Treasury Department's borrowing plans assume debt-limit deal

Friday, July 30, 2021, Vol. 45, No. 31

WASHINGTON (AP) — The Treasury Department has unveiled plans to borrow $673 billion in the current quarter while employing emergency measures to keep the government from an unprecedented default on the national debt.

The department said Monday that its plans for borrowing in the July-September period assume Congress will pass either a suspension of the current debt limit or an increase in the limit.

The debt limit had been suspended for two years. That allowed the government to borrow as much as needed to pay bills and service the outstanding debt. But under legislation passed two years ago, the limit has gone back into effect at the level where the debt stood on Sunday — $28.4 trillion.

Treasury Secretary Janet Yellen has said a failure to increase the debt limit would be catastrophic. She has begun taking emergency measures to keep the government from breaching the limit but those measures are expected to only last until this fall.

The $673 billion that the government plans to borrow this quarter is down from an estimate of $821 billion it made for the quarter back on May 3. The government borrowed $319 billion in the April-June quarter.

The Treasury Department said it plans to borrow $703 billion in the October-December quarter, assuming that Congress has passed a new debt limit or suspension in coming weeks.