Treasury to pay down debt for first time since Obama took office
By Peter Schroeder - 04/29/13 03:20 PM ET
The Treasury Department announced Monday that it would reduce its level of debt in financial markets for the first time since President Obama took office.
The department said it expects to pay down a net of $35 billion in its marketable debt for the second quarter of 2013, the first time it has done so since 2007.
In February, Treasury had estimated the government would have to borrow $103 billion during the second quarter, and would end up with a cash balance of only $30 billion.
But thanks to unexpectedly higher receipts of government revenue and lower outlays in spending, the Treasury is experiencing a swing in fortune that allows officials to actually pay down some of its outstanding debt.
Treasury now expects to have a cash balance of $75 billion in June after paying down the $35 billion in debt.
Treasury also updated its borrowing projections for the third quarter of the year. The Treasury now anticipates it will borrow $223 billion from July to September, and will end that quarter with a cash balance of $80 billion.
The rosier projections come as experts are also projecting that Washington may have more time to haggle over fiscal policy before the government reaches its $16.4 trillion borrowing limit.
The Bipartisan Policy Center announced Friday that its latest projections show the government might not need to raise the debt limit until mid-October.
In January, experts with the group estimated the borrowing limit would need to be raised sometime in August, but updated information about the nation's finances has pushed that window back, the group said.