Government receipts and expenditures: fourth quarter of 2007.

Chaudhuri, Debasis

NET GOVERNMENT saving, the difference between current receipts and current expenditures of the federal government and state and local governments, was -$268.5 billion in the fourth quarter of 2007, decreasing $25.3 billion from -$243.2 billion in the third quarter.

Net federal government saving was -$226.7 billion in the fourth quarter, increasing $3.6 billion from -$230.3 billion in the third quarter (see page 7). Both current receipts and current expenditures decelerated.

Net state and local government saving was -$41.9 billion in the fourth quarter, decreasing $28.9 billion from -$13.0 billion in the third quarter (see page 8). Both current receipts and current expenditures accelerated.

Net borrowing was $469.9 billion in the fourth quarter, increasing $32.1 billion from $437.8 billion in the third quarter. Federal government net borrowing was $298.9 billion in the fourth quarter, decreasing $4.8 billion from $303.7 billion in the third quarter. State and local government net borrowing was $171.1 billion in the fourth quarter, increasing $37.0 billion from $134.1 billion in the third quarter.

[GRAPHIC 1 OMITTED]

Federal Government

Personal current taxes decelerated, reflecting a deceleration in withheld income taxes.

Taxes on production and imports decelerated, reflecting a downturn in excise taxes for gasoline and air transportation.

Taxes on corporate income decreased less than in the third quarter, reflecting the continued weakness in corporate profits.

Contributions for government social insurance decelerated, reflecting a deceleration in contributions for social security (old-age, survivors, disability, and health insurance trust funds).

Current surplus of government enterprises turned down, reflecting a downturn in the Postal Service. The third-quarter surplus was boosted by rate increases that took effect in May.

National defense consumption expenditures decelerated, reflecting a deceleration in spending for services and downturns in spending for durable and nondurable goods.

Government social benefits to persons decelerated, reflecting a downturn in benefits for Medicare. Benefits for prescription drugs were reduced as a result of the refunds collected from drug plans, following the program reconciliation for 2006 that showed that these plans, on balance, were overpaid.

Current transfer payments to the rest of the world accelerated, reflecting an acceleration in payments to Afghanistan and an upturn in payments to Iraq.

Interest payments decreased more than in the third quarter, reflecting a bigger decrease in interest paid on the public debt.

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 translates the information in the federal budget into a NIPA framework. (1) For a historical time series of these estimates, see NIPA table 3.18B, which is published annually in October.

(1.) See Benjamin A. Mandel and Andrew E. Vargo, "NIPA Translation of the Fiscal Year 2009 Federal Budget," SURVEY or CURRENT BUSINESS 88 (March 2008): 19-27.

State and Local Government

Personal current taxes turned up, reflecting an upturn in state personal income taxes.

Taxes on production and imports accelerated, reflecting an upturn in severance taxes and an acceleration in sales taxes.

Taxes on corporate income decreased less than in the third quarter, reflecting the continued weakness in corporate profits.

Consumption expenditures accelerated, reflecting an acceleration in spending for nondurable goods.

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 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 2007 SURVEY.

(1.) Bruce E. Baker, "Receipts and Expenditures of State Governments and of Local Governments," SURVEY 85 (October 2005): 5-10.

Table 1. Net Government Saving and Net Lending or Net Borrowing
[Billions of dollars, seasonally adjusted at annual rates]

 Level Change from preceding quarter

 2007 2007

 IV I II III IV

Current receipts 4,232.1 85.0 81.6 19.2 29.0
Current expenditures 4,500.6 135.5 50.6 69.2 54.2
Net government saving -268.5 -50.4 30.9 -49.8 -25.3
 Federal -226.7 -37.0 11.7 -23.5 3.6
 State and local -41.9 -13.4 19.2 -26.4 -28.9
Net lending or net
 borrowing (-) -469.9 -118.0 30.9 -64.2 -32.1
 Federal -298.9 -89.2 10.5 -38.6 4.8
 State and local -171.1 -28.8 20.4 -25.6 -37.0

Table 2. Federal Government Current Receipts and Expenditures
[Billions of dollars, seasonally adjusted at annual rates]

 Level Change from preceding quarter

 2007 2007

 IV I II III IV

 Current receipts 2,706.5 57.8 50.4 19.3 17.1

Current tax receipts 1,675.5 33.6 44.2 4.0 8.3
 Personal current taxes 1,187.2 39.0 12.9 19.0 16.5
 Taxes on production and
 imports 102.2 0.7 0.4 3.1 0.8
 Taxes on corporate income 369.1 0.1 31.0 -18.8 -13.4
 Taxes from the rest of the
 world 17.0 -6.3 0.0 0.6 4.4
Contributions for government
 social insurance 964.6 25.2 2.3 11.0 7.3
Income receipts on assets 25.4 -0.8 0.5 0.2 0.1
Current transfer receipts 41.4 1.4 0.4 0.9 2.0
Current surplus of
 government enterprises -0.4 -1.8 3.1 3.2 -0.6

