Daily Deficit

Here we go…the last DTS of the month, complete with a $10B surprise….an additional $10B of revenue from our good buddies at “GSE Dividends”. This is likely some of that missing revenue from earlier in the month…I guess they finally got around to cashing the check.  The 3/29/2013 Daily Surplus came in at $12.5B, and the month ended up at $94B, a full $45B improvement over last year’s $ $139B deficit.

At first glance, revenues look flat, but the truth is, Corporate tax deposits were up 15% YOY and individual TD were up 12% for a combined increase of about $30B. This is offset by a decrease in TARP($15B), an increase in tax refunds ($10B) and about $5B decrease in other misc. revenues. This is good news….I have been using about 11% in my forecasts, so at least for the month, we are over performing. I won’t get excited yet…I really want to get beyond tax season and see how May-July looks…if we are still seeing 10%+ out there, it’s going to be hard to deny that we have some bona fide YOY revenue growth. Duplicating that in 2014 is an entirely different story, we’ll find out in time though.

Cost really jumps out at you with a $47B improvement, but about $30B of that appears to be just timing….costs that hit in late March in 2012 won’t hit until early April in 2013. Of course, that should give April 2013 a $30B headwind if it is going to improve upon last year’s $58B surplus, but with tax deposits  showing strong growth, a strong showing on tax day (4/15) could make it close.  That leaves a bona fide decrease in outlays of about $17B, which is quite impressive, maybe too impressive. Payments to defense vendors was down $6.3B from $33.8B to $27.5B. That doesn’t really jive with the sequester numbers I’ve been seeing, which was’t supposed to really hit until April or so…maybe they are just “slow paying” who knows…we’ll keep an eye on it. “Other also makes up a big chunk, and among the remaining categories, there is quite a bit of downward movement. It is worth noting that Social Security payments are up 9% YOY, posting a $5B increase from $55B to $60B in 3/2013. That $5B annualized means that just to stay even…we need $60B of revenue increases or spending cuts…every single year just to cover increases in Social Security.

So for a first glance, this is a better report than I expected, but it doesn’t warrant celebrations or a “Mission Accomplished” banner by any stretch. Tax deposits are definitely trending up, and outlays are more or less flat, maybe even down a smidge. If we keep this up, we may come in under the $1T deficit mark this year…maybe.