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Treasury Report Sparks Rumors of Fannie/Freddie Liberation
By: Jann Swanson • 38 Min, 25 Secs ago
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Sources are telling Bloomberg that a report on the White House's plan to release Fannie Mae and Freddie Mac (the GSEs) from their 11-year long conservatorship has landed on the desks of several agencies and is also in the hands of Lawrence Kudlow, head of the National Economic Council. Bloomberg staff say this is a sign the report is getting closer to being released publicly.
The two mortgage giants were placed in conservatorship with the Federal Housing Finance Agency (FHFA) in August 2008 after they incurred large losses through mortgage defaults during the housing crisis. Over the next four years they each drew substantial operating funds from the Treasury, but both returned to profitability in 2013 and have earned billions of dollars since. All of their profits except for a relatively small buffer has been swept into the Treasury as dividends. The companies have not been allowed to rebuild capital nor have the payments to Treasury reduced any of their massive debt.
The new report was prepared by the Treasury Department and is said to address their path out of conservatorship and plans for them to rebuild capital. Among discussions in Congress and the administration has been the possibility of public offerings, an issue that is complicated. The Treasury Department debt is secured with the entirety of the Senior Preferred Stock in each of the companies and the common and regular preferred stock that was issued pre-conservatorship is still outstanding and actively traded.
Regardless of what is proposed in the report from Treasury, it is likely Congress will insist on input. Both House and Senate have held numerous hearings on housing finance reform including the fate of the GSEs, and there are currently several related bills wending their way through both houses. Among the sticking points is the role the government will play in guaranteeing loans that are sold on the secondary market and whether the GSEs would have competition in that market.
The report was originally expected to be made public in June, but Bloomberg says the administration was concerned that any bold steps could upset the housing market before the 2020 election.
Rumors of the report sparked gains in the stocks of both companies. According to Bloomberg Fannie's stock was up 8.2 percent to $2.45 and Freddie's gained 7.7 percent to $2.38. As discussions about allowing the companies to move out of conservatorship picked up again earlier this year the price of both stocks has more than doubled.
http://amp.mortgagenewsdaily.com/article/919544
In a way there has never been a real world experience in this country like the looting of the twins.
Go FnF!
Fannie and Freddie Surge as Release Plan Hits Kudlow’s Desk
Austin Weinstein Saleha Mohsin Jennifer Jacobs
Aug 22 2019, 3:12 AM IST Aug 22 2019, 7:12 PM IST
(Bloomberg) -- The long-awaited Trump administration plan for freeing Fannie Mae and Freddie Mac from federal control has been sent to top officials at the White House and various government agencies, a sign the report is getting closer to being released publicly, according to people familiar with the matter.
(Bloomberg) -- The long-awaited Trump administration plan for freeing Fannie Mae and Freddie Mac from federal control has been sent to top officials at the White House and various government agencies, a sign the report is getting closer to being released publicly, according to people familiar with the matter.
A draft of the Treasury Department report was sent to the White House staff secretary, the people said, who distributes information to senior officials. Among those in possession of the plan is White House economic adviser Larry Kudlow, who is reviewing it and may request changes, said two people with knowledge of the matter, who like the others asked not to be named in discussing internal deliberations.
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The report will address ways to rebuild Fannie and Freddie’s capital, as well as their path out of conservatorship, one of the people said. But it is unlikely to discuss potential ways to pull off initial public offerings, which is one way to raise capital that some officials have previously examined, the person said.
Fannie rose 8.2% to $2.45, while Freddie gained 7.7% to $2.38 following news reports on Treasury’s progress. The companies have more than doubled this year amid a number of public statements from administration officials about their eagerness to get the companies out of the government’s grip.
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Read More: Fannie and Freddie Died But Were Reborn, Profitably
Originally expected to be made public as early as June, the Treasury plan has faced delays as the administration grew wary of taking bold steps that could roil the housing market before the 2020 presidential election.
A Treasury spokesman declined to comment, while a White House spokesman didn’t respond to a request for comment.
In March, the administration announced a revived push to end the conservatorships of Fannie and Freddie Mac, which the companies entered in 2008 during collapse of the housing market. Since their takeover, lawmakers have repeatedly failed to agree on an overhaul of the companies that would end government control.
