Monthly Archives: March 2016

US Daily Cash Deficit 3/10/2016

The US Daily Cash Deficit for Thursday 3/10/2016 was $5.9B bringing the March 2016 deficit through 10 days to $92B.

2016-03-10-2016 USDD

Revenue looks down big….you may recall that last March received about $35B of additional revenue thanks to the FCC wireless spectrum auction. There is another one planned in 2016 at the end of the month, but it is unlikely the cash will be in hand until a few months after that. I saw one article that forecasted this auction will be even larger….in the $60B ballpark….guess we’ll just have to wait and see. Regardless, March 2016 is likely to come up short of last year by a large margin unless Treasury can pull a $35B rabbit out of their hat. In fact, without that FCC revenue, 2016 is currently down for the full year, but by less that $35B so there is at least some baseline growth for now. Outlays, with timing mostly flushed out are back over 2015 levels despite the ~35B YOY timing…suggesting healthy baseline growth here as well. When we kicked off the year, I assumed we would see 3% growth in both revenue and outlays. For now…it is looking like revenue is running a little under this and outlays are a little over. That’s not exactly a recipe for budgetary success, but it’s been way worse. Stay tuned…April could get interesting.

US Cash Deficit February 2016

The US Cash Deficit for February 2016 came in at $226B, topping last February’s $211B deficit and wiping out the January surplus leaving 2016 through 2 months with a 174B deficit.

2016-02-29-2016 USDD

Revenue:

Revenues were up$26B, good for +21% YOY vs 2015….not bad, but for the most part we can thank leap year and February tax refunds. I treat refunds as negative revenue rather than an outlay, so the $125B of refunds that went out to individuals in February pulled down total revenues to $149B, while an average month is closer to $300B. Leap year gave 2016 an extra day vs 2016, and Monday 2/29/2016 did not dissapoint, with a solid $23B of extra revenue. Refunds were more or less in line with last year, but having the small revenue base made the +21% possible.  With only 2 months. this also pulled the YTD up to +10%. So yes…the numbers look good, but there is a good chance it is all timing and one offs….and that the reality is we are still in the ballpark of +3%….we should have a much better idea by the end of April.

Outlays:

For the month, outlays were up$40B but that is primarily just last month’s timing rolling off. For the year, we are still under 2015, but that is due to the January 2016 payments that went out in December 2015, permanently pushing 2015 outlays up and 2016 down by ~$30B-$40B. We look to be burning through that benefit at a rate consistent with my estimate of ~+3% growth for the year, but it will take a few more months for that trend to solidify(if it exists).

Deficit:

Thanks to timing and leap year, the deficit is $65B under where it was last year through 2 months. Even though it doesn’t look particularly solid at this point, improvement is improvement…we’ll gladly take it….just don’t get your hopes up yet.

Summary:

Through 2 months, the headline numbers look pretty good, but I am a bit worried about revenues…specifically federal tax deposits which are the largest consistent revenue source in the budget. Through 2/28…they were up just 0.2% for the year compared to +4% last year. Thanks to a big leap day, the year is at +6%, but I’m not sure it will last long. If baseline revenue growth is only 0.2%….it could mean trouble is brewing.

Looking forward, refund season marches on, so we will probably have a March deficit in excess of $60B before hitting April, which will likely have a surplus in the $150-$200B range.