The Treasury official said that revenues in the year-to-date period were constrained by a $90 billion increase in tax refunds due largely to the Internal Revenue Service's work in reducing its backlog of unprocessed returns that had piled up during the COVID-19 pandemic.
But the official declined to comment on the outlook for current and future revenues, including whether higher refund levels would continue.
The strength of revenues in May will be key in determining whether the Treasury will begin to miss some U.S. payment obligations without an increase in the $31.4 trillion statutory debt limit as early as June 1, or later in the summer, budget analysts say.
Treasury Secretary Janet Yellen has said the day of reckoning could be a number of weeks later, depending on receipts and outlays.
FDIC COSTS
The Treasury reported a $925 billion deficit for the first seven months of the 2023 fiscal year, a 157% increase from the $360 billion deficit a year earlier. Year-to-date receipts totaled $2.687 trillion, down 10% from the record $2.986 trillion in the year-ago periods. Outlays for the first seven months totaled $3.611 trillion, up 8% from the $3.346 trillion in the prior-year period. The Treasury official said that year-to-date outlays included $41 billion in Federal Deposit Insurance Corp costs related to the failures of Silicon Valley Bank and Signature Bank in March.
While costs associated with making uninsured depositors
whole are paid from the Deposit Insurance Fund supported by bank
assessments, for accounting purposes they count as Treasury
outlays. But the FDIC payouts would allow for an additional $41
billion in borrowing capacity under the debt limit to replenish
the cash paid out, the official added.
(Reporting by David Lawder; Editing by Andrea Ricci and Deepa
Babington)
