Government receipts and expenditures: third 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 -$236.8 billion in the third quarter of 2007, decreasing $43.4 billion from -$193.4 billion in the second quarter, according to the "preliminary" estimates. (1)

Net Federal Government saving was -$229.2 billion in the third quarter, decreasing $22.4 billion from -$206.8 billion in the second quarter (see page 12). Current receipts decelerated, and current expenditures accelerated.

Net state and local government saving was -$7.7 billion in the third quarter, decreasing $21.1 billion from $13.4 billion in the second quarter (see page 13). Current receipts decelerated, and current expenditures accelerated. Net borrowing was $431.8 billion in the third quarter, increasing $58.2 billion from $373.6 billion in the second quarter. Federal Government net borrowing was $302.6 billion in the third quarter, increasing $37.5 billion from $265.1 billion in the second quarter. State and local government net borrowing was $129.2 billion in the third quarter, increasing $20.7 billion from $108.5 billion in the second quarter.

[GRAPHIC 1 OMITTED]

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

Taxes on production and imports accelerated, reflecting upturns in tobacco and gasoline excise taxes.

Taxes on corporate income turned down, reflecting a downturn in corporate profits.

Contributions for government social insurance accelerated, reflecting an acceleration in contributions for social security (old-age, survivors, disability, and health insurance trust funds).

National defense consumption expenditures decelerated, reflecting a deceleration in spending for services.

Government social benefits to persons decelerated, reflecting decelerations in benefits for social security, Medicare, veterans' benefits and a downturn in food stamps. Benefits for Medicare prescription drugs accelerated.

Interest payments turned down because of a downturn in interest paid on the public debt.

Subsidies turned down, reflecting a downturn in Federal Emergency Management Agency disaster payments.

Capital transfer receipts turned down, reflecting a downturn in estate and gift taxes.

Personal current taxes turned down, primarily reflecting a downturn in state personal income taxes.

Taxes on corporate income turned down, reflecting a downturn in corporate profits.

Consumption expenditures decelerated, reflecting a slowdown in spending for nondurable goods.

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

Gross government investment decelerated, reflecting a deceleration 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) For a historical time series of this comparison, see NIPA table 3.18B.

(1.) See Mary L. Roy and Andrew E 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 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 2006 SURWY.

(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]

 Change from
 Level preceding quarter

 2007 2006

 III IV

Current receipts 4,206.7 61.7
Current expenditures 4,443.6 8.6
Net government saving -236.8 53.0
 Federal -229.2 57.7
 State and local -7.7 -4.7
Net lending or net borrowing (-) -431.8 102.0
 Federal -302.6 109.7
 State and local -129.2 -7.7

 Change from
 preceding quarter

 2007

 I II III

Current receipts 85.0 81.6 22.8
Current expenditures 135.5 50.6 66.4
Net government saving -50.4 30.9 -43.4
 Federal -37.0 11.7 -22.4
 State and local -13.4 19.2 -21.1
Net lending or net borrowing (-) -118.0 30.9 -58.2
 Federal -89.2 10.5 -37.5
 State and local -28.8 20.4 -20.7

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

 Level Change from
 preceding quarter

 2007 2006

 III IV

 Current receipts 2,687.9 48.8
Current tax receipts 1,667.6 30.1
 Personal current taxes 1,170.0 42.4
 Taxes on production and imports 101.5 -2.1
 Taxes on corporate income 383.6 -16.9
 Taxes from the rest of the world 12.6 6.9
Contributions for government social
 insurance 955.5 17.9
Income receipts on assets 25.1 0.6
Current transfer receipts. 39.4 1.2
Current surplus of government 0.2 -1.0
 enterprises
 Current expenditures 2,917.0 -8.9
Consumption expenditures 867.4 13.1
 National defense 589.5 19.5
 Nondefense 278.0 -6.4
Current transfer payments 1,693.9 5.3
 Government social benefits 1,286.4 17.4
 To persons 1,282.7 17.2
 To the rest of the world 3.7 0.1
 Other current transfer payments 407.5 -12.0
 Grants-in-aid to state and
 local governments 379.1 -7.1
 To the rest of the world 28.4 -5.0
Interest payments 309.3 -26.7
Subsidies 46.4 -0.5
Less: Wage accruals less
 disbursements 0.0 0.0
Net Federal Government saving -229.2 57.7
Social insurance funds -21.0 2.1
Other -208.2 55.6

Addenda:
 Total receipts 2,713.6 49.1
 Current receipts 2,687.9 48.8
 Capital transfer receipts 25.8 0.3
Total expenditures 3,016.3 -60.6
 Current expenditures 2,917.0 -8.9
 Gross government investment 122.6 4.6
 Capital transfer payments 85.3 -2.2
 Net purchases of nonproduced
 assets 2.2 -52.9
 Less: Consumption of fixed capital 110.9 1.2
Net lending or borrowing (-) -302.6 109.7

