Government Receipts and Expenditures
Second Quarter of 2023
Net government saving, the difference between current receipts and current expenditures in the federal government and state and local governments, was −$1,845.4 billion in the second quarter of 2023, decreasing $108.3 billion from −$1,737.1 billion in the first quarter of 2023 (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 $2,086.6 billion in the second quarter, increasing $145.8 billion from $1,940.8 billion in the first quarter (charts 3 and 4 and table 1).
| Line | Component | Level | Change from preceding quarter | |||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | ||||
| Q2 | Q3 | Q4 | Q1 | Q2 | ||
| 1 | Current receipts | 7,295.9 | −57.6 | −26.2 | −312.4 | −50.9 |
| 2 | Current expenditures | 9,141.3 | 128.1 | 213.1 | 133.1 | 57.4 |
| 3 | Net government saving | −1,845.4 | −185.8 | −239.3 | −445.5 | −108.3 |
| 4 | Federal | −1,660.7 | −112.2 | −168.5 | −432.5 | 13.0 |
| 5 | State and local | −184.7 | −73.5 | −70.8 | −13.0 | −121.3 |
| 6 | Net lending or net borrowing (−) | −2,086.6 | −268.5 | −266.9 | −518.0 | −145.8 |
| 7 | Federal | −1,832.3 | 204.6 | −175.1 | −437.2 | −9.8 |
| 8 | State and local | −254.3 | −473.0 | −91.9 | −80.8 | −136.0 |
Net federal government saving was −$1,660.7 billion in the second quarter, increasing $13.0 billion from −$1,673.7 billion in the first quarter (table 2). In the second quarter, current receipts turned up and current expenditures decelerated relative to the first quarter.
Federal government net borrowing was $1,832.3 billion in the second quarter, increasing $9.8 billion from $1,822.5 billion in the first quarter.
- Personal current taxes (line 3) decreased less in the second quarter, decreasing $3.1 billion after decreasing $309.1 billion in the first quarter, reflecting a smaller decrease in nonwithheld taxes. The smaller decrease in nonwithheld taxes reflected a smaller decrease in declaration and settlements. Annual changes for final settlements and refunds, which are primarily based on tax liabilities for previous years, are recorded in the first quarter of the year.
- Contributions for government social insurance (line 7) decelerated in the second quarter, increasing $22.4 billion after increasing $41.8 billion in the first quarter, reflecting the pattern of wages. Contributions for FICA (Federal Insurance Contributions Act) by employers, employees, and the self-employed as well as contributions for Supplementary Medical Insurance premiums paid by persons decelerated.
- Income receipts on assets (line 8) decreased less in the second quarter, decreasing $1.1 billion after decreasing $13.5 billion in the first quarter. The smaller decrease reflects the pattern of dividends from Federal Reserve banks. Federal Reserve dividends have decreased in recent quarters as the regional banks have become less profitable. As interest rates have risen, the interest expenses of the Federal Reserve banks have grown and largely exceed the income they earn on their asset holdings. When the Federal Reserve experiences losses, it creates a deferred asset, which is effectively an “IOU” to itself. The Federal Reserve banks will apply future earnings against these deferred assets and will not resume paying dividends to the U.S. Treasury until the deferred amounts are fully settled.
- Current transfer receipts (line 9) turned up in the second quarter, increasing $2.7 billion after decreasing $15.3 billion in the first quarter, reflecting an upturn in current transfer receipts from the rest of the world and a smaller decrease in current transfer receipts from business. The decrease in the first quarter followed several fourth-quarter settlements. Fourth-quarter receipts from the rest of the world included fines paid by Danske Bank, Lafarge SA, and Glencore. Fourth-quarter receipts from business were boosted by a $1.7 billion ($6.8 billion at an annual rate) settlement with Wells Fargo for consumer loan abuses and a $0.3 billion ($1.3 billion at an annual rate) settlement with U.S. affiliates of Glencore for bribery and market manipulation.
