WASHINGTON Feb 10 The Obama administration's
borrowing plans for this week suggest it is trying to soften the
blow to public finances from congressional gridlock over raising
the cap on government debt.
The Treasury Department said on Monday it aims to borrow
just $8 billion this week in bills that must be repaid in one
month. That's the same amount of one-month debt taken on last
week, which was the lowest level in almost six years.
The tiny bill auctions mean Washington is holding down the
amount of debt it will have to repay in the first half of March,
which is when analysts think the U.S. government could start
missing payments on its many obligations if lawmakers don't lift
the debt cap.
Investors already are showing their concern by charging a
premium for making loans to the government that will come due in
early March. Borrowing less money that must be repaid in that
period could save U.S. taxpayers some money.
The small one-month auction contrasts sharply with the
ramping up this week of new debts that come due over longer
horizons. The Treasury, for example, is increasing issuance of
six-month bills to $42 billion from $20 billion last week.
"The only reason to keep (the one-month bill) low when
everything else is going back up is because you don't want to
sell something the Street doesn't want," said Lou Crandall, an
economist at Wrightson ICAP in New York.
The size of the one-month debt sales also means the
government will have to borrow relatively less money in early
March to cover bills coming due, reducing its so-called
roll-over risk during those weeks.
When contacted, the Treasury Department had no immediate
Last week, the Treasury said it would pay dealers and
investors 0.13 percent on one-month bills due March 6, the
highest interest rate it paid on one-month bills at an auction
since Oct. 16.
The one-month bills announced on Monday will come due on
March 13. The interest rate on that debt will be determined at
an auction on Tuesday.