Budget Deficit

The US Daily Cash Deficit for Friday 2/28/2014 was $40.0B bringing the February 2014 Cash Deficit for the full month to $224B vs $229B last year.

It was an interesting month. Outlays were flat…up 1%. We still see declining outlays nearly across the board…except for SS, Medicare and Medicaid….where gains have…at least for this month washed out the reductions elsewhere. Due to timing, I don’t expect this to continue into March, but stay tuned for the rest of the year. Sequestration is just about a year old now, so those YOY reductions are unlikely to impress for much longer.

Revenue was even more interesting. Revenues stayed strong with withheld taxes ending up at +8%. Taxes not withheld were down 11%…but the amount was immaterial at -$652M…not sure that means anything for April or not. Deposits from the Federal Reserve more than doubled from $3.8B to $8.9B….so we have that money printing thing going for us. Offsetting this was tax refunds up $14B YOY at $128B compared to $114B last year. I don’t know if it is just timing or a bonafide 12% surge…we’ll have to wait until the end of April before we really know. And despite this…revenue(net of refunds) still ended up going from $95B last year to $104B, good for a 9% gain. Numerically I suppose that’s not quite as impressive as January’s ~10% climb from $289B to $317B, but a gain is a gain… we’ll take it.

Put it all together, and we have another strong month in the books with revenue clocking in just under +10% and outlays more or less flat. If we keep up this pace we could very well shave another $200B+ off the deficit this year getting us into the $400-$500B range. I’m skeptical….but I’ve been wrong before.

The US Daily Cash Deficit for Thursday 2/27/2013 was $8.1B bringing the February 2014 deficit to $184B with one business day remaining.

Just for fun, I have re-synced the days on day of month from day of week, so we are now comparing 27 days of 2013 to 27 days of 2014. Ballpark, I would guess a $35B deficit for 2/28, which would get us to $219B for the month vs. $229B last year. Outlays will be flat…maybe up a little, and revenues will also be up a little. Refunds are still a big question mark….historically, I’d guess maybe $4B-$5B. Any divergence from this rate will impact the deficit accordingly.

The US Daily Cash Deficit for Wednesday 2/26/2014 was $18.8B bringing the February 2014 deficit to $176B with two days remaining in the month.

Tax refunds were down from $14B last year (Wednesday 2/27/2013) to $10B, helping 2014 revenues push back ahead of 2013 by $3B. Other than that, revenues and outlays were flat. The final SS payment went out today…as it stands growth YOY growth….comparing the last 12 months to the 12 months before that..SS payments are up $57B, good for an 8% growth rate. So all else equal, we need ~$60B of additional revenue each and every year…just to stay where we are. That’s nearly $440 per worker…per year…and it’s cumulative. Food for thought….

Two more days to go….a lot could happen given the volatility, but breaking through $200B looks all but certain unless refunds collapse or for some reason that $35B of cost I am expecting Friday gets pushed to Monday. Best guess….$215B

The US Daily Cash Deficit for Tuesday 2/25/2014 was $10.4B bringing the February 2014 Deficit through 25 days to $157B with 3 business days remaining in the month.

Altogether, not much YOY change for the day, though refunds were a little higher and outlays were down a bit.  For the month, revenues still stand lower than last year by about $2B….with an increase in tax receipts being washed out by an increase in tax refunds. This could still go either way with the volume of tax refunds being the key unknown. Outlays, while down by quite a bit at this point due to timing, should more or less catch back up by Friday.

The US Daily Cash Surplus for Monday 2/24/2014 was $7.5B on strong revenues and a $3B drop in the pace of refunds. This drops the February 2014 deficit through 24 days down to $147B with 4 days remaining….still within striking distance of $200B.

As expected, refunds were volatile, dropping from $9.7B last year Monday 2/25/2013 to $6.7B yesterday (Monday 2/24/2014). What I didn’t expect was $3.3B of corporate tax receipts. Glancing back at past February corporate taxes, they generally trickle in at ~100M a day, building up to the 15thish when  $2-3B is received before tapering back down. February is not a big corporate tax month..2013 had $5.3B. We already saw our mid period bump, so I have no clue where this $3.3B came from…..maybe the WhatsApp guy cashed out???nah…too soon 🙂