January 2016 Cash Surplus

The US Daily Cash Surplus for January 2016 came in at $52B beating January 2015’s $28B deficit by a whopping $80B. However, don’t break out the party hats just yet…There were 3 large timing events that accounted for most of the beat.

2016-01-31 USDD


At first glance, revenues were up $18B good for a 5.7% YOY gain. Last January about $10B of refunds went out at the end of the month, and since I account for refunds as negative revenue, it reduced reported revenue by that amount. In 2016, those early tax refunds did not go out in January…if we back that benefit out, the YOY gain is $10B lower, good for a 2.5% gain. Still not too shabby considering there was one less business day…my baseline was 3% revenue and spending growth, so no shockers yet. In theory…January’s gain will be offset in February as refunds simply slide right a week or so…assuming everything else stays more or less the same…so look for weak(er) February revenues.


Outlays show an apparent $61B drop…but it turns out it is almost all timing. First up, a lot of payments that would have been due in early January were pulled into December due to the timing of the weekend/holiday. This left January 2016 ~$30 short since this did not happen in 2015. Second, January 2015 had extra cost as payments due in February were pulled forward due to the timing of the weekend…lets call that $30B as well. So at the end of the day, Jan 2015 had $30B of extra cost, and January 2016 is $30B short…causing an apparent $60B delta, when the truth is, everything was more or less the same. I will note that this aside, some cost categories including defense vendors, medicaid, and education were either down or up less than I expected. However, it was just one short, and timing tainted month…I’ll give it a few more before I get excited about any of those misses.


The three timing events noted above combined to give us our first January surplus since 2007….ahhh…the good ‘ol days!! Enjoy it while it lasts…February is refund month so we probably have a $200B+ deficit coming up


Even taking into account timing, it was a decent start to 2016. with moderate revenue growth and outlays looking about flat….for now. The next 3 months should be exciting (as far as this topic goes anyway) as refunds pour out, and 2015 taxes pour in. As always….Stay Tuned!!

December 2015 Cash Deficit

The US Daily Cash Deficit for December 2015 was $3B bringing the 2015 full year deficit to $539B.

2015-12-31 USDD_B


Revenue was an interesting story this month ending up at a solid but unremarkable 3.6% gain. However, Looking at the details, we had withheld taxes at +2.9%, corporate taxes down 9.4%, “other” reciepts down 36.4%, and GSE dividends down 68%, all offset by our good buddies at the Federal Reserve, whose earnings went up from $9.3B last year to $29.3B this year.  Historically, the Federal Reserve makes a cash payment to treasury every Wednesday in the ballpark of $1.5B-$2.0B. Months that have 4 Wednesdays will typically have $7B-$8B of revenues from the Federal Reserve, months with 5 will be closer to $9B. So I was a bit surprised Monday 12/28/2015, when I saw a $19B payment from the Federal Reserve spiking revenue. The recently released Monthly Budget review provides some insight. Apparently the FAST  Act(Fixing Americas Surface Transportation) signed into law in early December has a few revenue provisions including selling oil from the strategic petroleum reserve, and it sounds like forcing the Federal Reserve to pay fewer dividends to it’s member banks and therefore submit more of their surplus to Treasury. I can’t argue with that, though I’m not yet sure what magnitude of increase we can expect going forward.  An extra $20B per month would be $240B annually, which would be a nearly 7% baseline increase for 2016 vs 2015…all else equal. That sounds way too high though, my guess would be that this December $20 payment was a one time catch up or something… we’ll find out over the coming months.

Moving on, without the extra $20B from the Federal Reserve, revenues would have been down, despite having an extra business day, which is never a good sign. October was also negative, so if we see another negative in January it will probably be time to start getting a bit concerned.  For the full year, 2015 Revenues landed at  $3.497 Trillion, up $195B and 5.9%. Not too shabby, even though nearly all of the gains were in the first 4 months, followed by 8 months of mediocrity.


Outlays were up $31B and 9%, primarily on a timing event I missed in my forecasting that pulled $23.4B of SS payments due 1/3/2016 to 12/31/2015 due to the weekend. For the full year, outlays were up $126B and 3.2% vs. 2014. If we back out the timing event, we get a 2.6% YOY gain.


For the full year, we had a $68B improvement in the cash deficit pulling it down from $607B in 2014 to $539B to close out 2015. This marks the sixth year in a row of continuous improvement over 2009’s disastrous $1.611T cash deficit.


The top line of a $3B deficit wasn’t terrible, but the key takeaway from December is that revenues look to be in trouble. January will give us a better idea if this is the case, and we should know for sure by the end of tax season in April. For now, I’m going to guess that for 2016, revenues and outlays will both be up ~3%, and the cash deficit will stay in the ballpark of $500B.

