The Treasury Department said today it expects to hit the government's debt ceiling by the end of February, putting pressure on Congress to raise the limit from its current level of $12.4 trillion. Treasury said it is working closely with Congress to raise the ceiling. The Senate has approved legislation to increase it by $1.9 trillion to $14.3 trillion, but the House has yet to pass the measure. A ceiling that high would equal about $45,000 for every American.
Congress approved a smaller increase of $290 billion in late December, allowing the government to borrow for about two more months.
The announcement comes after the Obama administration on Monday released a budget that projects this year's deficit will reach $1.56 trillion, an all-time high. That's equivalent to 10.6 percent of the economy, the highest proportion since World War II. The deficit is projected to decline to $1.27 trillion in the 2011 budget year and $828 billion in 2012.
Despite the record deficits, the department also said today it no longer needs to increase the size of the debt auctions it uses to fund the gap. Treasury has increased its auctions of bonds, bills and other marketable securities for two years to fund the increasing flow of red ink. A Treasury official said that current auction amounts should be able to meet this year's borrowing needs.
The Treasury also announced that it will raise $81 billion in its quarterly refunding operation next week. That ties a record set last quarter for the largest quarterly auction. The department will auction $40 billion of three-year notes on Tuesday, $25 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday.
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