Government receipts and expenditures: third quarter of 2007

Survey of Current Business, Dec, 2007 by Debasis Chaudhuri

NET government saving, the difference between current receipts and current expenditures of the Federal Government and state and local governments, was -$236.8 billion in the third quarter of 2007, decreasing $43.4 billion from -$193.4 billion in the second quarter, according to the "preliminary" estimates. (1)

Net Federal Government saving was -$229.2 billion in the third quarter, decreasing $22.4 billion from -$206.8 billion in the second quarter (see page 12). Current receipts decelerated, and current expenditures accelerated.

Net state and local government saving was -$7.7 billion in the third quarter, decreasing $21.1 billion from $13.4 billion in the second quarter (see page 13). Current receipts decelerated, and current expenditures accelerated. Net borrowing was $431.8 billion in the third quarter, increasing $58.2 billion from $373.6 billion in the second quarter. Federal Government net borrowing was $302.6 billion in the third quarter, increasing $37.5 billion from $265.1 billion in the second quarter. State and local government net borrowing was $129.2 billion in the third quarter, increasing $20.7 billion from $108.5 billion in the second quarter.

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Personal current taxes accelerated, reflecting an acceleration in withheld income taxes.

Taxes on production and imports accelerated, reflecting upturns in tobacco and gasoline excise taxes.

Taxes on corporate income turned down, reflecting a downturn in corporate profits.

Contributions for government social insurance accelerated, reflecting an acceleration in contributions for social security (old-age, survivors, disability, and health insurance trust funds).

National defense consumption expenditures decelerated, reflecting a deceleration in spending for services.

Government social benefits to persons decelerated, reflecting decelerations in benefits for social security, Medicare, veterans' benefits and a downturn in food stamps. Benefits for Medicare prescription drugs accelerated.

Interest payments turned down because of a downturn in interest paid on the public debt.

Subsidies turned down, reflecting a downturn in Federal Emergency Management Agency disaster payments.

Capital transfer receipts turned down, reflecting a downturn in estate and gift taxes.

Personal current taxes turned down, primarily reflecting a downturn in state personal income taxes.

Taxes on corporate income turned down, reflecting a downturn in corporate profits.

Consumption expenditures decelerated, reflecting a slowdown in spending for nondurable goods.

Government social benefits turned up, reflecting an upturn in benefit payments for Medicaid.

Gross government investment decelerated, reflecting a deceleration in investment for structures.

Federal Government Estimates

Estimates of Federal Government current receipts, current expenditures, and net Federal Government saving are based on data from the Federal budget, from the Monthly Treasury Statement and other reports from the Department of the Treasury, and from other Federal Government agencies. Total receipts, total expenditures, and net lending or net borrowing, which are alternative measures of the Federal fiscal position, are based on these same sources.

Quarterly and annual estimates are published monthly in NIPA table 3.2. Detailed annual estimates of these transactions by component are published annually in NIPA tables 3.4-3.8, 3.12, and 3.13. Detailed quarterly estimates are available in underlying NIPA tables at <www.bea.gov/bea/ dn/nipaweb/nipa_underlying/Index.asp>.

Each year, BEA prepares an article that compares NIPA estimates and the Federal budget) For a historical time series of this comparison, see NIPA table 3.18B.

(1.) See Mary L. Roy and Andrew E Cairns, "Federal Budget Estimates for Fiscal Year 2008" SURVEY OF CURRENT BUSINESS 87 (March 2007): 10-21.

Estimates of State and Local Government Receipts and Expenditures

The estimates of state and local government current receipts and expenditures and total receipts and expenditures are mainly based on compilations of data for state and local government finances. The Census Bureau produces the primary source data: The quinquennial census of governments in years that end in a 2 or a 7 and the Government Finances series of surveys for the other years. In addition, other sources of Census Bureau data are from the Quarterly Summary of State and Local Government Tax Revenue and the monthly Value of Construction Put in Place. Data sources from the Bureau of Labor Statistics include the Quarterly Census of Employment and Wages and the Employment Cost Index.

Quarterly and annual estimates are available monthly in NIPA table 3.3. Detailed annual estimates of state and local government transactions by component are available annually in NIPA tables 3.4-3.8, 3.12, and 3.13. Detailed quarterly estimates are available in underlying NIPA tables at <www.bea.gov/bea/dn/nipaweb/nipa_underlying/ Index.asp>. For a historical time series of reconciliations of the NIPA estimates with the Census Bureau data from Government Finances, see NIPA table 3.19.

BEA also prepares annual estimates of receipts and expenditures of state governments and of local governments. (1) These estimates are available annually in NIPA table 3.20 (state government receipts and expenditures) and in NIPA table 3.21 (local government receipts and expenditures); see "Newly Available NIPA Tables" in the October 2006 SURWY.