The US Daily Cash Deficit for 2/28/2013 was $8.6B bringing the February 2013 deficit to $229B, a $20B improvement over February 2012. This was fairly close to my guestimate of $225B, so nothing really unexpected here, but I will note that total revenues unadjusted for refunds were flat after a 9% year on year (YOY) increase in January. There were increases in taxes withheld of about 5%, but this was offset by reductions elsewhere. Now part of this is likely due to the extra business day last year, which is also likely the cause in a slight reduction in YOY outlays, but it is still a surprise to me because I expected the tax increases to more than make up for the lost business day, but that clearly was not the case. Of the $15B revenue increase we see in the charts below, every cent of it can be attributed to a delay in refunds, which were down $15B from $129B last year to $114B in 2013. Now, it is entirely possible that tax refunds will just be less in 2013, that would not be unprecedented. But if not, we should see these in March and April. The cumulative difference through 2 months is about $23B, so we will continue to keep an eye on that.
I will do a larger recap over the weekend, but wanted to get this out today. Looking forward to March, last year we ran a $139B deficit, which sounds like a pretty good estimate to me. That assumes this month’s flat revenues were a fluke and that we will see revenue gains in the $15B range…offset by about $15B increase in tax refunds as the IRS catches up with the delays we have seen to date. Not expecting any sequester effect….is that still happening??…but I will keep an eye out for it.
