The Bush administration, moving to cope with soaring budget deficits, says it is bringing back the one-year Treasury bill that it stopped issuing seven years ago when the budget was in surplus.
The administration said Wednesday it would begin selling the one-year bill, also referred to as a 52-week bill, at an initial auction in June. New one-year securities will be auctioned every four weeks.
The government is looking for various ways to borrow the billions of dollars in extra cash it will need to cover a budget deficit that is expected to jump to an all-time high this year, surpassing the old mark of $413 billion set in 2004.
A big part of the increased borrowing reflects the need to pay for economic-stimulus rebates to 130 million households. The government began disbursing the payments on Monday in an effort to give the economy a jump start.
The government stopped issuing the one-year securities in February 2001, a year when the government recorded a surplus of $127 billion. That was the fourth consecutive surplus but was also the last time the government's books were in the black. The budget was pushed back into the red by a recession, increased spending to fight wars in Afghanistan and Iraq and, Democrats contend, by President Bush's first-term tax cuts.
The return of the one-year security was announced as officials reported the government's borrowing needs for the current quarter, which will include separate auctions next week to raise $15 billion with the sale of 10-year Treasury notes and $6 billion in the sale of 30-year Treasury bonds.
"Over the last several months, changes in economic conditions, financial markets and monetary and fiscal policy have impacted Treasury's marketable borrowing needs," said Anthony Ryan, Treasury's assistant secretary for financial markets. "Financial market strains have impacted the real economy and the nation has experienced lower economic growth, lower receipts and increased outlays."
