The US Daily Surplus for 2/1/2013 was $3.4B, bringing the monthly deficit down to $54B after last Friday’s $58B blowout. The charts look a little screwey today, but it is early and there are too many timing issues to count battling it out. Perhaps most interesting is that as of yesterday, we have no debt limit… at least until May 19th. I expected a flood of debt to flow back onto the balance sheet…around $100B or so, but debt only increased $41B. I’ll chalk it up to timing for now…we shall see.
In other news, the CBO released an updated 10 year budget outlook today projecting an $845B deficit for fiscal 2013. I have to assume they have much better information and more time than I do. It’s not a crazy number, but it does seem a bit optimistic. With 4 months in the books, we are averaging a $4B per month improvement over last fiscal year’s $1.092T cash deficit. At this pace, they won’t make it, but admittedly, the tax increases that kicked in last month should help. I believe that for the calendar year, I projected $1T, +/- $100B. Just for fun, let’s see who is better at this…a bureaucracy with a huge staff, or a guy with a ruler. I haven’t done a formal fiscal year forecast, but I don’t mind throwing a dart. There are 8 months left, so lets just assume that revenues increase $20B per month and outlays increase $10B over last year. That would give us a $10B pickup per month and land us right under $1T. For what it’s worth, I’m rooting for the CBO.
The US Daily Surplus for 1/28/2013 was $5.5B on strong revenues…pretty typical for a Monday. Cash in hand was $75B, and the debt limit is still unchanged. The House has already passed the bill, but the Senate still needs to approve it and Obama needs to sign it. This is expected tomorrow, or at least by week end. I don’t know how long it will take Treasury to unwind their “extrordinary” measures, but I will be keeping an eye in the change in debt once they do. Expect a spike in the $100B range. The last time there was a debt limit battle, debt outstanding spiked $238B the next day as Treasury brought their off balance sheet shenanigans back into the fold. I don’t expect that much…the battle of 2011 went on for a lot longer than this battle…if we can even call it that.
With 3 business days left, Revenues are up a solid 10% over last year and likely to increase a bit more. I expected a ballpark of $20B increase due to tax hikes and the trend. Add some delay to refunds (which we count as “negative” revenues) and possibly some filers pulling some income into 2012 for the lower tax rates, and there is nothing all that surprising about this “improvement”…if we dare call getting taxed more an improvement.
Cost is currently fairly even, but will likely end up $10-15B over last year. We’ll have the finals Friday, but $25B looks like a pretty safe bet for the monthly deficit. I said early on that deficit wise, January was going to be a snoozer, but never fear…February is almost here. Feb 2012 posted a $249B deficit…about a quarter of the yearly total packed into 29 exciting days!!. I have no reason to expect anything different from Feb 2013.
Looks like the house has officially approved the debt limit increase, but instead of putting an actual number on it, they gave treasury whatever it takes to get them through May 18. By my math, that’s somewhere between $400 and $500B. However….I think it would be hilarious if treasury just issued like $6T of debt on May 17….pulling in enough cash to get Obama through his second term without needing to think about this again. There are probably some limitations to prevent that, but who knows. I suspect this is all just a slow retreat by the Republicans, who realized a bit too late that they were walking into a minefield with the debt limit and that Obama was ready to call their bluff. They are hoping that between now and May, something else will have caught the publics eye so they can surrender privately. Of course, they did get a couple headlines with their No Budget/No Pay idea, which Democrats rightly called a “gimmick” and a “joke”. But this is politics….and that’s what we vote for, so no surprises really. In the long run, nothing has changed…the US will default on both on and off balance sheet obligations at some point in the future. When it does…it’s not going to be pretty.
The US Daily Deficit for 1/18/2013 was $0.3B. Usually, I do the month to date through the current day, but since we know that 1/19-1/21 were zero, I’m just going to say the January deficit through 21 days was $40B vs $43B in 2012…so virtually the same. Revenue is flat, outlays are flat..deficit is flat. There are 8 business days left…still plenty of time for 2013 to make a run, but through 3 weeks, there is no evidence of increased revenues due to the expiration of the payroll tax cut and the tak hike on high earners. I would expect some delay…especially on the income tax hike…but honestly, those hikes were so tiny, perhaps $15B per month…they could easily get lost in the noise, especially in what promises to be a chaotic 1Q.
