Federal Budget

What is Federal Budget?

The Federal Budget is the Monthly Treasury Statement of Receipts and Outlays of the United States Government. It is a monthly accounting tally, not a survey. It is prepared by the Bureau of the Fiscal Service of the Treasury Department after approval by the Fiscal Assistant Secretary of the Treasury.

It forms a three report group with the Daily Treasury Statement and the Combined Statement and conforms to the national Budget. It rests on a full administrative census with no sample and central flow from federal entities and disbursing officers and Federal Reserve Banks.

It covers federal activity plus off budget funds counted in totals as Social Security trust funds and Postal Service cash flow.

It does not cover state or local finance and is no forecast. Monthly figures are not seasonally adjusted and one month never shows the fiscal year stance. The publisher states no market rule, so judge the year to date total.

When is it released and what happens each release?

Each issue covers one accounting month with a monthly column and a fiscal year to date column. Each issue is normally released on workday 8 after the reporting month after approval at 2:00.

Dates are subject to change and the final issue waits for year end requirements with full results. Tallies face two consistency checks for payments and collections with corrections when actuals arrive.

Each issue prints a Highlight box with figures and tables plus Explanatory Notes. Tables show receipts by source and outlays by agency and function with financing means. Each issue also prints a prior year column and a Budget estimate column. The final issue adds a Joint Statement.

What moves Federal Budget?

Receipts rise with payrolls and outlays follow benefit rules.

• Individual income taxes: household earnings collections and the largest receipt source.
• Corporation income taxes: business profits receipts sensitive to cycles.
• Employment and general retirement taxes: payroll contributions for Social Security and Medicare and railroad retirement.
• Excise taxes and customs duties plus estate and gift taxes: fuel and airline and alcohol and tobacco levies with tariffs and wealth transfers.
• Miscellaneous receipts with unemployment insurance and other retirement: mainly Federal Reserve earnings deposits with jobless and civil service contributions.
• Outlays by agency and function: department spending gross less offsetting collections with central deductions for employer payments and trust interest and royalties.

Credit programmes record full multiyear costs up front on a present value basis with no cash outflow in that month. Payment dates can shift between adjacent months when the normal date falls on a non business day. One month can look nothing like the year, so never annualise one month and read the year to date with the final issue.

How is Federal Budget calculated?

The statement uses a modified cash basis where interest uses accrual and credit cost stays up front.

1. Receipts: Add collections during the month then deduct refunds. R equals gross receipts minus refunds. The example uses 527620 million in receipts.

1. Outlays: Add checks issued with transfers and cash payments then deduct offsetting collections. Interest uses accrual while credit cost stays up front. The example uses 463357 million in outlays.

1. Balance: Subtract outlays from receipts so B equals R minus O. Plus means surplus and minus means deficit. The example gives 527620 minus 463357 equals 64263 and is a surplus of 64263 million.

1. Financing: Financing equals the opposite of the balance so F equals negative B. A surplus month shows negative financing. The example shows financing of 64263 million negative from 143708 million borrowing with 176213 million cash and 31758 million other means.

1. Split: Split each line into on budget and off budget with total as both added. Values are in millions with rounding. The example shows 81061 million on budget and 16798 million off budget summing to 64263 million.

Do not treat one month as cash spending and do not annualise it. Interest uses accrual and credit costs hit up front. Totals mix on budget with off budget, so read the year to date and the final issue.