December 2019 Articles

Government Receipts and Expenditures

Third Quarter of 2019

By Kelly Ramey | Volume 99, Number 12 | December 19, 2019

Net government saving, the difference between current receipts and current expenditures in the federal government and state and local governments, was −$1,438.5 billion in the third quarter of 2019, decreasing $65.5 billion from −$1,373.0 billion in the second quarter of 2019 (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, and 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 $1,582.1 billion in the third quarter, increasing $64.8 billion from $1,517.3 billion in the second quarter (charts 3 and 4 and table 1).

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

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

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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
		2019	2018	2019	2019	2019
		III	IV	I	II	III
1	Current receipts	5,754.6	−13.1	87.3	86.1	4.6
2	Current expenditures	7,193.1	79.9	97.5	124.5	70.1

3	Net government saving	−1,438.5	−93.0	−10.2	−38.3	−65.5
4	Federal	−1,215.1	−86.3	−55.3	−65.1	−27.1
5	State and local	−223.4	−6.7	45.1	26.7	−38.4

6	Net lending or net borrowing (−)	−1,582.1	−87.6	−21.1	−58.6	−64.8
7	Federal	−1,287.9	−86.4	−55.9	−70.7	−33.8
8	State and local	−294.2	−1.2	34.8	12.1	−31.0

Net federal government saving was −$1,215.1 billion in the third quarter, decreasing $27.1 billion from −$1,188.0 billion in the second quarter (table 2). In the third quarter, both current receipts and current expenditures decelerated.

Federal government net borrowing was $1,287.9 billion in the third quarter, increasing $33.8 billion from $1,254.1 billion in the second quarter.

Personal current taxes (line 3) accelerated in the third quarter, reflecting the pattern of wages.
Taxes on production and imports (line 4) turned up in the third quarter. Customs duties turned up in the third quarter, reflecting an increase in tariff rates on many imported goods.
Taxes on corporate income (line 5) turned down in the third quarter, reflecting a deceleration in corporate profits.
Contributions for government social insurance (line 7) accelerated in the third quarter, reflecting the pattern of wages.
Income receipts on assets (line 8) turned down in the third quarter, reflecting a downturn in dividends from the regional Federal Reserve Banks and a deceleration in dividends received from Fannie Mae and Freddie Mac. The Treasury Department modified the terms of Fannie Mae and Freddie Mac conservatorship agreements to allow for the accumulations and holdings of larger capital reserves.
Current transfer receipts (line 9) turned up in the third quarter. Third-quarter receipts were boosted by a $5.0 billion ($20.0 billion at an annual rate) settlement with Facebook for data privacy violations.
Consumption expenditures (line 12) decelerated in the third quarter, reflecting a deceleration in national defense expenditures.
Grants-in-aid to state and local governments (line 20) decelerated, reflecting a deceleration in Medicaid grants.
Other current transfer payments to the rest of the world (line 21) turned up in the third quarter.
Interest payments (line 22) turned down in the third quarter, reflecting a downturn in interest paid on Treasury Inflation-Protected Securities.
Subsidies (line 23) turned up in the third quarter, reflecting the pattern of agricultural subsidies from the U.S. Department of Agriculture Market Facilitation Program, which provides relief from tariffs on certain farm products.

Table 2. Federal Government Current Receipts and Expenditures
[Billions of dollars, seasonally adjusted at annual rates]
Line		Level	Change from preceding quarter
		2019	2018	2019	2019	2019
		III	IV	I	II	III
1	Current receipts	3,619.1	−16.4	47.7	29.6	12.8
2	Current tax receipts	2,033.5	16.5	30.7	9.0	5.9
3	Personal current taxes	1,705.9	5.6	54.1	3.3	14.6
4	Taxes on production and imports	171.6	20.6	−14.2	−4.4	9.9
5	Taxes on corporate income	127.2	−11.3	−8.3	9.4	−18.8
6	Taxes from the rest of the world	28.8	1.7	−0.9	0.6	0.2
7	Contributions for government social insurance	1,409.6	6.3	39.0	8.8	10.4
8	Income receipts on assets	97.6	0.4	−18.7	13.4	−22.1
9	Current transfer receipts	86.3	−37.2	−1.8	−0.3	18.1
10	Current surplus of government enterprises	−8.1	−2.4	−1.6	−1.1	0.2

11	Current expenditures	4,834.2	69.8	103.0	94.6	40.0
12	Consumption expenditures	1,121.5	5.0	18.5	18.9	11.0
13	National defense	680.2	6.9	14.8	10.3	3.3
14	Nondefense	441.3	−1.9	3.7	8.6	7.7
15	Current transfer payments	3,045.6	30.0	111.4	24.7	28.2
16	Government social benefits	2,377.2	23.7	97.3	23.5	23.3
17	To persons	2,353.1	23.8	96.5	23.1	23.0
18	To the rest of the world	24.2	0.0	0.7	0.3	0.5
19	Other current transfer payments	668.4	6.3	14.1	1.2	4.9
20	Grants-in-aid to state and local governments	614.3	−1.1	15.9	13.6	0.2
21	To the rest of the world	54.2	7.4	−1.8	−12.4	4.8
22	Interest payments	584.9	11.9	−18.0	61.7	−20.2
23	Subsidies	82.1	22.9	−8.7	−10.7	20.8

24	Net federal government saving	−1,215.1	−86.3	−55.3	−65.1	−27.1
25	Social insurance funds	−437.1	−21.3	−22.0	−17.6	−13.6
26	Other	−778.0	−64.9	−33.3	−47.4	−13.6

