US DAILY DEFICIT

The US Daily Cash Surplus for 4/26/2013 was $4.6B. Revenues continue to outpace April 2012 by a healthy 23% pace, but are following a similar downward slope the further we get from 4/15. The 4/2013 surplus through 26 days stands at $102B with 2 business days remaining. This is likely to continue growing with strong Monday revenues today, $110B seems possible, but end of month is often tricky to forecast…sometimes we see large outlays flow through…I am expecting $8B or so of interest payments 4/30…and I never know when Medicare payments are going out…so a spike there could offset an otherwise strong finish.

The US Daily Cash Surplus for 4/25/2013 was $4.7B…pushing us back into surplus after yesterday’s brief return to normalcy. The category “Individual Income and Employment Taxes Not Withheld” continues to lead the charge. This category represents taxes not withheld directly from a paycheck…for example if you owed taxes and mailed a check on 4/15… Or if you were an investor with a large capital gains.. YOY through 25 days, this category is up from 131B in 4/2012 to $174B in 4/2013. This is good for about 65% of the total $69B revenue gain we’ve seen, with the balance being in Corporate Taxes, Taxes withheld, and other misc. categories. Withheld taxes are up about 8.4%…consistent with the rest of the year.

With 3 days left, the main thing I am interested in is the YOY interest payments…last year they came in at $15.3B for the month. Debt has increased about $1T in the last year, but effective interest rates have inched down a bit as well. I’m not expecting any huge changes, but this is one of the categories I keep a close eye on because if/when treasury loses control of interest rates, it’s pretty much game over because zero% is just about all we can afford to pay anyway. As of the end of March, I had the effective rate at 1.85%. A jump of just 1% would mean an additional $120B per year of deficits….a number that will grow along with our debt once we say goodbye to April.

The US Daily Cash Deficit for 4/24/2013 was $2.7B, breaking a nearly 2 week string of surpluses as the final round of SS payments went out, pushing cost over still strong revenues. At $350B in net cash revenues, we are already ahead of last April’s $330B and well within reach of $400B. This wouldn’t be an all time high…April 2008 would still hold that at $430B of revenue and a $188B surplus. Curiously, 5/2008 went on to post a $154B deficit, nearly wiping out all of the gains from April’s record surplus. Doh!!

With 4 business days remaining, $105B looks like a good deficit estimate…factoring in 1 extra business day and a continuation if strong revenues. As fun as April has been…I still think the real story is going to be told in what happens over the May-June period.  These months will give us our first glance at the new 2013 tax policy, uncorrupted by year end shenanigans by businesses and individuals. 11%YOY Revenue  growth should be the baseline with slightly lower cost.

The US Daily Cash Surplus for 4/23/2013 was $39.3B bringing the April 2013 surplus to $95B with 5 business days to go. After a breather yesterday, the large revenue surge I was expecting but unsure of did come through and it exceeded last year by $12B, so another great day. If we can use last year as a guide…which is far from a sure thing…the April revenue party is now pretty much over. We will likely run a small net surplus over the rest of the month, so hitting $100B seems likely. Hitting $120B…possible, but it seems unlikely.

The US Daily Surplus for 4/22/2013 was $17.3B…an impressive number in it’s own right, but more or less in line with last year’s 4/23/2012 Surplus…. taking a breather from the 20%+ YOY gains we have been witnessing in some categories.

This kind of illustrates the challenge I expect to see in 2014. Without a doubt…as far as tax revenues are concerned…last week was a blowout with many categories exceeding YOY by 30% or so. As impressive as it is….it is extremely difficult to maintain that kind of exponential growth beyond a cycle or two because you have to keep growing an ever expanding base. So while we very well may end April 2013 with 15-20% revenue growth….driven by several factors including a tax hike… seeing that repeat again in 2014 would mean something like an additional $50-$75B over an already impressive April 2013. I’m not holding my breath…

So here we are through 22 days of April 2013 with a $56B surplus. There is still a little uncertainty, but $100B appears to be in reach, but by no means certain.