U.S. Raises Estimate for Oct.-Dec. Net Borrowing to $344 Billion

  • Treasury sees cash balance at $325 billion on Dec. 31
  • Treasury plans to sell a net $165 billion of debt next quarter

The U.S. government plans to borrow 27 percent more than previously expected this quarter to boost a cash balance that was depleted during the debt-ceiling standoff between Congress and the White House.

The Treasury Department on Monday said it will issue $344 billion in net marketable debt in the October-December quarter, compared with $270 billion estimated three months ago, according to a statement released in Washington. It plans an end-of-December cash balance of $325 billion, more than the $275 billion projected in August.

The Treasury will raise a large portion of new cash through increased issuance of bills, a department official told reporters.

U.S. cash reserves shrank last month as the Treasury was forced to lower bill issuance to stay under the borrowing limit. The rainy day fund, held in case of a market disruption such as a hurricane or a cyber attack, shrank below $30 billion on Oct. 29, from $274 billion at the end of April.

President Barack Obama earlier Monday signed into law a measure that suspends the debt ceiling until March 2017.

Net borrowing is estimated to be $165 billion from January through March, with a $260 billion cash balance on March 31.

The Treasury said it issued net marketable debt of $133 billion in the three months through September, $6 billion more than the August projection.

The estimates precede the department’s quarterly refunding announcement on Nov. 4, when the sizes of note and bond sales are released.