The Treasury department auctioned off another $56 billion in new debt Tuesday and Wednesday, which is enough to put the US over the federal debt ceiling. The Obama administration has been asking Congress to raise the debt ceiling to avoid a government default.
May 12, 2011 | 3:04PM
By Jeffrey Sparshott and Jeff Bater, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The Treasury Department auctioned $56 billion in new debt Tuesday and Wednesday, enough to take the U.S. over its federal debt ceiling when the three- and 10-year notes settle on Monday.
Treasury officials last month flagged May 16 as the day the government would hit the $14.294 trillion debt limit.
The U.S. is selling $72 billion in new debt over three days this week. The Treasury auctioned $32 billion in three-year notes Tuesday and $24 billion in 10-year notes Wednesday, and will sell $16 billion in 30-year bonds Thursday. All of the auctions will settle Monday.
As of Tuesday, total debt subject to the limit was $14.274 trillion, according to the Treasury Department.
The Obama administration has asked Congress to raise the limit, warning that failure to act could lead the government to default by Aug. 2--and could spook investors even before then.
House Speaker John Boehner (R., Ohio) said Monday that any increase in the government's debt limit should be accompanied by trillions of dollars in spending cuts.
"It's true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process," he said.
The federal budget deficit widened in April, with the government spending $ 40.49 billion more than it collected last month, a Treasury Department report said Wednesday.
The deficit was the 31st monthly shortfall in a row. With seven months of fiscal 2011 elapsed, the government has spent $869.90 billion more than it has collected.
Even the most aggressive plans wouldn't wipe out budget deficits for years, meaning that debt will continue to mount.
-By Jeffrey Sparshott, Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@ dowjones.com
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