U.S. Treasury expects debt limit to be hit by yearend

PanARMENIAN.Net - U.S. Treasury officials said Wednesday, Oct 31, that they still expect the government will hit the current debt borrowing limit at the end of this year. But they said they can employ "extraordinary" measures that have been used in the past to keep the government functioning until sometime early next year, The Associated Press reports.

Treasury Assistant Secretary Matthew Rutherford said that Treasury would employ the same types of procedures it has used previously to keep borrowing under the current debt limit of $16.39 trillion until Congress votes to increase the debt ceiling. The nation's debt currently stands $16.16 trillion.

"We continue to expect that these extraordinary measures would provide sufficient headroom under the debt limit to allow the government to continue to meet its obligations until early in 2013," Rutherford said.

Treasury said at the auctions next week it would sell $32 billion in three-year notes, $24 billion in 10-year notes and $16 billion in 30-year bonds.

The debt auctions will be part of an effort to raise $288 billion during the October-December quarter. That compares to $264 billion in net borrowing that Treasury did during the July-September quarter. Treasury says it expects to borrow $342 billion during the January-March quarter of next year.

These sizable levels of borrowing are being required because the government is running record deficits. For the 2012 budget year, the deficit totaled $1.09 trillion, the fourth consecutive year that the deficit has been over $1 trillion.