- Consumption expenditures (line 12) decelerated, increasing $4.2 billion in the second quarter after increasing $35.1 billion in the first quarter, reflecting a downturn in nondefense consumption expenditures and a deceleration in national defense consumption expenditures. The downturn in nondefense consumption expenditures reflects an upturn in sales to other sectors, specifically an increase in Strategic Petroleum Reserve sales. The deceleration in national defense consumption expenditures reflects a deceleration in spending for defense services.
- Government social benefits to persons (line 17) turned down in the second quarter, decreasing $16.1 billion after increasing $49.1 billion in the first quarter. The downturn in the second quarter reflects a deceleration in social security benefits; first-quarter benefits were boosted by an 8.7 percent cost-of-living adjustment. Payments of health insurance premium tax credits related to the Affordable Care Act (ACA) turned down, reflecting a decrease in the number of people enrolled in ACA plans. SNAP (Supplemental Nutrition Assistance Program) benefits decreased more in the second quarter, reflecting a return to normal benefit payments, which now exclude emergency supplements that were temporarily authorized by Congress to assist during the COVID–19 pandemic. The Consolidated Appropriations Act, 2023 passed by Congress ended these emergency allotments. Partially offsetting these decreases, the child tax credit remained unchanged after decreasing $69.8 billion in the first quarter.
- Grants-in-aid to state and local governments (line 20) turned down in the second quarter, decreasing $0.5 billion after increasing $28.4 billion in the first quarter. A downturn in education grants and a deceleration in Medicaid grants were partially offset by an upturn in income security grants.
- Interest payments (line 22) decelerated in the second quarter, increasing $35.8 billion after increasing $44.2 billion in the first quarter. Interest paid on treasury bills and notes decelerated.
- Capital transfer payments (line 33) accelerated in the second quarter, increasing $17.8 billion after increasing $3.9 billion in the first quarter. Capital transfers to persons turned up in the second quarter, reflecting the cancellation of student loan debt in a class-action lawsuit by defrauded borrowers and the U.S. Department of Education, ending in a settlement of $24.0 billion at an annual rate.
| Line | Component | Level | Change from preceding quarter | |||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | ||||
| Q2 | Q3 | Q4 | Q1 | Q2 | ||
| 1 | Current receipts | 4,685.6 | −33.3 | −57.2 | −283.4 | 34.5 |
| 2 | Current tax receipts | 2,791.6 | 2.7 | −53.2 | −296.8 | 10.5 |
| 3 | Personal current taxes | 2,177.9 | 19.3 | −31.8 | −309.1 | −3.1 |
| 4 | Taxes on production and imports | 175.4 | −10.6 | −11.3 | −3.9 | −1.6 |
| 5 | Taxes on corporate income | 403.3 | −5.2 | −10.0 | 15.0 | 14.7 |
| 6 | Taxes from the rest of the world | 34.9 | −0.8 | −0.1 | 1.2 | 0.4 |
| 7 | Contributions for government social insurance | 1,780.9 | 41.8 | 7.1 | 41.8 | 22.4 |
| 8 | Income receipts on assets | 41.9 | −66.4 | −26.4 | −13.5 | −1.1 |
| 9 | Current transfer receipts | 63.3 | −11.2 | 15.2 | −15.3 | 2.7 |
| 10 | Current surplus of government enterprises | 8.0 | −0.2 | 0.1 | 0.3 | 0.2 |
| 11 | Current expenditures | 6,346.3 | 78.9 | 111.3 | 149.1 | 21.5 |
| 12 | Consumption expenditures | 1,307.2 | 23.0 | 35.5 | 35.1 | 4.2 |
| 13 | National defense | 764.9 | 8.6 | 11.8 | 16.4 | 4.9 |
| 14 | Nondefense | 542.3 | 14.3 | 23.8 | 18.7 | −0.7 |
| 15 | Current transfer payments | 4,030.4 | −2.3 | 9.1 | 77.7 | −16.9 |
| 16 | Government social benefits | 2,961.5 | −27.2 | 29.1 | 51.3 | −15.5 |
| 17 | To persons | 2,929.7 | −27.8 | 29.3 | 49.1 | −16.1 |
