Government Receipts and Expenditures

Second Quarter of 2018

Prepared by Kenneth Beatty  |  Volume 98, Number 9  |  September 20, 2018

Download PDF

Net government saving, the difference between current receipts and current expenditures in the federal government and state and local governments, was −$1,224.3 billion in the second quarter of 2018, decreasing $24.1 billion from −$1200.2 billion in the first quarter of 2018 (charts 1 and 2 and table 1).

“Net lending or net borrowing (−)” is an alternative measure of the government fiscal position. Net borrowing is the financing requirement of the government sector; it is derived as net government saving plus the consumption of fixed capital and net capital transfers received less gross investment and net purchases of nonproduced assets.

Net borrowing was $1,333.0 billion in the second quarter, increasing $33.3 billion from $1,299.7 billion in the first quarter (charts 3 and 4 and table 1).

Chart 1. Current Receipts and Expenditures: Change From Preceding Quarter

[Click chart to expand]

Chart 2. Net Saving

[Click chart to expand]

Chart 3. Total Receipts and Expenditures: Change From Preceding Quarter

[Click chart to expand]

Chart 4. Net Lending or Net Borrowing

[Click chart to expand]

Table 1. Net Government Saving and Net Lending or Net Borrowing
(Billions of dollars, seasonally adjusted at annual rates)
Line   Level Change from preceding quarter
2018 2017 2017 2018 2018
II III IV I II
1 Current receipts 5,474.4 80.2 −22.6 −88.3 61.3
2 Current expenditures 6,698.7 63.1 110.6 63.5 85.3
             
3 Net government saving −1,224.3 17.1 −133.2 −151.7 −24.1
4 Federal −984.5 1.0 −143.1 −166.3 −14.6
5 State and local −239.8 16.2 9.8 14.5 −9.4
             
6 Net lending or net borrowing (−) −1,333.0 −38.4 920.6 −1,153.4 −33.3
7 Federal −1,036.5 −62.4 925.8 −1,164.0 −16.7
8 State and local −296.5 24.0 −5.2 10.6 −16.6

Net federal government saving was −$984.5 billion in the second quarter, decreasing $14.6 billion from −$969.9 billion in the first quarter (table 2). In the second quarter, current receipts turned up, and current expenditures decelerated.

Federal government net borrowing was $1,036.5 billion in the second quarter, increasing $16.7 billion from $1,019.8 billion in the first quarter. The volatile pattern of net borrowing in recent quarters reflects the impacts of various provisions of the 2017 Tax Cut and Jobs Act (TCJA). For more information, see “How does the 2017 Tax Cuts and Jobs Act affect BEA’s business income statistics?” and “How does the 2017 Tax Cuts and Jobs Act affect BEA’s estimates of personal taxes?”

  • Personal current taxes (line 3) turned up in the second quarter, reflecting an upturn in withheld income taxes. In the first quarter, withheld income taxes were reduced by provisions of the TCJA.
  • Taxes on production and imports (line 4) decelerated in the second quarter. In the first quarter, excise taxes on health insurance providers accelerated, reflecting the reintroduction of annual fees on health insurance companies.
  • Taxes on corporate income (line 5) turned up in the second quarter. In the first quarter, the TCJA reduced the federal domestic corporate income tax rate from 35 percent to 21 percent.
  • Income receipts on assets (line 8) turned down in the second quarter, following the pattern of remittances paid by the regional Federal Reserve Banks.
  • Current transfer receipts (line 9) decelerated in the second quarter. In the first quarter, a legal settlement boosted receipts $2.0 billion ($8.0 billion at an annual rate).
  • Government social benefits to persons (line 17) decelerated in the second quarter. The first-quarter level was boosted by the 2.0 percent cost-of-living adjustment for social security, veterans pensions, and supplemental security income benefits as well an increase in Affordable Care Act health insurance premium subsidies.
  • Grants-in-aid to state and local governments (line 20) turned down, reflecting a downturn in Medicaid grants.
  • Other current transfer payments to the rest of the world (line 21) turned up in the second quarter, reflecting economic support payments to Egypt and Israel.
Table 2. Federal Government Current Receipts and Expenditures
(Billions of dollars, seasonally adjusted at annual rates)
Line   Level Change from preceding quarter
2018 2017 2017 2018 2018
II III IV I II
1 Current receipts 3,469.3 51.5 −56.7 −105.3 41.0
2 Current tax receipts 1,944.9 28.8 −21.7 −149.2 36.1
3 Personal current taxes 1,605.8 19.6 7.4 −49.4 21.9
4 Taxes on production and imports 151.4 1.2 1.7 15.6 1.9
5 Taxes on corporate income 160.5 7.5 −31.6 −115.4 11.5
6 Taxes from the rest of the world 27.2 0.5 0.8 −0.1 0.9
7 Contributions for government social insurance 1,340.8 15.1 11.0 26.0 13.3
8 Income receipts on assets 112.9 −12.6 −20.0 13.3 −9.5
9 Current transfer receipts 80.0 21.6 −23.6 7.5 2.9
10 Current surplus of government enterprises −9.3 −1.3 −2.4 −3.0 −1.8
             
