The US Daily Cash Deficit for Friday 2/27/2015 was $39.4B bringing the February full month cash deficit to $211B, $1B over my initial estimate of a $210B deficit for the month. So hooray for wild ass guesses….even though my last guess was between $200B and $210B.

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February went off mostly as expected with a huge deficit thanks primarily to about $119B of individual tax refunds. Revenue ends up +$19B YOY, not too shabby, while outlays were up$4B. Put it all together and we had another OK month. For the year, revenue is up 3.7%, good for the slowest start since 2010 when revenues through February were down 2.7%. Outlays are flat for the year, which continues to surprise me, but that's a good thing. SS/Medicaid/Medicare continue to increase….their combined YOY increase is 9%, good for $13B per month in extra spending, but this has been offset by interest timing, lower payments to defense vendors, and unemployment payments. Also helping has been what I suspect is the cash benefit of issuing debt at a premium. The YOY shift has gone from 5B of “expense” last year through 2 months as debt was issued at a discount, to an $8B benefit so far this year thanks to apparent premiums. It's not material in the big picture, but if it continues I'll probably need to make some adjustments.

So far, 2014 looks to be slow but steady revenue growth with more or less flat outlays. If this continues, we will continue to make progress in the deficit reduction arena, but it will slow to a crawl compared to prior years. Still, the year is young, and March/April have the potential for big surprises either way. After the April dust settles, we should have a much better idea where the full year is headed. Until then…stay tuned for March, which should have steady stream of tax refunds and some solid mid month corporate taxes…