	Addenda:
27	Total receipts	3,637.4	−16.6	46.8	27.8	11.5
28	Current receipts	3,619.1	−16.4	47.7	29.6	12.8
29	Capital transfer receipts	18.3	−0.2	−0.9	−1.7	−1.4
30	Total expenditures	4,925.3	69.8	102.7	98.6	45.2
31	Current expenditures	4,834.2	69.8	103.0	94.6	40.0
32	Gross government investment	310.7	8.1	4.4	1.6	6.0
33	Capital transfer payments	77.7	−4.7	2.6	−1.5	1.7
34	Net purchases of nonproduced assets	−2.2	−2.1	−4.4	4.5	0.1
35	Less: Consumption of fixed capital	295.0	1.4	2.9	0.7	2.4
36	Net lending or net borrowing (−)	−1,287.9	−86.4	−55.9	−70.7	−33.8

Source Data and Other Information About 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 available monthly in National Income and Product Accounts (NIPA) table 3.2. Detailed annual estimates of these transactions by component are available in NIPA tables 3.4, 3.5, 3.6, 3.7, 3.8, 3.12, and 3.13, and quarterly estimates for selected series are available in NIPA underlying detail tables.

Each year, BEA translates the information in the federal budget into a NIPA framework.¹ For a historical time series of reconciliations of the NIPA estimates with the federal budget, see NIPA table 3.18b.

See Mark S. Ludwick and Brendan I. Brankin, “NIPA Translation of the Fiscal Year 2020 Federal Budget,” Survey of Current Business 99 (May 2019).

Net state and local government saving was −$223.4 billion in the third quarter, decreasing $38.4 billion from −$185.0 billion in the first quarter. In the third quarter, current receipts turned down and current expenditures decelerated (table 3).

State and local government net borrowing was $294.2 billion in the third quarter, increasing $31.0 billion from $263.2 billion in the second quarter.

Personal current taxes (line 3) turned down in the third quarter, reflecting a downturn in personal income taxes.
Taxes on corporate income (line 5) turned down in the third quarter, reflecting a deceleration in corporate profits.
Federal grants-in-aid (line 9) decelerated in the third quarter, reflecting a deceleration in Medicaid grants.
Other current transfer receipts (line 10) turned down in the third quarter. Second-quarter transfer receipts were boosted $0.7 billion ($2.9 billion at an annual rate) from a settlement with UniCredit Group Banks in foreign countries to the state of New York for concealing transactions that violated sanctions.
Consumption expenditures (line 13) decelerated in the third quarter, reflecting a downturn in spending on nondurable goods, specifically petroleum.
Government social benefits (line 14) decelerated in the third quarter, reflecting a deceleration in Medicaid benefits.

Table 3. State and Local Government Current Receipts and Expenditures
[Billions of dollars, seasonally adjusted at annual rates]
Line		Level	Change from preceding quarter
		2019	2018	2019	2019	2019
		III	IV	I	II	III
1	Current receipts	2,749.8	2.3	55.5	70.1	−8.0
2	Current tax receipts	1,885.6	−3.5	42.1	53.5	−7.4
3	Personal current taxes	484.7	−14.6	25.3	39.9	−24.1
4	Taxes on production and imports	1,334.6	12.2	11.4	11.4	17.0
5	Taxes on corporate income	66.3	−1.1	5.3	2.3	−0.3
6	Contributions for government social insurance	22.8	0.1	0.0	0.1	0.2
7	Income receipts on assets	94.0	0.9	1.0	0.3	0.2
8	Current transfer receipts	752.0	5.1	12.3	16.6	−1.0
9	Federal grants-in-aid	614.3	−1.1	15.9	13.6	0.2
10	Other	137.7	6.2	−3.5	2.9	−1.2
11	Current surplus of government enterprises	−4.6	−0.3	0.0	−0.3	0.0

12	Current expenditures	2,973.2	9.0	10.3	43.5	30.3
13	Consumption expenditures	1,913.1	15.7	0.1	21.5	15.2
14	Government social benefits	789.7	−4.2	13.2	22.3	15.7
15	Interest payments	269.8	−2.5	−3.0	−0.4	−0.5
16	Subsidies	0.6	0.0	0.0	0.0	0.0

17	Net state and local government saving	−223.4	−6.7	45.1	26.7	−38.4
18	Social insurance funds	5.5	0.0	−0.1	−0.1	0.1
19	Other	−228.9	−6.6	45.2	26.8	−38.5

	Addenda:
20	Total receipts	2,825.9	−1.9	58.2	68.4	−6.3
21	Current receipts	2,749.8	2.3	55.5	70.1	−8.0
22	Capital transfer receipts	76.2	−4.3	2.8	−1.7	1.8
23	Total expenditures	3,120.1	−0.8	23.3	56.4	24.7
24	Current expenditures	2,973.2	9.0	10.3	43.5	30.3
25	Gross government investment	426.5	−6.6	15.3	17.2	−2.7
26	Capital transfer payments
27	Net purchases of nonproduced assets	15.2	0.3	0.4	0.1	−0.2
28	Less: Consumption of fixed capital	294.8	3.4	2.8	4.3	2.8
29	Net lending or net borrowing (−)	−294.2	−1.2	34.8	12.1	−31.0

Source Data and Other Information About 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 census of governments that is conducted 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 in NIPA tables 3.4, 3.5, 3.6, 3.7, 3.8, 3.12, and 3.13, and quarterly estimates for selected series are available in NIPA underlying detail tables. For a historical time series of reconciliations of the NIPA estimates with the Census Bureau data from Government Finances, see NIPA table 3.19.

Annual estimates of receipts and expenditures of state governments and of local governments are available in NIPA table 3.20 (state government receipts and expenditures) and in NIPA table 3.21 (local government receipts and expenditures).¹

See Bruce E. Baker, “Receipts and Expenditures of State Governments and of Local Governments,” Survey of Current Business 85 (October 2005): 5–10.