WASHINGTON, D.C. — The Treasury Department said Monday it will need to borrow $362 billion in the current October-December quarter, the second largest borrowing on record for this period.
Treasury officials said the borrowing needed for this quarter is down by $17 billion from an estimate made a month ago. That is in part because the government ended the 2010 budget year on Sept. 30 with $40 billion more cash on hand than it had expected.
The $362 billion in borrowing for this quarter is second only to the $569 billion borrowed in the October-December quarter of 2008. During that time, the government was raising massive amounts of money to fund a $700 billion bailout of the financial system.
The federal deficit for 2010 totaled $1. 3 trillion, second highest in history but down from the all-time record of $1.4 trillion set in 2009.
Last year, the government had to borrow 37 cents out of every dollar it spent as tax revenues continued to lag while spending on food stamps and unemployment benefits went up as the economy continued to struggle even though the recession was ruled to be officially over in June of 2009.
The Obama administration in the budget update in July projected that the deficit for the current 2011 budget year will total $1.42 trillion. However, private economists believe it will be lower than that total.
Treasury officials said that the latest forecast for the deficit made by the major securities firms that serve as primary dealers for the government’s debt auctions are forecasting that the deficit for 2011 will drop to $1.21 trillion and then decline further to $1.02 trillion in 2012 and $906 billion in 2013.
The 2012 and 2013 deficit forecasts from the bond dealers is higher than the administration’s projections for deficits of $911 billion in 2012 and $736 billion in 2013.