| 18 | To the rest of the world | 31.8 | 0.6 | −0.2 | 2.2 | 0.6 |
| 19 | Other current transfer payments | 1,068.8 | 24.9 | −20.0 | 26.4 | −1.5 |
| 20 | Grants-in-aid to state and local governments | 974.1 | −11.6 | −4.0 | 28.4 | −0.5 |
| 21 | To the rest of the world | 94.8 | 36.5 | −16.0 | −2.0 | −0.9 |
| 22 | Interest payments | 909.6 | 70.0 | 75.8 | 44.2 | 35.8 |
| 23 | Subsidies | 99.2 | −11.8 | −9.1 | −7.9 | −1.5 |
| 24 | Net federal government saving | −1,660.7 | −112.2 | −168.5 | −432.5 | 13.0 |
| 25 | Social insurance funds | −529.5 | 34.6 | −12.5 | −69.7 | 0.5 |
| 26 | Other | −1,131.2 | −146.9 | −156.1 | −362.7 | 12.5 |
| Addenda: | ||||||
| 27 | Total receipts | 4,716.7 | −32.2 | −59.2 | −285.2 | 35.4 |
| 28 | Current receipts | 4,685.6 | −33.3 | −57.2 | −283.4 | 34.5 |
| 29 | Capital transfer receipts | 31.0 | 1.1 | −2.0 | −1.8 | 0.8 |
| 30 | Total expenditures | 6,549.0 | −236.8 | 115.9 | 152.0 | 45.2 |
| 31 | Current expenditures | 6,346.3 | 78.9 | 111.3 | 149.1 | 21.5 |
| 32 | Gross government investment | 437.2 | 1.2 | 19.9 | 3.8 | 9.5 |
| 33 | Capital transfer payments | 133.3 | −237.8 | −100.9 | 3.9 | 17.8 |
| 34 | Net purchases of nonproduced assets | 0.3 | −73.4 | 90.2 | 0.6 | 0.1 |
| 35 | Less: Consumption of fixed capital | 368.0 | 5.7 | 4.6 | 5.3 | 3.7 |
| 36 | Net lending or net borrowing (−) | −1,832.3 | 204.6 | −175.1 | −437.2 | −9.8 |
Net state and local government saving was −$184.7 billion in the second quarter, decreasing $121.3 billion from −$63.4 billion in the first quarter. In the second quarter, current receipts decreased more and current expenditures accelerated relative to the first quarter (table 3).
In the second quarter, net borrowing was $254.3 billion, increasing $136.0 billion from $118.3 billion in the first quarter.
- Personal current taxes (line 3) decreased more in the second quarter, decreasing $53.9 billion after decreasing $22.9 billion, reflecting a larger decrease in personal income taxes.
- Taxes on production and imports (line 4) turned down in the second quarter, decreasing $7.9 billion after increasing $14.5 billion, reflecting a downturn in state excise taxes and a deceleration in state sales taxes.
- Taxes on corporate income (line 5) turned down in the second quarter, decreasing $21.8 billion after increasing $12.0 billion.
- Federal grants-in-aid (line 9) turned down in the first quarter, decreasing $0.5 billion after increasing $28.4 billion. A downturn in education grants and a deceleration in Medicaid grants were partially offset by an upturn in income security grants.
- Other current transfer receipts (line 10) turned up in the second quarter, increasing $0.6 billion after decreasing $27.2 billion, reflecting an upturn in current transfer receipts from the rest of the world. The decrease in the first quarter followed several fourth-quarter settlements. Fourth-quarter receipts were boosted $6.7 billion ($26.8 billion at an annual rate) from two settlements between multiple state governments and Teva Pharmaceuticals and Allergan to resolve opioid-related claims.
- Consumption expenditures (line 13) turned down in the second quarter, decreasing $10.8 billion after increasing $12.6 billion, reflecting a deceleration in spending for both education compensation and general government services.
- Government social benefits (line 14) turned up in the second quarter, increasing $31.8 billion after decreasing $22.5 billion in the first quarter. The first-quarter decrease followed state stimulus payments to individuals that boosted fourth-quarter benefits. More information can be found in the FAQ “How are state refundable tax credits recorded in the National Income and Product Accounts (NIPAs)?”. The upturn was partially offset by a deceleration in Medicaid benefits.
