Reuters
U.S. Expects to Borrow $177 Bln in Q1
Monday February 2, 4:36 pm ET
By Jonathan Nicholson
WASHINGTON (Reuters) - Coming off of a record borrowing binge in the final three months of 2003, the U.S. Treasury Department (News - Websites) on Monday said it expects to borrow even more money from capital markets in the current quarter.
In its quarterly borrowing estimate, the Treasury said it borrowed a slightly smaller-than-expected $113 billion in the October-December quarter. However, that was still above the previous record $111 billion the Treasury borrowed from private investors in the January-March quarter of 2003.
The Treasury is forced to sell debt to finance the government budget deficit, which is expected to set a record at $521 billion in the 2004 budget year, which began Oct. 1. That follows a record-setting $374 billion gap in 2003.
The deficit is shaping up to be a campaign issue for President Bush as he seeks another term in the White House. After the 2000 election Bush pledged to pay off most of the national debt, but he has been forced to wrestle with surging budget deficits. Democrats say the deficits show Bush's tax cuts were unaffordable, while the administration says the gaps are the result of a sluggish economy and needed spending on the military and homeland security.
In November, Treasury had thought it would borrow slightly more in the final quarter of 2003, about $117 billion. It said the difference was made up mostly by lower spending.
For the current January-March quarter, the Treasury estimated it will borrow $177 billion, up from a projection of $160 billion made in November.
"The increase in borrowing is due to lower receipts, primarily from an increase in tax refunds, and higher outlays," Treasury said.
According to the Treasury's Office of Tax Analysis, the biggest kick from the accelerated individual income tax cuts enacted last year will actually come early this year, as taxpayers get their refunds. The tax cuts are expected to reduce cash flow to the U.S. Treasury by $39.3 billion in the January-March period and $60.5 billion in the April-June quarter. |