 Current expenditures 2,933.2 94.8 38.7 42.8 13.5

Consumption expenditures 876.9 3.4 20.0 17.9 9.2
 National defense 596.4 -5.8 18.1 15.8 6.8
 Nondefense 280.5 9.1 2.0 2.1 2.4
Current transfer payments 1,714.5 66.0 5.3 25.5 18.1
 Government social benefits 1,291.1 34.5 22.9 14.9 4.8
 To persons 1,287.5 34.5 22.8 14.8 4.9
 To the rest of the world 3.5 0.1 0.1 0.1 -0.2
 Other current transfer
 payments 423.4 31.4 -17.5 10.7 13.2
 Grants-in-aid to state and
 local governments 380.7 16.9 2.1 3.0 1.6
 To the rest of the world 42.7 14.5 -19.7 7.8 11.6
Interest payments 294.7 26.3 13.1 -0.1 -14.6
Subsidies 47.1 -0.8 0.3 -0.7 0.9
Less: Wage accruals less
 disbursements 0.0 0.0 0.0 0.0 0.0

Net federal government
 saving -226.7 -37 11.7 -23.5 3.6
Social insurance funds -12.1 -6.3 -17.8 -2.3 7.1
Other -214.6 -30.7 29.5 -21.2 -3.5

Addenda:
 Total receipts 2,734.8 52.3 57.1 16.4 19.7
 Current receipts 2,706.5 57.8 50.4 19.3 17.1
 Capital transfer
 receipts 28.2 -5.5 6.7 -2.8 2.4
 Total expenditures 3,033.6 141.5 46.6 55.0 14.8
 Current expenditures 2,933.2 94.8 38.7 42.8 13.5
 Gross government
 investment 120.8 -0.5 3.0 2.8 -1.8
 Capital transfer
 payments 93.5 3.5 7.5 5.7 8.2
 Net purchases of
 nonproduced assets -1.7 50.8 -1.0 4.5 -3.9
 Less: Consumption of
 fixed capital 112.0 1.1 1.6 0.7 1.1
Net lending or net
 borrowing (-) -298.9 -89.2 10.5 -38.6 4.8

Table 3. State and Local Government Current Receipts and Expenditures
[Billions of dollars, seasonally adjusted at annual rates]

 Level Change from preceding quarter

 2007 2007

 IV I II III IV

 Current receipts 1,906.2 44.2 33.3 2.9 13.4

Current tax receipts 1,305.1 25.3 28.5 -3.0 9.0
 Personal current taxes 320.9 14.6 10.0 -6.8 1.8
 Taxes on production and
 imports 922.5 11.4 12.8 7.2 9.5
 Taxes on corporate income 61.7 -0.6 5.6 -3.3 -2.4
 Contributions for
 government social
 insurance 26.0 -0.1 0.1 0.0 0.1
Income receipts on assets 90.8 0.0 0.6 1.1 0.8
Current transfer receipts 497.0 18.9 4.3 5.2 3.9
 Federal grants-in-aid 380.7 16.9 2.1 3.0 1.6
 Other 116.3 1.9 2.3 2.3 2.2
Current surplus of
 government enterprises -12.7 -0.1 -0.2 -0.4 -0.3

 Current expenditures 1,948.1 57.6 14.1 29.3 42.3

Consumption expenditures 1,406.4 25.9 29.2 18.4 32.1
Government social benefits 440.9 30.6 -16.6 10.2 9.2
Interest payments 100.4 1.2 1.3 0.7 1.1
Subsidies 0.4 0.0 0.0 0.0 0.0
Less: Wage accruals less
 disbursements 0.0 0.0 0.0 0.0 0.0

Net state and local
 government saving -41.9 -13.4 19.2 -26.4 -28.9
Social insurance funds 5.9 -0.3 -0.1 -0.2 -0.1
Other -47.8 -13.2 19.4 -26.2 -28.8

Addenda:
 Total receipts 1,966.4 37.9 40.7 8.0 10.4
 Current receipts 1,906.2 44.2 33.3 2.9 13.4
 Capital transfer receipts 60.2 -6.3 7.5 5.0 -2.9
 Total expenditures 2,137.4 66.6 20.4 33.6 47.3
 Current expenditures 1,948.1 57.6 14.1 29.3 42.3
 Gross government
 investment 360.3 14.1 9.5 7.4 8.4
 Capital transfer payments
 Net purchases of
 nonproduced assets 11.4 0.0 0.0 0.0 0.0
 Less: Consumption of fixed
 capital 182.4 5.1 3.2 3.1 3.4
Net lending or net
 borrowing (-) -171.1 -28.8 20.4 -25.6 -37.0