Daily Treasury Statement

The US Daily Cash Deficit for Friday 2/27/2015 was $39.4B bringing the February full month cash deficit to $211B, $1B over my initial estimate of a $210B deficit for the month. So hooray for wild ass guesses….even though my last guess was between $200B and $210B 🙂

February went off mostly as expected with a huge deficit thanks primarily to about $119B of individual tax refunds. Revenue ends up +$19B YOY, not too shabby, while outlays were up$4B. Put it all together and we had another OK month. For the year, revenue is up 3.7%, good for the slowest start since 2010 when revenues through February were down 2.7%. Outlays are flat for the year, which continues to surprise me, but that’s a good thing. SS/Medicaid/Medicare continue to increase….their combined YOY increase is 9%, good for $13B per month in extra spending, but this has been offset by interest timing, lower payments to defense vendors, and unemployment payments. Also helping has been what I suspect is the cash benefit of issuing debt at a premium. The YOY shift has gone from 5B of “expense” last year through 2 months as debt was issued at a discount, to an $8B benefit so far this year thanks to apparent premiums. It’s not material in the big picture, but if it continues I’ll probably need to make some adjustments.

So far, 2014 looks to be slow but steady revenue growth with more or less flat outlays. If this continues, we will continue to make progress in the deficit reduction arena, but it will slow to a crawl compared to prior years. Still, the year is young, and March/April have the potential for big surprises either way. After the April dust settles, we should have a much better idea where the full year is headed. Until then…stay tuned for March, which should have steady stream of tax refunds and some solid mid month corporate taxes…

The US Daily Cash Deficit for Thursday 2/26/2015 was $7.8B bringing the February 2015 Deficit through 15 days to $172B.

The most surprising thing about February so far is that refunds have kept pace with 2014. Looking at the YTD….2014 was at $124.5B compared to 2015 at 125.2B. In my forecast, I had reduced my expected refunds by about $10B due to all the hype about Obamacare….looks like maybe it was just that.

Revenues are up about $20B….$10B of that is refund timing, and the rest is bonafide revenue growth. Outlays are at +$6B….primarily interest payment timing…..which will be be offset by another interest payment at the end of the month….where ~$6B of interest payments slip to 3/2 due to the weekend.. Put it all together, and revenue is looking at about +4% on the year, with outlays more or less flat. If I had to guess….with 95% of the data in, Friday 2/27 will post about a ~$30B deficit pushing us just over $200B for the month, and just under my $210B forecast.

The US Daily Cash Deficit for Friday 2/20/2015 was $3.7B pushing the February 2015 deficit through 20 days to $139B.

Revenues are still looking ok at +$22B, with outlays more or less flat. Refunds, excluding the $10B of timing, are more or less on pace with last year. For the year, 2015 has $100B of individual tax refunds vs $99B last year…..so we aren’t seeing a drop off due to Obamacare  or anything like that, at least not yet. We have 5 business days left, and are more or less on track to hit a $200B deficit +/-10B or so. Through 52 days, revenue is up 4.6%, a bit worse than I had expected, and outlays are flat versus my expectation of 2-3% growth.

The US Daily Cash Deficit for Tuesday 2/17/2015 was $18.6B as strong post holiday revenues were overwhelmed by $37.5B of interest payments.

For the most part, our timing issues are behind us, giving us a fairly clean YOY comparison. Revenue is up a healthy $19B….About $8B of that is lower refunds….primarily timing related. I don’t really see a material slowdown in refunds due to “obamacare”…yet. Last refunds over the last 8 days of the month ran at about a $6.5B clip per day….if 2015 runs even $1B per day under that it could open up a big gap by the end of the month.

Outlays stand at +$5B, which is basically flat after pulling out the $6B of interest that slipped from January to February. Put it together and despite the $103B deficit, we seem on track to put a good month in the books as revenue is growing and outlays are flat. If we stay on this course, we have a chance to slide in under a $200B deficit, but it is really going to come down to refunds.

Shifting down to the second row of charts, 2015 revenue is looking ok…at +4%, with outlays pretty much flat.

The US Daily Cash Deficit for Friday 2/6/2015 was $9.5B bringing the February 2015 deficit through 6 days to $39B.

As expected, refunds dominate the chart, with 2015 back out to a $14B lead that is holding back net revenues in a big way. As it stands, revenue is down and outlays are up…..but adjusted for timing and pulling refunds out, it’s not so bad….yet. Withheld taxes show a glimmer of hope at +7% and $4B. While dwarfed by refund noise so far, this is by far the largest revenue source, so establishing a solid growth base here would be a positive development. For the year, this category is at +3.6% after a not so great January, but the year is young.