The public release of Treasury’s report could still be weeks away. And any changes it recommends might take months or even years to implement, indicating that the conservatorships may not end anytime soon.
While Fannie and Freddie don’t make loans, they are crucial to keeping the nation’s housing-finance system humming. They buy up mortgages from lenders and package them into bonds that are sold to investors with guarantees of interest and principal, and combined they backstop about $5 trillion of mortgage securities.
While many major reforms to the mortgage giants will require cooperation with Congress, administration officials have power to make far-reaching changes to the housing-finance system. Just last month, regulators announced they would end a crucial rule carve-out that benefited Fannie and Freddie.
https://www.bloombergquint.com/amp/politics/fannie-freddie-plan-nears-release-after-treasury-wraps-up-work
Noted
Go FnF!
Pump? Not this time. No rumors. Real news! When the plan is made official it will be so much more expensive to buy in.
Go FnF!
That's the spirit! No poopie face on you!
Go FnF!
About those dividends,
Is it realistic to expect dividends before recap is complete? I have read all kinds of theories for fast and slow recap.
At least it isn't raining on our FnF parade. Sort of a silver lining. Well, sort of kind of.
Go FnF!
Treasury Plan for Fannie Mae & Freddie Mac near complete
By Charles Gasparino, Lydia MoynihanPublished August 21, 2019Home MortgageFOXBusiness
Treasury reform plan for Fannie, Freddie in final stages: Gasparino
FOX Business’ Charlie Gasparino reports that the Treasury is expected to complete their reform plan for Fannie Mae and Freddie Mac by September or October.
The Treasury Department is putting the final touches on its plan to reform Fannie Mae and Freddie Mac, a potential major step in the Trump Administration’s effort to release the mortgage giants from more than a decade of government control, the FOX Business Network has learned.
Continue Reading Below
The Treasury Department is expected to have its reform plan in place and ready for public release sometime by September or October, according to people with direct knowledge of the matter. Treasury has submitted a draft reform plan to the White House that includes suggestions to end the government control of the mortgage companies, known as Government Sponsored Enterprises (GSEs), sources say. The White House is expected to provide input as soon as this week, these people add.
Once the White House has signed off on Treasury’s plan, it could kick into high gear the long-awaited and promised reform effort by the Trump Administration to release both mortgage entities from government control. Also, the plan would also feature a recapitalization of both companies which would likely include the end of the government extracting all of the GSEs profits, and possibly a public stock offering to bolster Fannie and Freddie’s balance sheets.
The exact details of the Treasury’s plan are unclear, as is the timing of any proposal to release the companies from the government’s grip given the tricky politics involved in any reform effort. Both Fannie (in 1938) and Freddie (in 1970) were created by acts of Congress and regulated by the federal government to promote homeownership, even as they operated as private companies with publicly traded stocks. The GSEs were placed under federal conservatorship in 2008 during the financial crisis.
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Both entities are considered lynchpins of the economically important housing market in that they allow banks to issue 30-year mortgages to homeowners. Without Fannie and Freddie buying those mortgages and repackaging them into bonds, banks would be hard-pressed to make long-term mortgage loans to many working-class Americans.
Meanwhile, Trump Administration officials are said to be mindful that any radical change to the GSEs could shake the housing market during an election year, and negatively impact economic growth. The Treasury reform plan is expected to address those concerns by not calling for an immediate radical overhaul of the companies.
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But the plan is expected to reflect the administration’s thinking that the GSE’s need to become more independent from the federal government and that U.S. taxpayers need to be protected from the type of risk-taking that led to the government takeover. The Treasury plan is expected to suggest that the GSEs need to reduce their “footprint” in the housing market, according to these sources. At the moment, Fannie and Freddie control nearly $5 trillion of the nation’s mortgage business.
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A Treasury spokesman didn’t respond to an email for comment. A spokeswoman for the Federal Housing Finance Agency (FHFA), which is in charge of carrying out the White House plans to reform Fannie and Freddie, declined comment.
