WASHINGTON – The Treasury Department announced Monday it plans to take on $441 billion in debt in the January-March quarter, the largest amount in eight years.
It will be the largest indebtedness from the 483,000 million dollars of the January-March 2010 quarter, when the government used the spending as a stimulus measure to try to get the country out of the Great Recession and to support the banking system after the worst financial crisis in seven decades.
The government’s debt needs have increased due to the increase in the federal budget deficit.
The fiscal year of 2017 deficit, which ended last September, reached 665,800 million dollars.
Experts from the private sector estimate that this year’s deficit will amount to some 765,000 million dollars, and some predict that by next year it could again reach trillion dollars.
Both projections reflect the increase in Social Security and Medicare costs due to the retirement of the “post-war generation,” as well as the tax cuts that President Donald Trump promoted in Congress last month, a package that will raise the deficit by 1.5 trillion dollars over a decade.
In order to face the increasing debt needs, the Treasury Department has asked Congress to raise the debt limit, currently set at 20.5 billion dollars. The Secretary of the Treasury, Steve Mnuchin, will be left without room to maneuver, he must resort to various accounting moves in order to maintain the debt at the current limit in early March.
The Treasury will release on Wednesday specific details of the type of securities it plans to sell this quarter to cover its borrowing needs.