US DAILY DEFICIT

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 🙂

The US Daily Cash Deficit for Friday 2/21/2014 was $4.6B bringing the February 2014 deficit to $154B with 5 business days remaining.

No material movement on the day. Refunds were up a bit, revenue was down a bit, and outlays were up…leading to a loss of ~1.5B vs 2013…well within normal variations. Hitting a $200B+ deficit for the month looks like a sure thing given that Friday will likely have a ~$35B deficit, and we still have $12B of SS to go on Wednesday. The big wildcard is going to be refunds. Last year the last week of February sent out ~$30B of tax refunds….given how unpredictable they have been so far….Nothing within +/-$15B of last year would surprise me at this point.

The US Daily Cash Deficit for Thursday 2/20/2014 was $19.8B bringing the February 2014 cash deficit through 20 days $150B with 6 business days remaining.

After almost no refunds 2/19, 2/20 has a huge day coming in at $17B…as noted earlier today…this series has become unpredictable, so all I can really do is sit back and watch. As of today, tax refunds are up $15B, and 18% YOY. Withheld taxes are up 2% for the month, but will likely end the month closer to +10%, which is actually quite good…and surprising to me, but we’ll definitely take it.

The US Daily Cash Deficit for Wednesday 2/19/2014 was $14.0B (**corrected…originally posted as $8.8B**) pushing the February 2014 deficit through 19 days to $130B with 7 business days remaining.

Refunds plummeted for the day down to $388M…from $6.8B yesterday. I guess the bottom line is that at least day to day, tax refunds have become less correlated with prior year numbers. Who knows…maybe it’s a process change, maybe it’s being driven by refund processing or even taxpayer filing patterns I can’t imagine. But whatever the reason, there is no denying that there is more randomness….and therefore less predictability.

Thanks to the drop in refunds…which offset revenues, 2014 has pulled back to even with 2013 in that category. Outlays are still way under at $-44B. However, I think we’ll come close to catching back up by the end of next week when once again outlays due Saturday 3/1 will get dragged forward a day into February. This happened last month, and accounts for about $35B of the -$44B we are currently down….the rest I suspect we will catch up with since per our sync….2013 is ahead by one business day over 2014, but that will sync back up next Friday as well. Assuming that plays out….and outlays will be more or less flat…the story becomes revenue…and refunds…

The US Daily Cash Deficit for Tuesday 2/18/2014 was $21.3B as strong revenues were overwhelmed by $35B of interest payments and continued strong tax refunds.

Taxes withheld are looking ok at this point…and will probably end up somewhere around +5-10% if the current trend continues.. However, this is being offset by tax refunds up $11B YOY and about $2B less of corporate taxes and taxes not withheld. For the month, refunds are up 17%. Now, I don’t really expect that pace to continue through April, but if it does the net reduction in revenue would be ~$40B over the 3 month period. It’s not huge, but it’s not going to help our revenue quest.

In other news, we see the lack of a debt limit reflected in the DTS now, and a roll off of about $68B of “extraordinary measures” conducted since 2/8.

Through 18 days, the cash deficit for February 2014 sits at $116B, and looks to be headed past $200B unless we see a reversal in the pace of refunds. Stay tuned.