Treasury needs to borrow $493B in current quarter

From AP:

The Treasury Department said Monday it will need to borrow $493 billion in the first three months of this year, a record amount for the January-March period.

The Treasury Department figure comes on top of $569 billion the government borrowed from October through December, the all-time high for any quarter.

The huge amounts of borrowing in the first six months of the budget year reflect the impact of soaring costs to cover the $700 billion financial rescue program and a deepening recession that has cut into tax revenues.

The department estimated that its borrowing needs will drop to $165 billion in the April-June quarter, a period when the government's coffers swell from people paying their income taxes.

Treasury's estimates include the cost of funding the $700 billion financial bailout program that Congress passed on Oct. 3, but do not include the cost of President Barack Obama's more than $800 billion economic stimulus plan.

For the budget year that began Oct. 1, the Treasury's borrowing needs are expected to reach an all-time high, reflecting a budget deficit projected to hit a record above $1 trillion. That will far exceed the current all-time, a deficit of $454.8 billion in the budget year that ended Sept. 30.

The nonpartisan Congressional Budget Office has estimated this year's deficit will hit $1.19 trillion, a figure that does not include the cost of Obama's stimulus package. The price tag of the stimulus package approved by the House last week was $819 billion in tax cuts and increased government spending over two years. The Senate took up a $900 billion version on Monday.

Obama made a fresh appeal to Congress to quickly pass the proposal, saying Monday that "very modest differences" should not delay its swift passage because fresh money is needed to combat what is already the longest recession in a quarter-century.

Treasury's latest report on its borrowing needs included a new estimate from Wall Street bond dealers who projected that the total deficit for 2009 will hit $1.63 trillion.

Besides the cost of Obama's stimulus package, the administration also is considering boosting the $700 billion financial rescue package in the belief that the remaining $350 billion in the program will not be enough to stabilize the banking system, which is still reeling from billions of dollars of losses in mortgages and other bad loans.