Treasury increases quarterly borrowing estimate

The Treasury Department on Monday said it is expects to borrow billions more this quarter than it had previously estimated.
 
The government expects to issue $266 billion in debt in the October to December period, an increase of $32 billion than the amount anticipated in July.
 
The increase is due to Treasury seeking a higher cash balance at the end of December and to the fact that it has once again started issuing state and local government securities, an activity suspended in the lead-up to the October debt ceiling crisis. 
 
Treasury is now seeking a $140 billion cash balance in December instead of $80 billion. 
 
The reason for the change is due to the timing of debt rollovers. 
 
Under the debt ceiling deal, which raised the $16.7 trillion debt limit through Feb. 7, Treasury cannot legally stockpile cash in anticipation of another debt ceiling standoff.
 
For the following quarter, the government expects to borrow $265 billion, assuming the debt ceiling is raised.
 
The department reported lower borrowing during the quarter that ended in September due in part to lower spending. The department borrowed $197 billion rather than the $209 billion it had anticipated. 
 
On Monday, Deputy Assistant Treasury Secretary Seth Carpenter told bankers that there has been a “notable improvement in the government’s fiscal position.”
 
“The federal deficit as a percent of GDP is now less than half what it was in 2009,” he told the Securities Industry and Financial Markets Association (SIFMA). 
 
He called on Congress to come to a budget deal for the next year that fosters growth and stability, avoids another government shutdown and raises the debt ceiling. 
 
“While the economy is poised for stronger growth over the coming year, the political process poses some risk,” he said. “The Administration remains committed to reaching a budget agreement that supports near-term growth and jobs while maintaining fiscal discipline.”
 
A formal House-Senate budget conference committee convened last week in the hope of reaching a deal by Dec. 13. Its next meeting is Nov. 13. 
 

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