Bloomberg "Anywhere" Remote Login Bloomberg "Terminal" Request a Demo


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Treasury Lowers Borrowing Estimate on Higher Cash Balance

Feb. 4 (Bloomberg) -- The U.S. Treasury Department lowered its net borrowing estimate for the current quarter by $11 billion, reflecting a higher cash balance early in the year.

The Treasury decreased its projected borrowing needs for January through March to $331 billion, the department said in a statement today in Washington. Officials see net borrowing of $103 billion in the quarter starting April 1. In the three-month period that ended Dec. 31, the Treasury borrowed $297 billion. The estimates set the stage for the department’s quarterly refunding announcement on Feb. 6

“The decrease in borrowing relates to the higher beginning-of-quarter cash balance partially offset by higher outlays and lower receipts,” the Treasury said of the current quarter.

The previous estimate was made in October when the department assumed an end-of-2012 cash balance of $60 billion, which the department said today was “driven primarily by higher receipts and lower outlays.” The Treasury said its forecasts assume a cash balance of $30 billion for the end of the current quarter.

Cash Balances

“Part of the higher cash balances were the result of taxes paid on income pulled forward into 2012 in order to avoid potentially higher tax rates resulting from fiscal cliff negotiations,” Thomas Simons, a government debt economist at Jefferies Group Inc. in New York said. “The first of the year is especially difficult to forecast due to the uncertainty surrounding the timing of tax refund payments and income tax receipts.”

The economy in the U.S. unexpectedly came to a standstill in the fourth quarter as the biggest plunge in defense spending in 40 years swamped gains for consumers and businesses.

Gross domestic product dropped at a 0.1 percent annual rate, weaker than any economist forecast in a Bloomberg survey and the worst performance since the second quarter of 2009, when the world’s largest economy was still in the recession, Commerce Department figures showed Jan. 30 in Washington.

The Treasury said today its forecasts assume a cash balance of $60 billion at the end of the April-to-June period.

Debt Limit

The Senate voted Jan. 31 to send legislation suspending the U.S. debt limit for three months to President Barack Obama, temporarily removing the risk of a government default from fiscal negotiations.

The measure, crafted by House Republicans, will lift the government’s $16.4 trillion borrowing limit until May 19. President Obama signed the legislation today, the White House said.

The Treasury Department had previously said it expected to run out of emergency measures to prevent a breach of the debt limit between the middle of this month and early March.

The debt limit has been periodically raised since its creation in 1917, when Congress and President Woodrow Wilson authorized the Treasury to issue long-term securities to help finance entry into World War I.

Before this month’s vote, Congress raised or revised the limit 79 times since 1960, including 49 times under Republican presidents, according to the Treasury Department.

The last time Congress fought over raising the ceiling, Obama signed an increase on Aug. 2, 2011, the day that Treasury warned U.S. borrowing authority would expire. Standard & Poor’s cut the nation’s credit rating.

Still, U.S. Treasury bond investors -- who most directly bear the risk of any government default -- haven’t shown alarm over political fights ultimately resolved in Washington. Yields on 10-year U.S. Treasury notes declined to 2.56 percent on Aug. 5, 2011, the day of the S&P downgrade, and continued to fall.

Yields on 10-year Treasuries, a benchmark for everything from mortgages to corporate borrowing costs, are down from more than 5 percent in 2007, before the financial crisis of 2008. The 10-year yield fell today to 1.96 percent from 2.01 percent on Feb. 1.

While the debt limit has been temporarily suspended, $1.2 trillion in automatic spending cuts are set to take effect March 1.

To contact the reporter on this story: Meera Louis in Washington at;

To contact the editor responsible for this story: Christopher Wellisz at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.