WASHINGTON (AP) — The Treasury Department said Monday it plans to borrow $1.02 trillion during the current quarter, the largest amount since the government began passing trillion-dollar rescue packages for the economy in the spring of 2020.
Treasury said the borrowing estimate for the October-December quarter would follow $103 billion in actual borrowing in the July-September quarter, a period when the debt limit went back into effect after being suspended for two years.
Treasury officials said they expect to borrow another $476 billion in next year's January-March quarter.
The $1.02 trillion in borrowing for the current quarter is the largest borrowing amount since the government borrowed $2.75 trillion in March 2020 after the COVID pandemic shut down the economy and pushed millions of people out of work. Congress began passing trillion-dollar-plus rescue packages to cushion the economic blow from the shutdowns.
Actual borrowing, however, will depend on whether Congress deals with the need to raise or suspend the debt limit. Treasury Secretary Janet Yellen has said that the $480 billion increase in the debt limit passed by Congress in October will only allow the government to keep paying its bills through Dec. 3.
Yellen, in a letter to congressional leaders in mid-October, said the increase in the debt limit “provides only a temporary reprieve.”
Treasury officials said the borrowing plans they laid out Monday were contingent on Congress dealing with the debt limit before Yellen runs out of maneuvering room to use extraordinary measures to avoid defaulting on the nation's debt. Yellen has warned that a debt default would be catastrophic and would likely push the country into a recession.
The current borrowing limit stands at $28.88 trillion after the $480 billion increase approved by Congress last month. The debt subject to that limit is currently $25 million below the limit. But Yellen can use a variety of bookkeeping maneuvers to remove investments from various government employee pension funds to allow for further borrowing for a limited period of time.
When the debt limit impasse is resolved, Treasury is required to replace any investments removed from the pension funds with any lost interest.