On Wednesday, shares of Fannie Mae and Freddie Mac spiked sharply following the FOX Business report on the progress Treasury is making in producing its report. Investors had been selling shares of Fannie and Freddie in recent weeks following news reports that any reform effort may be delayed until the end of the year or even indefinitely.
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Charles Gasparino
?@CGasparino
SCOOP: @USTreasury puts final touches on long awaited @FannieMae @FreddieMac reform memo skedded release in Sept-Oct. Addresses "recap/release" from conservatorship; unlikely to address IPO plans. Treas waiting on final word from @WhiteHouse on memo more @FoxBusiness $FNMA $FMCC
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2:25 PM - Aug 21, 2019
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Investors will pay close attention to the Treasury’s proposal to “recap and release” the companies from government control. A recapitalization of the company’s balance sheet could be positive news to shareholders who have held the stock since the government takeover. Since then both companies have traded as low-value stocks—well below $5 per share -- as the government maintained control of the outfits and siphoned its profits.
Mark Calabria, who was appointed to run FHFA in April, has publicly stated his desire to recapitalize the companies, first by ending the government’s taking of Fannie and Freddie profits (known as the net-worth sweep) and then eventually through a public offering of new stock. Calabria has also said he wants an explicit federal guarantee of Fannie and Freddie’s activities, but that might take an act of Congress, delaying reform even further.
While the Treasury report is expected to discuss recapitalization of the companies it is not expected to address the possibility of a stock issuance, these people say. Under the Treasury’s proposal, it’s unclear how shareholders would fare. A public offering could dilute common shareholders, meaning the value of their shares could fall from their current penny stock levels, but an end to the net-worth sweep might bolster shares.
Those investors holding preferred stock, which offers more protection from dilution, may benefit from any recapitalization.
The Treasury Plan – and a separate plan to be issued by the Department of Housing and Urban Development – may be light on specifics on exactly when these changes will take place, but at least on paper, both will provide the first tangible steps in the reforming GSE’s and their giant share of the housing market.
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https://www.foxbusiness.com/financials/treasury-plan-for-fannie-and-freddie-nearly-complete-said-to-be-issued-after-labor
Why the poopie face?
Go FnF!
Am I in? No. I sold yesterday! I am waiting for a good entry point. I am thinking after en banc. You know when we get some solid news. Right?
Hahaha
Go FnF!
White House seen unveiling Frannie plan after Labor Day - WSJ
Aug. 22, 2019 9:11 AMFederal National Mortgage Association (FNMA)FMCCBy: Liz Kiesche, SA News Editor
Fannie Mae (OTCQB:FNMA) rises 3.5% and Freddie Mac (OTCQB:FMCC) gains 0.8% in premarket trading after the Wall Street Journal reports that the Trump administration is preparing to release soon after Labor Day its long-awaited plan to return the two government-sponsored enterprises to private shareholder ownership.
The two mortgage-insurance giants were taken under government control during the financial crisis to prevent their collapse; for years, Freddie and Fannie's excess capital has been swept to the Treasury Department as dividends.
The plan is expected to be a version of "recap and release," which will make sure that the firms have enough capital to absorb loan losses in future housing downturns, the WSJ reported, citing people familiar with the matter.
The outline isn't expected to provide an details for initial public offerings.
Congress, though, could enact a more fundamental overhaul of the GSEs before the administration's plan takes effect.
Freddie has paid ~$120B and Fannie has paid ~$181B to the Treasury in the years since its came under government conservatorship.
https://seekingalpha.com/amp/news/3493967-white-house-seen-unveiling-frannie-plan-labor-day-wsj
You are getting carried away. Maybe the board realist should sort you out.
Nah!
Go FnF!
At least the author acknowledged hedge funds (and other investors)
Go FnF!
Crypto it has been discussed but a reminder never hurts. Thank you for all of your input. As you know FnF are impossible to predict with pinpoint accuracy. They are completely news driven for big moves up or down. I will buy a little more if fnma has a sizable drop and I get mad enough but I am topped off. Just waiting as I have for years. Thanks again.
Go FnF!
The market is listening to Gasbag.
Go FnF!
Well I certainly hope thet you are eventually very happy.
Go FnF!
Looks like the market likes Gasbag comments
Could run up eod.
Go FnF!