 Change from
 preceding quarter

 2007

 I II III

 Current receipts 57.8 50.4 17.8
Current tax receipts 33.6 44.2 4.4
 Personal current taxes 39.0 12.9 18.3 (a)
 Taxes on production and imports 0.7 0.4 3.2 (b)
 Taxes on corporate income 0.1 31.0 -17.7 (c)
 Taxes from the rest of the world -6.3 0.0 0.6
Contributions for government social
 insurance 25.2 2.3 9.2 (d)
Income receipts on assets -0.8 0.5 0.0
Current transfer receipts. 1.4 0.4 0.9
Current surplus of government
 enterprises -1.8 3.1 3.2
 Current expenditures 94.8 38.7 40.1
Consumption expenditures 3.4 20.0 17.6
 National defense -5.8 18.1 15.7 (e)
 Nondefense 9.1 2.0 2.0
Current transfer payments 66.0 5.3 23.0
 Government social benefits 34.5 22.9 15.0 (f)
 To persons 34.5 22.8 14.9
 To the rest of the world 0.1 0.1 0.1
 Other current transfer payments 31.4 -17.5 8.0
 Grants-in-aid to state and
 local governments 16.9 2.1 3.0
 To the rest of the world 14.5 -19.7 5.1
Interest payments 26.3 13.1 -0.1 (g)
Subsidies -0.8 0.3 -0.5 (h)
Less: Wage accruals less
 disbursements 0.0 0.0 0.0
Net Federal Government saving -37.0 11.7 -22.4
Social insurance funds -6.3 -17.8 -4.1
Other -30.7 29.5 -18.3

Addenda:
 Total receipts 52.3 57.1 14.9
 Current receipts 57.8 50.4 17.8
 Capital transfer receipts -5.5 6.7 -2.8 (i)
Total expenditures 141.5 46.6 52.5
 Current expenditures 94.8 38.7 40.1
 Gross government investment -6.5 3.0 2.8
 Capital transfer payments 3.5 7.5 5.7
 Net purchases of nonproduced
 assets 50.8 -1.0 4.5
 Less: Consumption of fixed capital 1.1 1.6 0.7
Net lending or borrowing (-) -89.2 10.5 -37.5

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

 III IV

 Current receipts 1,898.0 5.7

Current tax receipts 1,301.5 10.9
 Personal current taxes 320.4 3.6
 Taxes on production and imports 916.9 9.6
 Taxes on corporate income 64.3 -2.4
Contributions for government social
 insurance 25.9 -0.1
Income receipts on assets 89.7 0.5
Current transfer receipts 493.1 -4.9
 Federal grants-in-aid 379.1 -7.1
 Other 114.1 2.2
Current surplus of government
 enterprises -12.4 -0.6

 Current expenditures 1,905.6 10.4

Consumption expenditures 1,374.1 13.1
Government social benefits 431.8 -2.4
Interest payments 99.4 -0.3
Subsidies 0.4 0.0
Less: Wage accruals less
 disbursements 0.0 0.0

Net state and local government saving -7.7 -4.7
Social insurance funds 6.0 -0.3
Other -13.7 -4.4

Addenda:
 Total receipts 1,961.0 3.5
 Current receipts 1,898.0 5.7
 Capital transfer receipts 63.0 -2.2
 Total expenditures 2,090.2 11.3
 Current expenditures 1,905.6 10.4
 Gross government investment 352.2 4.5
 Capital transfer payments ... ...
 Net purchases of nonproduced
 assets 11.4 0.1
 Less: Consumption of fixed
 capital 179.0 3.8
Net lending or borrowing (-) -129.2 -7.7

 Change from
 preceding quarter

 2007

 I II III

 Current receipts 44.2 33.3 8.1

Current tax receipts 25.3 28.5 2.4
 Personal current taxes 14.6 10.0 -5.5 (a)
 Taxes on production and imports 11.4 12.8 11.1
 Taxes on corporate income -0.6 5.6 -3.1 (b)
Contributions for government social
 insurance -0.1 0.1 0.0
Income receipts on assets 0.0 0.6 0.8
Current transfer receipts 18.9 4.3 5.2
 Federal grants-in-aid 16.9 2.1 3.0
 Other 1.9 2.3 2.3
Current surplus of government
 enterprises -0.1 -0.2 -0.4

 Current expenditures 57.6 14.1 29.1

Consumption expenditures 25.9 29.2 18.2 (c)
Government social benefits 30.6 -16.6 10.3 (d)
Interest payments 1.2 1.3 0.8
Subsidies 0.0 0.0 0.0
Less: Wage accruals less
 disbursements 0.0 0.0 0.0

Net state and local government saving -13.4 19.2 -21.1
Social insurance funds -0.3 -0.1 -0.2
Other -13.2 19.4 -20.9

Addenda:
 Total receipts 37.9 40.7 13.0
 Current receipts 44.2 33.3 8.1
 Capital transfer receipts -6.3 7.5 4.9
 Total expenditures 66.6 20.4 33.7
 Current expenditures 57.6 14.1 29.1
 Gross government investment 14.1 9.5 7.7 (e)
 Capital transfer payments ... ... ...
 Net purchases of nonproduced
 assets 0.0 0.0 0.0
 Less: Consumption of fixed
 capital 5.1 3.2 3.1
Net lending or borrowing (-) -28.8 20.4 -20.7