Analysis of the Deficit, Fiscal Cliff, and US Debt
3/20/2013 Daily US Cash Deficit
The US Daily Cash Deficit for 3/20/2013 was $13.4B driven by the third round of Social Security payments and $6B of tax refunds.. Through 20 days, the March 2013 deficit stands at $74B..$15B worse than March 2012 at this point, though about half of that is likely some Social Security timing. More or less, the two months are quite similar, with outlays fairly flat, and revenue gains related to tax hikes being offset be revenue losses elsewhere and higher tax refunds…which we account for (correctly) as negative revenue. With seven business days left, I don’t expect any large surprises… 3/2013 looks to be on track for a deficit in the ballpark of last years $139B…less $15-$30B of outlay timing that will likely go out 4/1 instead of 3/30 like in 2012 due to the way the weekend falls.
It’s a bit early to begin dreaming about April, but let’s take a quick glance anyway. April is usually the shining star of the year, aided by everybody’s favorite holiday…Tax Day!! All of those poor fools who decided not to give Uncle Sam an interest free loan by over witholding trudge down to the post office, lick a crusty 5 year old forever stamp, and grudgingly drop a big, hopefully not hot, check in the mail for good old Uncle Sam. Because of this, April sees about $130B of additional revenue, and is generally the “least worst” month of the year. Last April posted a Surplus of $59B, breaking a 43 month streak of deficits going back to 2008. That sounds like a good initial estimate….Assuming revenues continue to outpace 2012 by ~10%, this will likely be more or less offset by increased outlays related to the same March timing issues discussed above. The wildcard is going to be that $15B Medicaid payment, and the potential for even larger than 10% increases in revenue. I don’t know how this will play out, but there were reports that perhaps $100+B of income was shifted into 2012 primarily by corporations and high net worth individuals. (anybody remember all those “special” dividends”?) 4/15 would be the last chance to pay those for individuals…so maybe we’ll see a 15-20B pop?? I wouldn’t count on it, but it’s just another wildcard out there.