- Capital transfer receipts (line 22) turned up in the second quarter, increasing $6.7 billion after decreasing $54.2 billion in the first quarter. The decrease in the first quarter followed fourth-quarter settlements totaling $13.4 billion ($53.6 billion at an annual rate) between CVS, Walmart, and Walgreens and the states to assist states affected by the opioid epidemic. More information can be found in the FAQ “How do the 2022 national opioid settlements impact the NIPAs?”.
| Line | Component | Level | Change from preceding quarter | |||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | ||||
| Q2 | Q3 | Q4 | Q1 | Q2 | ||
| 1 | Current receipts | 3,584.3 | −35.9 | 27.0 | −0.6 | −86.0 |
| 2 | Current tax receipts | 2,325.6 | −15.1 | 12.6 | 3.6 | −83.7 |
| 3 | Personal current taxes | 528.8 | −39.9 | −9.6 | −22.9 | −53.9 |
| 4 | Taxes on production and imports | 1,646.2 | 22.2 | 7.8 | 14.5 | −7.9 |
| 5 | Taxes on corporate income | 150.7 | 2.7 | 14.3 | 12.0 | −21.8 |
| 6 | Contributions for government social insurance | 21.4 | −0.2 | −0.4 | −0.5 | −0.1 |
| 7 | Income receipts on assets | 100.6 | 1.2 | 1.5 | 0.3 | 0.8 |
| 8 | Current transfer receipts | 1,154.8 | −18.8 | 20.3 | 1.1 | 0.1 |
| 9 | Federal grants-in-aid | 974.1 | −11.6 | −4.0 | 28.4 | −0.5 |
| 10 | Other | 180.7 | −7.3 | 24.2 | −27.2 | 0.6 |
| 11 | Current surplus of government enterprises | −18.0 | −2.9 | −7.0 | −5.0 | −3.1 |
| 12 | Current expenditures | 3,769.0 | 37.7 | 97.8 | 12.4 | 35.3 |
| 13 | Consumption expenditures | 2,388.3 | 15.5 | 23.3 | 12.6 | −10.8 |
| 14 | Government social benefits | 1,087.5 | 20.2 | 62.7 | −22.5 | 31.8 |
| 15 | Interest payments | 292.5 | 2.0 | 11.7 | 22.3 | 14.3 |
| 16 | Subsidies | 0.7 | 0.0 | 0.0 | 0.0 | 0.0 |
| 17 | Net state and local government saving | −184.7 | −73.5 | −70.8 | −13.0 | −121.3 |
| 18 | Social insurance funds | 3.0 | −0.4 | −0.4 | −0.6 | −0.2 |
| 19 | Other | −187.7 | −73.2 | −70.3 | −12.5 | −121.1 |
| Addenda: | ||||||
| 20 | Total receipts | 3,680.0 | −411.1 | 6.1 | −54.7 | −79.4 |
| 21 | Current receipts | 3,584.3 | −35.9 | 27.0 | −0.6 | −86.0 |
| 22 | Capital transfer receipts | 95.7 | −375.3 | −20.9 | −54.2 | 6.7 |
| 23 | Total expenditures | 3,934.2 | 61.8 | 98.0 | 26.0 | 56.6 |
| 24 | Current expenditures | 3,769.0 | 37.7 | 97.8 | 12.4 | 35.3 |
| 25 | Gross government investment | 537.2 | 22.7 | 15.7 | 20.1 | 23.0 |
| 26 | Capital transfer payments | … | … | … | … | … |
| 27 | Net purchases of nonproduced assets | 19.7 | 0.2 | 0.1 | 0.2 | 0.2 |
| 28 | Less: Consumption of fixed capital | 391.7 | 8.7 | 5.7 | 6.6 | 2.0 |
| 29 | Net lending or net borrowing (−) | −254.3 | −473.0 | −91.9 | −80.8 | −136.0 |
- …
- Data not available
