WASHINGTON — The Treasury Department said today that it plans to borrow $78 billion in a series of three debt auctions next week, down from a record $81 billion at the last quarterly auction.
It marked the first reduction in the size of the auctions since 2007 and reflected the fact that the government is projecting that total borrowing will fall by 18.3 percent for this budget year after setting an all-time high last year.
The Obama administration has stressed that while the U.S. budget deficit soared to a record high of $1.4 trillion last year, the United States, unlike Greece, has not had trouble financing its huge deficits.
The auctions were part of Treasury’s regular quarterly refunding where it raises a large part of the debt it needs to finance the gap between what the government collects in tax revenues and what it spends each year.
For the refunding next week, Treasury said it would auction $38 billion in three-year notes on Tuesday, $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday.
The size of the three-year note is being cut by $2 billion from the last refunding auction in February and the 10-year note is being cut by $1 billion.
Before this auction, the last time the government was able to reduce the size of one of its debt offerings was May 2007 when it cut the three-year note sale to $14 billion from $16 billion.
Even with next week’s reduction, the government’s three-year note offering will be more than double its size three years ago, underscoring the surge in Treasury securities that has occurred as the government has had to auction ever larger amounts to cover soaring budget deficits.
On Monday, the Treasury announced that it believed total borrowing for this year would dip to $1.459 trillion, down by 18.3 percent from the record borrowing of $1.786 trillion set in the 2009 budget year.
The Obama administration has not changed its February forecast that the deficit for this budget year will hit $1.56 trillion, surpassing last year’s imbalance, although some private forecasters have trimmed their own estimates and believe this year’s deficit will come in around last year’s $1.4 trillion mark.
The deficit explosion reflects the impact of a deep recession, which cut individual income taxes and corporate taxes, and boosted spending as the government created a $700 billion financial bailout fund and passed in February 2009 a $787 billion economic stimulus measure.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
