Government receipts and expenditures: estimates for the first quarter of 2007.

Kelly, Pamela A.

NET GOVERNMENT saving, the difference between current receipts and current expenditures of the Federal Government and state and local governments, was--$171.6 billion in the first quarter of 2007, decreasing $32.4 billion from--$139.2 billion in the fourth quarter.

Net Federal Government saving was--$133.7 billion in the first quarter, decreasing $13.0 billion from--$120.7 billion in the fourth quarter (see page 12). Current receipts accelerated, and current expenditures turned up.

Net state and local government saving was--$37.9 billion in the first quarter, decreasing $19.5 billion from--$18.4 billion in the fourth quarter (see page 13). Current receipts and current expenditures accelerated.

Net borrowing was $349.5 billion in the first quarter, increasing $96.3 billion from $253.4 billion in the fourth quarter. Federal Government net borrowing was $188.1 billion in the first quarter, increasing $62.6 billion from $125.5 billion in the fourth quarter. State and local government net borrowing was $161.4 billion in the first quarter, increasing $33.7 billion from $127.7 billion in the fourth quarter.

[GRAPHIC OMITTED]

Federal Government

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

Contributions for government social insurance accelerated because of administrative changes that took effect in January. Contributions for social security by employers, employees, and the self-employed accelerated as a result of an increase in the maximum taxable wage base to $97,500 in 2007 from $94,200 in 2006. Contributions for supplementary medical insurance accelerated because of an increase in the monthly premiums paid by participants of Medicare Part B; beginning in 2007, one monthly premium has been replaced by five premium rates based on income, ranging from $93.50 to $161.40 a month.

National defense consumption expenditures turned down, primarily reflecting a downturn in spending for services.

Nondefense consumption expenditures turned up, reflecting an upturn in compensation of employees because of the January 2007 pay raise, which boosted compensation $1.9 billion, and an upturn in civilian employment.

Government social benefits to persons accelerated, reflecting the 3.3-percent cost-of-living adjustment that boosted benefits for social security, veterans' pensions, supplemental security income, and other programs by $21.0 billion in January.

Other current transfer payments to the rest of the world turned up, reflecting a $2.5 billion increase ($10.0 billion at an annual rate) in economic support payments to Israel and Egypt.

Interest payments turned down, reflecting the downturn in interest paid on Treasury Inflation-Protected Securities.

Net purchases of nonproduced assets turned up following large receipts from spectrum auctions in the fourth quarter.

State and Local Government

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

Taxes on corporate income turned up, reflecting an upturn in corporate profits.

Federal grants-in-aid turned up, reflecting an upturn in Medicaid grants.

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

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

Gross government investment accelerated, reflecting an acceleration 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. (1) For a historical time series of this comparison, see NIPA table 3.18B.

(1.) See Mary L. Roy and Andrew P. 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 now 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 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 2006 2007

 I II III IV I

Current receipts 4,129.1 66.5 28.7 44.2 94.6
Current expenditures 4,300.8 69.3 74.9 0.2 127.1

Net government saving -171.6 -2.6 -46.4 44.1 -32.4
 Federal -133.7 -16.1 -9.9 52.3 -13.0
 State and local -37.9 13.4 -36.3 -8.2 -19.5

Net lending or
net borrowing (-) -349.5 -5.5 -47.1 94.2 -96.3
 Federal -188.1 -9.9 -14.4 104.9 -62.6
 State and local -161.4 4.4 -32.7 -10.7 -33.7

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

 Change from
 Level preceding quarter

 2007 2006

 I II III

 Current receipts 2,662.7 32.3 34.0
Current tax receipts 1,640.1 28.3 26.0
 Personal current taxes 1,134.7 10.7 14.8
 Taxes on production and imports 97.8 1.9 -1.7
 Taxes on corporate income 395.8 15.1 12.4
 Taxes from the rest of the world 11.7 0.5 0.4

Contributions for government social
 insurance 966.8 2.2 6.4
Income receipts on assets 26.9 0.9 1.2
Current transfer receipts 32.5 0.6 0.8
Current surplus of
 government enterprises -3.5 0.3 -0.4

 Current expenditures 2,796.4 48.3 44.0
Consumption expenditures 825.3 -1.3 6.8
 National defense 552.7 0.0 1.6
 Nondefense 272.6 -1.3 5.2

Current transfer payments 1,618.6 24.6 18.2
 Government social benefits 1,217.3 17.6 8.8
 To persons 1,214.1 17.6 9.0
 To the rest of the world 3.2 0.1 -0.2
 Other current transfer payments 401.4 7.0 9.3
 Grants-in-aid
 to state and local
 governments 370.5 5.7 8.6
 To the rest of the world 30.9 1.2 0.8

