The Treasury Department said Wednesday it will boost the number of times it auctions 30-year bonds to 12 times a year in another move to cope with the government’s soaring debt.
The monthly auctions of 30-year bonds follows Treasury’s decision just three months ago to double the frequency of the auctions from four times annually to eight.
Treasury also announced it will raise a record $71 billion in a series of auctions next week. The upcoming quarterly refunding will include auctions of three-year and 10-year notes and the 30-year bond.
The $71 billion in refunding auctions surpasses the record of $67 billion set just a quarter ago. It is part of total borrowing needs for the April-June quarter that the government estimates will hit $361 billion, a record for that period.
The huge amounts of borrowing reflect the government’s soaring budget deficits, which are being driven by the costs of financing the $700 billion financial rescue program and the impact of a recession that is nearing a record as the longest in the post World War II period.
The economic slump has cut sharply into tax revenue and boosted government spending for benefit programs such as unemployment insurance and food stamps.
The administration is projecting the federal deficit for the entire budget year ending Sept. 30 will total an all-time high of $1.75 trillion, nearly four-times the size of the previous record of $454.8 billion set last year.
Treasury officials said Wednesday the government will hit the current debt limit of $12.1 trillion sometime in the second half of this year. It was just two months ago that Congress boosted the debt ceiling from $11.1 trillion as part of the legislation that enacted President Barack Obama’s $787 billion economic stimulus program.
The $361 billion in borrowing needs for the current quarter compared with borrowing of just $13 billion in the same period a year ago. Normally the government’s borrowing needs shrink in the spring quarter because of all the tax revenue being collected.
Three months ago, the Treasury also announced it was bringing back the seven-year note.
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