Treasury Plans to Borrow $1T During Quarter, But Only if Congress Deals With Debt Ceiling

The United States Treasury Department said Monday that it plans to borrow $1.02 trillion during the current quarter, and plans on more to follow, depending on if Congress raises the national debt ceiling for the country.

The actual borrowing will depend on Congress and the current debt limit situation. If Congress decided to raise or suspend the limit, then money could be borrowed.

Treasury Secretary Jenet Yellen has said that the $480 billion increase in the country's debt limit passed by Congress in October will only allow the government to keep its bills through the beginning of December, being only a temporary fix suspending payments.

Yellen said the increase in the debt limit "provides only a temporary reprieve," in a letter to congressional leaders in mid-October.

The new $1.02 trillion package is the largest amount borrowed since the government began passing trillion-dollar rescue packages for the country's economy in spring 2020.

Treasury officials said they expect to borrow more down the road, and another $476 billion in next year's January through March quarter.

For more reporting from the Associated Press, see below:

Janet Yellen
The United States Treasury Department said Monday that it plans to borrow $1.02 trillion during the current quarter, and plans on more to follow, depending on if Congress raises the national debt ceiling for the country. Treasury Secretary Janet Yellen speaks during a meeting with President Joe Biden and business leaders about the debt limit in the South Court Auditorium on the White House campus, October 6, in Washington. Evan Vucci/Associated Press

Treasury said the borrowing estimate for the October-December quarter would follow $103 billion in actual borrowing in the July-September quarter, a period when the debt limit went back into effect after being suspended for two years.

The $1.02 trillion in borrowing for the current quarter is the largest borrowing amount since the government borrowed $2.75 trillion in March 2020 after the COVID pandemic shut down the economy and pushed millions of people out of work. Congress began passing trillion-dollar-plus rescue packages to cushion the economic blow from the shutdowns.

Treasury officials said the borrowing plans they laid out Monday were contingent on Congress dealing with the debt limit before Yellen runs out of maneuvering room to use extraordinary measures to avoid defaulting on the nation's debt. Yellen has warned that a debt default would be catastrophic and would likely push the country into a recession.

The current borrowing limit stands at $28.88 trillion after the $480 billion increase approved by Congress last month. The debt subject to that limit is currently $25 million below the limit. But Yellen can use a variety of bookkeeping maneuvers to remove investments from various government employee pension funds to allow for further borrowing for a limited period of time.

When the debt limit impasse is resolved, Treasury is required to replace any investments removed from the pension funds with any lost interest.