Interest payments 302.8 27.9 19.5
Subsidies 49.7 -2.8 -0.5
Less: Wage accruals
 less disbursements 0.0 0.0 0.0
Government saving -133.7 -16.1 -9.9
Social insurance funds 52.1 -13.6 -0.5
Other -185.8 -13.6 -9.4

Addenda:
 Total receipts 2,685.0 31.2 32.8
 Current receipts 2,662.7 32.3 34.0
 Capital transfer receipts 22.3 -1.1 -1.2
 Total expenditures 2,873.1 41.1 47.2
 Current expenditures 2,796.4 48.3 44.0
 Gross government investment 2,711.8 -0.8 0.7
 Capital transfer payments 67.2 -2.8 0.9
 Net purchases of
 nonproduced assets -1.3 -2.5 3.1
 Less: Consumption
 of fixed capital 107.0 1.3 1.4
Net lending or net borrowing (-) -188.1 -9.9 -14.4

 Change from
 preceding quarter

 2006 2007

 IV I

 Current receipts 34.7 70.8
Current tax receipts 17.2 43.7
 Personal current taxes 27.3 42.7
 Taxes on production and imports -3.4 -0.1
 Taxes on corporate income -13.3 7.3
 Taxes from the rest of the world 6.7 -6.3

Contributions for government social
 insurance 16.6 29.7
Income receipts on assets 1.6 -0.1
Current transfer receipts -0.6 -0.5
Current surplus of
 government enterprises -0.1 -1.9

 Current expenditures -17.5 83.7
Consumption expenditures 8.0 8.2
 National defense 13.7 -0.3
 Nondefense -5.8 8.6

Current transfer payments 6.3 47.5
 Government social benefits 16.3 25.8
 To persons 16.3 125.7
 To the rest of the world 0.1 0.0
 Other current transfer payments -10.0 21.8
 Grants-in-aid
 to state and local
 governments 7.4 12.3
 To the rest of the world -2.6 9.5

Interest payments -31.0 28.9
Subsidies -0.8 -0.9
Less: Wage accruals
 less disbursements 0.0 0.0
Government saving 52.3 -13.0
Social insurance funds 4.4 5.6
Other 47.9 -8.6

Addenda:
 Total receipts 35.3 66.0
 Current receipts 34.7 70.8
 Capital transfer receipts 0.6 -4.8
 Total expenditures -69.7 128.7
 Current expenditures -17.5 83.7
 Gross government investment 2.5 -2.8
 Capital transfer payments -0.9 -2.0
 Net purchases of
 nonproduced assets -52.9 50.8
 Less: Consumption
 of fixed capital 0.9 1.0
Net lending or net borrowing (-) 104.9 -62.6

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

 Change from
 Level preceding quarter

 2007 2006 2007

 I II III IV I

 Current receipts 1,836.9 40.1 3.2 2.1 36.1
Current tax receipts 1,265.2 32.0 -7.4 7.8 21.5
 Personal current taxes 314.8 17.7 -13.3 2.4 14.6
 Taxes on production
 and imports 881.0 11.9 3.9 7.8 6.0
 Taxes on corporate
 income 69.3 2.4 2.1 -2.4 0.8
Contributions for
 government social
 insurance 25.1 -0.1 0.0 0.1 0.3
Income receipts on assets 78.9 0.7 0.5 0.3 0.7
Current transfer receipts 477.6 7.8 10.5 -5.5 14.3
 Federal grants-in-aid 370.5 5.7 8.6 -7.4 12.3
 Other 107.1 2.0 2.0 2.0 1.9
Current surplus of
 government enterprises -9.9 0.4 0.5 -0.7 -0.5

Current expenditures 1,874.8 26.7 39.5 10.3 55.6
Consumption expenditures 1,342.0 24.5 19.3 16.5 25.5
Government social
 benefits 435.0 1.3 19.3 -5.5 29.5
Interest paid 97.5 0.8 0.9 -0.7 0.7
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 -37.9 13.4 -36.3 -8.2 -19.5
Social insurance funds 5.4 -0.4 -0.3 -0.2 0.1
Other -43.3 13.9 -36.1 -8.1 -19.5

Addenda:
 Total receipts 1,887.7 40.4 5.1 1.0 30.1
 Current receipts 1,836.9 40.1 3.2 2.1 36.1
 Capital transfer
 receipts 50.8 0.4 2.0 -1.1 -6.1
 Total expenditures 2,049.1 36.1 37.8 11.8 63.7
 Current expenditures 1,874.8 26.7 39.5 10.3 55.6
 Gross government
 investment 333.5 11.8 1.5 5.9 12.6
 Capital transfer
 payments ... ... ... ... ...
 Net purchases of
 nonproduced assets 12.5 0.2 0.1 0.1 0.1
 Less: Consumption
 of fixed capital 171.7 2.5 3.3 4.6 4.6
 Net lending or
 net borrowing (-) -161.4 4.4 -32.7 -10.7 -33.7