February is one month most of us could do without. The weather is cold and prone to storms, there are no festive holidays (Groundhog Day doesn’t count), and the promise of Spring seems far away. Those of us who can recall the “Thirty days hath September” rhyme from our youth remember that part about February seemed tacked on and awkward. The Romans began their year on March 1, and February was where the adjustments to make the calendar match the solar cycle got dumped. All in all, a month we are happy to see the end of.
When it comes to the federal budget, however, February is not an unpleasant sojourn but a full-blown horror. With no scheduled estimated tax payments coming in and a flood of refunds going out, February only nets about 40% of the average month’s income. At less than $100 billion, the net revenue is less than a third of that required to match the average on-budget outlay of $340 billion.
This year the increase in outstanding Federal debt during February was even more remarkable than usual, coming in at $362 billion. Of course, we should note that $175 billion of that amount was incurred on February 9, when the debt ceiling extension allowed the Treasury to make good on the payments it had deferred. On the other hand, the Treasury’s cash on hand fell by $77 billion during the month. Taking all that into account, the federal government ran an operating cash-flow deficit of roughly $10 billion per day in February without anyone thinking much about it.
A few years ago we penned a commentary which lightheartedly suggested that the federal budget deficit would look a whole lot better if only we could get rid of February. While this modest proposal may have been efficacious at the time, this is no longer the case. As you can see from the chart above, the eleven months outside of February average net revenues of about $275 billion. Federal outlays, however, are budgeted at $340 billion per month, meaning the deficit in the other eleven months adds up to about $700 billion. We have now reached the point where even abolishing February won’t do much to balance federal spending and revenues.
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