.

In other news, we see the lack of a debt limit reflected in the DTS now, and a roll off of about $68B of “extraordinary measures” conducted since 2/8.

Through 18 days, the cash deficit for February 2014 sits at $116B, and looks to be headed past $200B unless we see a reversal in the pace of refunds. Stay tuned.

US Daily Cash Deficit 2/14/2014

The US Daily Cash Deficit for Friday 2/14/2014 was $9.5B bringing the February 2014 deficit at the halfway point to $94B.

2014-02-14 USDD

We have a huge timing issue on the outlay side with the 2/15 interest payment of ~30-35B being included in the 2013 data…but not in 2014 due to our adjustment of the days. With the weekend and the holiday, I guess those didn’t go out until 2/18 (today) in 2014…so we should be synced back up tomorrow.

No huge refund variance today…right around $8B…a little under last year, but same ballpark at least. Revenue down another $1B on the day though timing is clearly part of it…this time corporate taxes, which should sync back up tomorrow.