11 Current expenditures 4,453.9 50.6 86.3 61.0 55.7
12 Consumption expenditures 1,027.7 0.6 13.2 14.8 15.0
13 National defense 618.3 −2.9 6.2 8.1 11.7
14 Nondefense 409.4 3.5 7.1 6.5 3.4
15 Current transfer payments 2,828.9 34.3 17.9 45.5 28.8
16 Government social benefits 2,188.7 15.6 14.5 36.8 16.5
17 To persons 2,166.0 15.4 13.7 36.5 16.7
18 To the rest of the world 22.8 0.1 0.9 0.3 −0.1
19 Other current transfer payments 640.2 18.7 3.3 8.8 12.3
20 Grants-in-aid to state and local governments 576.6 20.3 −6.1 18.0 −2.6
21 To the rest of the world 63.7 −1.5 9.3 −9.2 15.0
22 Interest payments 537.8 11.0 54.1 4.4 12.3
23 Subsidies 59.4 4.7 1.1 −3.6 −0.6
             
24 Net federal government saving −984.5 1.0 −143.1 −166.3 −14.6
25 Social insurance funds −349.5 −0.5 −2.5 −7.6 −5.3
26 Other −635.0 1.4 −140.5 −158.6 −9.4
             
Addenda:
27 Total receipts 3,492.3 52.0 944.5 −1,105.0 39.2
28 Current receipts 3,469.3 51.5 −56.7 −105.3 41.0
29 Capital transfer receipts 23.0 0.4 1,001.3 −999.7 −1.8
30 Total expenditures 4,528.8 114.4 18.7 59.0 55.9
31 Current expenditures 4,453.9 50.6 86.3 61.0 55.7
32 Gross government investment 285.2 −0.8 3.5 −0.4 3.0
33 Capital transfer payments 72.3 73.1 −76.2 −0.1 −0.6
34 Net purchases of nonproduced assets −0.7 −6.8 6.7 0.1 −0.2
35 Less: Consumption of fixed capital 281.9 1.8 1.5 1.6 2.0
36 Net lending or net borrowing (−) −1,036.5 −62.4 925.8 −1,164.0 −16.7

Net state and local government saving was −$239.8 billion in the second quarter, decreasing $9.4 billion from −$230.4 billion in the first quarter. In the second quarter, current receipts decelerated and current expenditures accelerated (table 3).

State and local government net borrowing was $296.5 billion, increasing $16.6 billion from $279.9 billion in the first quarter.

  • Personal current taxes (line 3) turned down in the second quarter because of a downturn in personal income taxes.
  • Taxes on corporate income (line 5) turned up in the second quarter.
  • Federal grants-in-aid (line 9) turned down in the second quarter, reflecting a downturn in Medicaid grants.
  • Consumption expenditures (line 13) accelerated in the second quarter, reflecting an acceleration in compensation of general government employees.
  • Government social benefits (line 14) accelerated in the second quarter, reflecting an acceleration in Medicaid benefits.
  • Gross government investment (line 25) accelerated in the second quarter because of an acceleration in structures investment.
Table 3. State and Local Government Current Receipts and Expenditures
(Billions of dollars, seasonally adjusted at annual rates)
Line   Level Change from preceding quarter
2018 2017 2017 2018 2018
II III IV I II
1 Current receipts 2,581.6 49.0 28.0 35.0 17.6
2 Current tax receipts 1,761.6 26.9 31.8 14.3 17.5
3 Personal current taxes 436.8 14.7 15.0 8.5 −9.3
4 Taxes on production and imports 1,261.7 13.6 14.6 12.3 13.3
5 Taxes on corporate income 63.1 −1.3 2.1 −6.3 13.4
6 Contributions for government social insurance 21.6 0.2 0.4 0.3 0.3
7 Income receipts on assets 87.5 0.5 0.6 −0.2 0.9
8 Current transfer receipts 714.5 21.8 −4.3 20.1 −0.7
9 Federal grants-in-aid 576.6 20.3 −6.1 18.0 −2.6
10 Other 138.0 1.5 1.7 2.2 2.0
11 Current surplus of government enterprises −3.6 −0.5 −0.4 0.3 −0.3
             
12 Current expenditures 2,821.4 32.8 18.2 20.5 27.0
13 Consumption expenditures 1,803.5 13.9 20.5 16.4 19.1
14 Government social benefits 737.3 18.4 −2.6 7.8 10.8
15 Interest payments 280.1 0.5 0.4 −3.7 −2.9
16 Subsidies 0.6 0.0 0.0 0.0 0.0
             
17 Net state and local government saving −239.8 16.2 9.8 14.5 −9.4
18 Social insurance funds 4.4 0.1 0.1 0.1 0.1
19 Other −244.3 16.1 9.7 14.4 −9.6
             
Addenda:
20 Total receipts 2,650.9 57.7 15.5 35.2 17.3
21 Current receipts 2,581.6 49.0 28.0 35.0 17.6
22 Capital transfer receipts 69.3 8.9 −12.5 0.1 −0.3
23 Total expenditures 2,947.4 33.7 20.7 24.7 33.8
24 Current expenditures 2,821.4 32.8 18.2 20.5 27.0
25 Gross government investment 389.0 −1.3 9.4 7.1 11.4
26 Capital transfer payments ...... ...... ...... ...... ......
27 Net purchases of nonproduced assets 14.3 0.2 0.2 0.2 0.3
28 Less: Consumption of fixed capital 277.4 2.9 2.1 3.3 4.9
29 Net lending or net borrowing (−) −296.5 24.0 −5.2 10.6 −16.6