Daily Treasury Statement

The US Daily Cash Deficit for 9/12/2013 was $3.6B bringing the September 2013 deficit through 12 days to $53B….just a tad lower than the $55B I forecasted before I left last week. (hooray!!…model accuracy is improving)

Of note, Revenue is up $8B (9%) YOY…a good sign, but outlays look to be running a bit hot…even adjusting for about $30B of timing. We are more or less expecting adjusted outlays to be down about 2%, not up, but this early in the month, it’s really too early to know if this is timing, or an actual increase.

Coming up…a lot of quarterly tax payments are due on 9/15(Sunday), so expect them to start coming in Friday 9/13 and then pour in on Monday 9/16, before trickling off. Last year, the similar Friday-Monday time frame posted an $84B surplus, so it is almost certain that the current $53B deficit will be sitting in surplus territory by early next week and stay there for the rest of the month, giving Treasury one last gasp of air before they hit the real debt limit of $16.7T+$300B of “extraordinary measures(EM)” accounting fraud. With the current cash balance at $21B, lets add $80B for the impending cash infusion and another $50B of EM left in the tank and say that we have about $150B left before Treasury runs out of cash and gimmicks. Using last year as a guide, I can see how this could get them into late October, maybe even early November…we’ll have a much better idea by the end of next week.

The US Daily Cash Deficit for 9/3/2013 was $34.7B starting off the month with a bang. The first round of SS payments went out at $24B, as did $6B of interest payments. This is all more or less in line with expectations…one down, 19 business days to go.

Revenues are a bright spot…kicking off the month at $+4B already, but honestly it is way too early to read too much into this.

The US Daily Cash deficit for 8/30/2013 was $36.5B bringing the August 2013 Cash deficit to $173B over the full month. This is a $38B improvement over last August at $211B, but after adjusting for about $25B of timing, it reflects a only moderate $13B improvement.

The story is all in revenues…up a meager $1B…less than 1% in a year that averaged 18% YOY increase over the first 6 months thanks to tax increases, moderate increases in employment, and of course, a $60B payday loan from Fannie Mae. Digging into the details…it wasn’t all gloom, tax deposits were actually up $8B…offset by an $8B decrease in TARP Receipts…an issue I detailed 9 months ago in We Won’t Miss TARP, But Uncle Sam Will. We’ll see this again in September as last year’s $23B of TARP revenue is likely to fall down to $1-2B or so.

Overall, I have to say this was clearly a disappointing month, but I’m not sure yet if the revenue slide is just an anomaly, or a bona fide shift in the trend. September should give us a pretty good idea which…especially the corporate tax deposits and the “taxes not withheld”. I’ll try to do a more detailed write up later in the month, but this will have to do for now…

The US Daily Cash Deficit for 8/29/2013 was $3.6B bringing the August 2013 Cash Deficit to $136B with one business day remaining.  Revenues finally surpassed the pace set by last year by $1B, and another $10B or so on 8/30 would put us at YOY growth of a meager 1%. For reference, the first 6 months of 2013 ran at +18%, and July came in at +9%.

Interesting…. though I am inclined to average them together….at 5% revenue growth. This, to me, seems like what may emerge as the new normal…not the 11-12% the CBO has forecast for the next couple of years. With a $3T annual revenue baseline, the difference between 5% and 11% growth is about $200B in 2014 and $400B in 2015….and it grows exponentially from there.

With one day remaining….expect a $30-40B deficit tomorrow (well…8/30) substantial, but less than the $64B deficit posted on Friday 8/31/2012, since that day included ~$25B of SS payments due 9/3, but pulled forward due to Labor Day.

Outlays are worth noting today since come tomorrow they will be thrown out of sync….are down $10B. Just scanning through the categories…Defense vendor payments are down $6B and Education Dept outlays are down $3B, with other categories having smaller variances up and down. $10B is a 3% reduction YOY….not too shabby given the offsetting increases in Social Security…but unfortunately, I don’t see this trend lasting beyond the fiscal year end. That said…I didn’t think sequestration would stand, and I was wrong (though pleasantly surprised) on that.