Taxpayers are the GSEs’ true stockholders
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Economics, Housing Center, Housing Finance
Recent comments from a Freddie Mac legacy preferred stockholder calling on the government-sponsored enterprises to “keep what is rightly earned, recapitalize, and exit conservatorship” is wrong on so many levels.
The statement by Fairholme Capital Management’s Chief Investment Officer Bruce Berkowitz in a shareholder letter, calls for an exit strategy of Freddie and Fannie Mae since they “earned and paid $300 billion” to the Treasury Department, “which is $24 billion more than promised” since their 2008 federal conservatorship.
However, Freddie was on the ropes in its competition with Fannie Mae prior to conservatorship, and with no easy way out.
Given this, the true value of stock held by legacy preferred shareholders prior to Freddie’s conservatorship would have likely been zero. Hard to have “rightly earned” anything subsequent to conservatorship, given this fact.
Second, the Federal Housing Enterprises Financial Safety and Soundness Act of 1992warned all investors in Freddie securities, including investors in shares of preferred stock, that they “not be construed” in thinking that the GSE’s would “honor, reimburse, or otherwise guarantee any of their obligations or liabilities.”
Because of this, the original preferred stock holders or their successors, including Fairholme, have hardly “rightly earned” anything. Without the taxpayer’s gratuitous bailout, their investment would have been worthless.
In addition, when the GSEs were placed into conservatorship in September 2008, they were simultaneously bailed out by means of what has since become a series of massive capital infusions. Once again, the original preferred stock holders or their successors had no right to this bailout.
Also, the Treasury and the GSEs simultaneously entered into the Senior Preferred Stock Purchase Agreements, as amended.
These agreements might best be described as unconditional, irrevocable taxpayer-backed lines of credit. It is only this ongoing taxpayer backing that allows the GSEs to continue operating, to sell trillions of dollars in mortgage-backed securities at advantageous rates, and be in a position to make any profits. Once again, the original preferred stock holders or their successors have little claim, or interest in these “profits.”
Lastly, each senior preferred stock purchase agreement provided for a “periodic commitment fee” meant to fully compensate the Treasury for the ongoing support it provided since its December 2009 commitment. To date, not a single penny of such fee has been paid to taxpayers.
This fee is clearly “rightly earned” by the Treasury. The appropriate amount of such fee is quite large, given the roughly $5 trillion in mortgage pools backed by the GSEs at the benefit of taxpayer-backed periodic commitments. At a conservative 16 basis points per year, taxpayers would earn some $7 billion annually after taxes, according to one estimate.
Prior to a third amendment to the senior preferred stock purchase agreement, the periodic commitment fee was routinely waived by Treasury and the Federal Housing Finance Agency. The third amendment provided for the sweep of virtually all GSE profits as dividends to the Treasury Department; and also suspended the payment of the fee so long as the dividend sweep remains in effect.
The real value of the periodic commitment is, as the saying goes, “priceless.”
Any analysis purporting to weigh what has been “rightly earned” must give equal consideration as to what the taxpayers have rightly earned. For example, if a fair analysis finds that the full dividend sweep meets that standard, then it must be recognized as fair.
Fairholme’s desire for the GSEs to be recapitalized and released from conservatorship conveniently ignores the taxpayer’s priceless support in such a proposal.
Taxpayers have a right to expect that any plan to recapitalize the GSEs to then exit conservatorship would provide for at least the following:
First, if the dividend sweep were to be reversed, a minimum 10% dividend should be paid to taxpayers and continue to be paid on the Treasury’s outstanding senior preferred stock.
Second, there should be retroactive payment of the waived past periodic commitment fees — $8 or $9 billion per year for the GSEs combined.
Third, the GSEs should pay a periodic commitment fee of perhaps, 16 bps or 18 bps levied on the total amount of GSE outstanding assets, regardless of whether they’re in conservatorship.
Fourth, prior to the release of Fannie or Freddie from conservatorship, each would need to meet levels of capital that appropriately reflect the risk of loss, as well the cost of capital allocated to similar assets held by regulated private financial institutions. This would include appropriate too-big-to-fail capital buffers.
