U.S. Treasury again increases auctions of 30-year bonds

From News.xinhuanet.com

The U.S. Treasury Department announced on Wednesday that the number of times it auctions 30-year bonds will be increased to 12 times a year in an effort to deal with the government's soaring debt.

This was the second time this year the Treasury decided to boost the number of auction times of 30-year bonds. Just three months ago, it doubled the frequency of the auctions from four times annually to eight.

At the same time, the Treasury said it will raise 71.0 billion dollars in a series of auctions next week to refund approximately 52.2 billion dollars of privately held securities maturing or called on May 15, 2009 and to raise approximately 18.8 billion dollars.

The upcoming refunding will include auctions of three-year and 10-year notes and the 30-year bonds, according to a statement by the Treasury.

The 71 billion dollars will be part of the government's total borrowing needs for the April-June quarter. The government will have to borrow 361 billion dollars in the second quarter, a record amount for the April-June period, the Treasury estimated on Monday.

It is the third consecutive quarter the government's borrowing needs have set records for those periods.

And the estimate for borrowing this current quarter was much larger than borrowing needs of just 13 billion dollars in the year-ago period.

During the July-September quarter, the government will need to borrow 515 billion dollars, down slightly from the year-earlier level of 530 billion dollars, the Treasury also estimated.

The government borrowed 481 billion dollars in the first quarter of this year.

The huge borrowing needs reflect the soaring costs of the government's economic stimulus package and financial rescue program, and the recession, which has resulted in a sharp decline in tax revenue.

The recession, which started in December 2007, also has boosted government spending for benefit programs such as unemployment insurance and food stamps.

The Obama administration is projecting the federal budget deficit to rise to 1.75 trillion dollars in fiscal year 2009, which ends on Sept. 30, 2009, from the previous record of 454.8 billion dollars set in fiscal year 2008.

To cover the government's borrowing needs, U.S. Congress boosted the limit for the national debt to 12.1 trillion dollars in February this year. The national debt now stands at 11.1 trillion dollars.