Intragovernmental Holdings

The US Daily surplus for 12/24/2012 was $12.1B pushing the surplus for the month to 29.4B. With four business days remaining, it is a very real possibility that we could end December with a surplus for the first time since 2007. I’ll go ahead and take one on the chin and further revise my estimate down to 0, +/- $10B for the month of December. As it stands, revenue is up $28B and outlays are down $34B for a $62B improvement over last year through 24 days. While the outlay improvement is primarily a timing issue, there is no explaining away the revenue improvement…let’s see if it sticks in January.

As expected, revenue continues to pour into the federal coffers leading to a $55.6B Surplus for 12/17/2012, bringing December 2012 to a surplus of $31.6B through 17 days. There are still a lot of days left, but with the majority of the corporate taxes in the books, there is a noticable increase in tax revenues over last year. If revenues continue to be strong, and costs stay on trend, we could be very close to a surplus by month end, which would be the first since 2007. I can’t prove this, but It is possible people and companies are making financial moves to pull profits into 2012’s low tax environment and push losses into 2013. Whatever the case, from a daily deficit perspective, the next month or so looks to be fairly smooth waters leading up to February, which will likely be a $200B+ deficit.

The Daily Surplus for 12/14 was $19.8B, bringing the deficit for the month of December down to $24B through 14 days, an apparent $38B improvement over December 2011 through 14 days.

That may sound good, but most of the apparent improvement this month is due to timing. First off, about $30B of payments for 12/1 went out 11/30 because of the weekend, and second, the timing of corporate income taxes, due 12/15, was also thrown off by the weekend, but this should work itself out of the noise in the next day or two.

Now let’s take a look at Revenue and Outlays, which of course we subtract to get to the deficit. Revenue for 12/14 was $30.9B, making it the highest revenue haul since 9/17. The key driver in both of these dates, as mentioned above is the quarterly corporate income tax due around the 15^th the third month in every quarter. Also adding to revenues was an $8B contribution from TARP, the gift that keeps on giving, at least from a deficit perspective. When analyzing the deficit from a cash perspective, we counted TARP as a deficit when the cash went out the door in 2008/2009. However, that money wasn’t really all lost, as a sizable portion of TARP was, and continues to be paid back. Today’s $8B payment is the first significant payment of this fiscal year. FY 2012 had a total of $66B, so the run rate seems to be slowing exactly as one would expect.

Through 14 days, December 2012 revenue is running $14B behind last year, though I suspect this is all timing related to how the weekend fell versus last year. I’ll be more impressed if the number holds through this Friday.

Moving on, total outlays for the day were $11B with the only significant outlay being $2.8B for Military Active Duty Pay. This brought the December 2012 total to $143B, $23B under last year, primarily due to timing.

All in all, 12/14 was a pretty good day from a deficit perspective. At the end of the day, debt outstanding was reduced $10.B and cash in hand increased  $10B, bringing the debt limit cushion(Cash + borrowing ability) to $112B. Look to see another sizable surplus 12/17 and above average revenues for the rest of the week. I will do some more forecasting at the end of the week when we have a more complete data set, but for now, I am still estimating the December 2012 deficit comes in somewhere around $30B.