Finally, there should be a full recognition of the value of the taxpayer’s warrants, which provide the right to purchase an amount slightly under 80% of each of the GSE’s common stock. The government would be free to sell the common stock, as it deems appropriate, in order to gain the maximum taxpayer value.
Only under these terms would both the taxpayers and investors receive what each has rightly earned.
http://www.aei.org/publication/taxpayers-are-the-gses-true-stockholders/
No you don't hate it. You also don't hate saying it and saying it and...
Look at that. I am also a realist.
Go FnF!
The Polar Express would become an electromagnetic levitating bullet train!
Go FnF!
C. All of the above!
Go FnF!
Think back, maybe way back. Do you remember when you had a sense of humor? Mine keeps me sane. In other words it was a joke.
Go FnF!
Two dollars would be SWEET before en banc!
Go FnF!
You call this a dip? I wait until I get mad and then I buy more
Go FnF!
Thanks Navy! Skeptic was freaking me out again!
Go FnF!
Don't say that dude! You're freaking me out again!
Go FnF!
Good common sense opinions.
I just do not know (considering the scam accounting) what was legal. How many years of litigation does it take to get to the bottom of government corruption? Like the tootsie roll center of a tootsie pop.
The world may never know!
But we might get paid!
Go FnF!
Everybody should have a dream!
Go FnF!
"In the years to come" I think that is feel good language to make folks think that Congress could actually pass reform in our life time. It should read "in the generations to come"
Go FnF!
Urban Institute: Launch of FHFA's single security was "flawless"
Says uniform security lays important groundwork for GSE reform
August 9, 2019 Jessica Guerin
In June, the Federal Housing Finance Agencyannounced that its long-laid plans to launch a single security for loans backed by Fannie Maeand Freddie Mac had finally come to fruition.
Now, mortgage-backed securities for the GSEs are issued under a single security – Uniform MBS – replacing Fannie's MBS and Freddie's Participation Certificates so the two enterprises can trade in the same market.
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The move was one the agency called “momentous,” noting that it will cut costs for American homebuyers.
Now, with two months of UMBS in play, the Urban Institute is praising the successful launch of this “enormous undertaking,” which dramatically transformed a $5 trillion financial market.
“The smooth functioning of this market is critical to U.S. homebuyers’ ability to get a mortgage, so the stakes for the launch of the UMBS were high and the launch had to be flawless. And it was,” researchers Karan Kaul and Laurie Goodman wrote in a recent paper on the topic.
In essence, the single security eliminates the liquidity differences that existed between the two markets, as Freddie’s lagging market reduced profits, ultimately taking money away from taxpayers.
But now, with UMBS in action, the playing field has been leveled, and so far, investor appetite appears to not have wavered.
“Early data on UMBS trading volumes – a key metric of how investors are reacting to the new security – are very encouraging,” the researchers noted. “The average daily trading volume for agency MBS (which includes the UMBS) was higher in June ($267 billion) than it was in April ($250 billion) or May ($232 billion), according to the Securities Industry and Financial Markets Association. There was no decline in MBS pricing attributable to the launch of the UMBS.”
A sizable portion of Freddie Mac securities has also been converted into new securities in preparation for entering UMBS, another promising sign.
“Although we need several months of data for further verification, early data suggest the launch has gone very smoothly,” the researchers stated.
And the success of the UMBS launch, they asserted, is critical because of the important groundwork it lays for future GSE reform.
“By reducing the significant competitive advantage that Fannie enjoyed over Freddie, it also helps open the way to additional competitors over time,” they wrote. “It is still difficult to imagine how a new entrant would overcome the legacy players’ enormous liquidity advantage, but moving to a single security helps ease that barrier.”
While they go on to note that the UMBS doesn’t entirely remove the significant barriers to entry, they do call it a “a meaningful first step” because it aligns the business policies and systems of the players involved, and this will make things easier for new guarantors.
“The creation of the UMBS is an important step forward in the current system,” the researchers concluded. “It not only removes an expensive inefficiency in the current system, but it also lays the groundwork for deeper structural reforms in the years to come.”
https://www.housingwire.com/articles/49820-urban-institute-launch-of-fhfas-single-security-was-flawless
2019 GSE ODYSSEY!
So my original question was did all 4 judges have access to all of the documents that are available now?