November 2015 Cash Deficit

The US Cash Deficit for November 2015 ended up at $93B for the month on $221B of revenues and $314B of outlays. This, plus a ~+20B adjustment of YTD deficit due to true up the end of “Extraordinary Measures” (EM) brings the 2015 deficit  to $535B through 11 months. This adjustment is due to the fact that during “EM” I am unable to back into amortized interest until Treasury uncooks their books….in this case for 7 months at ~$3B per month.

2015-11-30 USDD


Cash revenue was up $11B, or 5%…not bad, but about what we would expect from an extra business day. Federal tax deposits were up 8.2%…which is a solid number….included in that corporate taxes were up nearly 14%. This is consistent with a base line of ~5% and an extra business day. For the year, revenues are up 6.1%…down a little from last month’s 6.3% rate. All together, a solid revenue month, but not solid enough for me to shake a suspicion that baseline revenue growth is slipping below our 5% target which is what we need to offset the growth in outlays and keep the deficit flat around the ~$500B per year mark.


Cash Outlays were up big at first glance….$+30B and 10%. However, the extra business day and timing of interest explains most of that, with our expected increases in SS, Medicare, and Medicaid being offset to some degree by decreases in “Other”….whatever that is. All in, we are still around +3% on outlays for the year…with only one month to go I wouldn’t expect much movement from here even if there are some December surprises.


The November deficit at $93B topped last year by $18B as an increase in revenue was not enough to offset timing of interest payments and an additional business day. For the year, we are now sitting at $535B vs $621B last November and poised to end up under $500B for the year once December’s likely $50B surplus flushes through.

Default Day:

As expected….there was no default… the debt limit was suspended in early November ending 7 months of EM, and pushing the next showdown out to March 15, 2017….likely followed by another 7+ months of “EM” shenanigans.


Another okay, but not great month. The first 4 months of 2015 started out with a YOY revenue growth of a little over 10%. Since then, the rate is 3.9%, barely enough to keep the deficit constant with outlays growing at 3%. I’ve been wrong on this before, but it is looking more likely that the 2016 deficit will surpass 2015 ending 6 straight years of improvement. As always…stay tuned!!

2015 Debt Limit Day After…. Debt Outstanding Increases $339B

So the numbers are in  and Treasury has officially brought all of the last 8 months of “Extraordinary Measures” IOU’s they’ve been hiding and pushed them back onto the balance sheet…

2015 End of (EM) 11-2-2015

+$339B in a single day…unfortunately not too surprising…last time around (October 2013) it was $328B. Yawn…. The new deal suspends the debt limit until 3/15/2017…so we’ll get to do this all over again in about 16 months. Booooo!!! This is getting boring….can’t they find a new stupid game to play?

US Daily Cash Surplus 10/26/2015

The US Daily Cash Surplus for Monday 10/26/2015 was $6.5B bringing the October deficit to $47B with 4 business days remaining.

2015-10-26_B USDD

This is my first update of the month so lets start at the top. Revenue is down $11B making it unlikely we are going to make it to our +5% target this month. Two things stick out…first, since I adjust the timing for days of the week, October 2014 has an extra business day…an advantage that will stick for the rest of the month. Second, last year there was $7B of cash inflows related to the Justice department…. bank fines if memory serves. In any case, these will not repeat, leaving a $7B disadvantage for 2015. If you pull those items out, October would probably look ok on revenues, but certainly not great.

Outlays are also down….This is due to the one less business day mentioned above, and also timing of the final Social Security payment of the month which goes out Wednesday 10/28 this year, but 10/22 last year. Once you add that back in, and factor in that Payments due Sunday 11/1 will instead get pulled into October this year and go out 10/30…October 2015 outlays are going to be up quite a bit (offset in November of course going the other way).

I didn’t make an official deficit forecast for October, but I did mention $75B in the September write up. I didn’t take timing into consideration in that, so I would add about $35B to that and call it at around $110B. That seems fairly reasonable

Debt Limit:

It is in the news now that a deal is in the works to raise the debt limit before Lew says we will hit it next week. I have been predicting early February for ~6 months or so, leading me to believe either I overestimated the depth of the “Extraordinary Measures (EM)” well, or perhaps more likely….they could always call it more or less whenever they wanted to…and a November battle is politically better for them than a February battle in the middle of tax refunds and presidential primaries. In any case…I think this is great news because trying to account for Extrordinary measures is a pain in the a@% for me….getting back to regular ol’ shady government accounting without any advanced countermeasures will make my analysis much simpler.

As it stands, the cash balance is $54B, and we are likely to run a ~60B deficit over the last 4 days of October, so if EM really is about tapped out, I suppose next week really could be Default day…stay tuned we’ll know in about a week.