July 2014

The US Daily Cash Surplus for Monday 7/21/2014 was $2.5B bringing the July 2014 deficit through 21 days to $67B.

For the day…YOY revenues were flat with outlays gaining about $3B mostly on Medicare and Medicaid. Medicaid now sits at $19.442B, just ~$3B shy of the full month of July in 2013 at $22.744B. With 8 days remaining, and a run rate a bit over $1B a day…$27B is quite possible. That’s nearly 18% YOY growth for the month, but to put it in perspective….that’s about $50B per year annualized…or about the same annualized $ growth we are seeing out of SS…a program nearly 3 times the size of Medicaid.

That said….as long as revenue keeps growing at a +5% rate…the deficit will continue shrinking…just not as fast as it has been. And that’s why I watch revenues so closely… If we get 3-4 months in a row of minimal revenue growth….it’s time to start getting worried(more). April-May was close…but June was ok after adjustments for Fannie, and July looks to be over 5%

The US Daily Cash Surplus for Friday 7/18/2014 was $4.3B following Thursday’s $4.1B deficit, leaving the deficit relatively unchanged since my last report at $70B.

The first thing to note is that 18 days in…2014 revenue has finally zoomed past 2013…thanks in part to a $4.3B receipt from the Justice Department. Last July only had $547M for the full month…I can only assume this is somehow related to the multibillion dollar bank settlements we’ve been reading about for the last week or so. None of this was in any of my forecast…so it’s pure upside.

Chalk this up as another good day…hitting and exceeding that 5% revenue growth # I’ve been talking about is starting to look quite likely with 9 business days left in the month.

The US Daily Cash Deficit for Wednesday 7/16/2014 was $2.0B bringing the July deficit through 16 days to $70B with 11 business days remaining.

Thankfully…it turns out that revenue shortfall I discussed with the 7/15 deficit was apparently timing…apparently there is some withheld taxes due on the 16th…about $8B worth, which added to healthy Fed Reserve earnings   gets us back down to -$3B, which isn’t bad at all considering we will pick up an extra business day at the end of the month. Of course the same goes for outlays….which at $10B short now, appear to be on track to equal last year.

All together…it was a good day. We appear to be back on track to have a decent month…nothing phenomenal…but better than disastrous. Corporate taxes are standing at +12%, which is only good for $1B….but we’ll take it. In other news…Medicaid still appears to be running hot….perhaps at a 15% growth.

The US Daily Cash Deficit for Tuesday 7/15/2014 was $2.8B bringing the July 2014 deficit through 15 days to $68B.

Revenue stands at -$13B vs2013…well short of the $-5B I had hoped/dreamed about just the other day. Corporate Income Taxes did come in as expected…$6.8B worth, but were offset by unexpected (by me) reductions in withheld taxes and “other”. I suppose it could be timing still, but it doesn’t quite look like it. If it’s not…hitting that +5% target just got a lot harder…

The US Daily Cash Surplus for Monday 7/14/2014 was $8.3B bringing the July deficit through 14 days down to $65B.

At first glance…revenues and outlays appear to have collapsed….but in reality it’s all timing. Since we’ve adjusted for day of week…2013 is a day ahead… at Monday 7/15/2014. This usually gets us a better (if still imperfect) YOY comparison, but it so happens that a lot of things happen on the 15th of a month. On the revenue side…we generally see increased revenues, but the magnitude depends on the month…quarters are much higher. For July, we can probably expect $5-10B of corporate taxes. On the outlay side…we have Military Active Duty Pay which goes out the 1st and 15th, plus we also have interest payments due…again it varies quite a bit from month to month, but this year it will probably be about $5B.

We should be more or less back in sync after tomorrow…let’s hope our revenue hole has shrunk to ~5B or so…instead of the $16B we see in today’s chart.