Go FnF!
The documents are the evidence
The documents are the evidence
If you please!
Go FnF!
Did all 4 judges have access to all of the documents that are now available? Hmmm??
Go FnF!
Think of it
My plan took longer to post than I took to
CBO Monthly Budget Review for July 2019 Finds the Federal Budget Deficit Continues to Rise - Revenues Increase but Outlays Continue to Rise for Social Security, Medicare and Medicaid
Last Updated: Thursday, 08 August 2019 05:51 Published: Thursday, 08 August 2019 05:51
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August 8, 2019 - The federal budget deficit was $867 billion for the first 10 months of fiscal year 2019, the Congressional Budget Office estimates—$184 billion more than the deficit recorded during ?the same period last year. Revenues were $92 billion higher and outlays were $276 billion higher than in the same period in fiscal year 2018.
However, outlays in the first 10 months of last year were reduced by shifts in the timing of certain payments. If not for those shifts, the deficit for that period would have been $44 billion greater, and the increase in the deficit so far this year would have been $140 billion rather than $184 billion.
Total Receipts: Up by 3 Percent in the First 10 Months of Fiscal Year 2019
Receipts totaled $2,858 billion during the first 10 months of fiscal year 2019, CBO estimates—$92 billion (or 3 percent) more than during the same period last year. That increase was the result of changes in receipts from the following sources:
Individual income and payroll (social insurance) taxes together rose by $78 billion (or 3 percent).
Amounts withheld from workers’ paychecks rose by $51 billion (or 3 percent). That change largely reflects increases in wages and salaries that were partly offset by a decline in the share of income withheld for taxes. The Internal Revenue Service issued new withholding tables in January 2018 to reflect changes made by the 2017 tax act (Public Law 115-97). All employers were required to begin using the new tables by February 15, 2018. Those new withholding rates were in effect during the first 10 months of this fiscal year but for only five and a half months of the same period last year.
Nonwithheld payments of income and payroll taxes rose by $9 billion (or 1 percent).
Income tax refunds were down by $22 billion (or 8 percent), further boosting net receipts.
Unemployment insurance receipts (one kind of payroll tax) declined by $4 billion (or 10 percent).
Corporate income taxes increased by $5 billion (or 3 percent). June was the first month in which receipts consisted mainly of estimated payments for tax year 2019.
Revenues from other sources increased by $9 billion (or 4 percent), mostly as a result of increased collections of customs duties and excise taxes.
Customs duties increased by $24 billion (or 74 percent), primarily because of new tariffs imposed by the Administration during the past year.
Excise taxes increased by $8 billion (or 12 percent), partly because of payments received in October for the tax on health insurance providers. In 2017, that tax was subject to a one-year moratorium that was lifted for 2018 but reimposed for the current fiscal year.
Revenue increases were partially offset by smaller remittances from the Federal Reserve to the Treasury. Remittances declined by $15 billion (or 25 percent), mainly because short-term interest rates have been higher, leading the central bank to pay depository institutions more interest on reserves.
Estate and gift taxes decreased by $5 billion (or 28 percent), reflecting changes made by the 2017 tax act, which doubled the value of the estate tax exemption.
Total Outlays: Up by 8 Percent in the First 10 Months of Fiscal Year 2019
Outlays for the first 10 months of fiscal year 2019 were $3,726 billion, $276 billion more than during the same period last year, CBO estimates. If not for the shift of certain payments last year, that year-to-year increase would be smaller—$232 billion, or 7 percent. The discussion below reflects adjustments to exclude the effects of those timing shifts.
The largest increases were in the following categories:
Outlays for the largest mandatory spending programs increased by 6 percent:
Social Security benefits rose by $46 billion (or 6 percent) because of increases both in the number of beneficiaries and in the average benefit payment.
Medicare outlays increased by $37 billion (or 7 percent), because of increases both in the number of beneficiaries and in the amount and cost of services.
Medicaid outlays rose by $18 billion (or 5 percent).
Outlays for net interest on the public debt increased by $44 billion (or 14 percent) because interest rates on short-term debt were substantially higher during the first 10 months of fiscal year 2019 than they were during the same period in 2018 and because the federal debt is larger than it was a year ago.
Spending for military programs of the Department of Defense rose by $42 billion (or 8 percent), with the largest increases occurring in operation and maintenance, procurement, and research and development.
Outlays for the Department of Education (included in the “Other” category below) rose by $40 billion (or 79 percent), mostly because the department made an upward revision of $28 billion to the estimated net subsidy costs of loans and loan guarantees issued in prior years—a change very different from last year’s $9 billion downward revision. If the effects of those revisions were excluded, outlays for the department for the first 10 months of the fiscal year would have risen by $3 billion (or 5 percent).
Outlays for the Department of Veterans Affairs (also included in “Other”) increased by $13 billion (or 8 percent) because the number of people receiving disability compensation rose and the average benefit payment increased.
Outlays for the refundable portion of the earned income and child tax credits (also included in “Other”) rose by $10 billion (or 13 percent). That increase reflects an expansion of the child tax credit, including the refundable portion, made by the 2017 tax act.
The largest decreases in outlays were in the following categories, included in “Other” below:
Outlays for the Department of Housing and Urban Development decreased by $28 billion (or 57 percent), primarily because the department made a downward revision of $17 billion to the estimated net subsidy costs of loans and loan guarantees issued in prior years—a change very different from last year’s $14 billion upward revision. If the effects of those revisions were excluded, outlays for the department would have been $2 billion higher than they were in 2018.
The Treasury received $16 billion more in payments this year from Fannie Mae and Freddie Mac, resulting in lower net outlays. Those entities’ quarterly payments to the Treasury in December were $4 billion more than they made in the previous December. In March of this year, they remitted about $6 billion to the government, whereas in March 2018 they received net payments of about $3 billion from the Treasury—a difference of $9 billion. Last March was the only time since 2012 that Fannie Mae and Freddie Mac received such payments from the Treasury. In addition, quarterly payments to the Treasury this June were $3 billion more than the payments made last June.
Outlays for the Department of Homeland Security decreased by $11 billion (or 19 percent), primarily because spending for disaster relief was higher than usual at the beginning of last fiscal year.
For other programs and activities, spending increased or decreased by smaller amounts.
Estimated Deficit in July 2019: $120 Billion
The federal government realized a deficit of $120 billion in July 2019, CBO estimates—$43 billion more than the shortfall in July 2018. Outlays in July 2018 were affected by a shift to the previous month of certain federal payments that otherwise would have been due on the first weekend in July. If not for that shift, the deficit in July 2018 would have been $123 billion—$3 billion more than the deficit this July.
CBO estimates that receipts in July 2019 totaled $249 billion—$24 billion (or 11 percent) more than those in the same month last year. An increase in individual income and payroll taxes of $19 billion (or 10 percent) accounts for most of that change, mainly because withheld taxes increased by $18 billion (or 10 percent). Part of that increase occurred because this July had one more business day. In addition, corporate income taxes were up by $3 billion (or 66 percent) and customs duties were up by $2 billion (or 47 percent).
Total spending in July 2019 was $370 billion, CBO estimates—$67 billion more than the sum in July 2018. If not for timing shifts, outlays this July would have been $21 billion (or 6 percent) more than they were in the same month last year. (The changes discussed below reflect adjustments to remove the effects of those shifts.)
According to CBO’s estimates, the largest changes in outlays were as follows:
Social Security and Medicaid outlays rose by $5 billion and $4 billion, respectively.
Spending for Medicare decreased by $6 billion (or 11 percent).
Spending for military programs of the Department of Defense rose by $4 billion (or 9 percent).
Spending for other programs and activities increased or decreased by smaller amounts.
Actual Deficit in June 2019: $8 Billion
The Treasury Department reported a deficit of $8 billion for June—the same as CBO estimated last month, on the basis of the Daily Treasury Statements, in the Monthly Budget Review for June 2019.
https://goldrushcam.com/sierrasuntimes/index.php/news/local-news/19683-cbo-monthly-budget-review-for-july-2019-finds-the-federal-budget-deficit-continues-to-rise-revenues-increase-but-outlays-continue-to-rise-for-social-security-medicare-and-medicaid
It's cool.
Go FnF!