WASHINGTON The Bush administration gave details Wednesday on how it plans to borrow the billions of dollars it will need to cope with the soaring budget deficits.
Those plans include raising $27 billion by selling a new 10-year note and a new 30-year bond at the regularly scheduled quarterly auctions to be held next week. The government needs to borrow $171 billion during the current July-September quarter, the second highest quarterly borrowing total on record.
The increased borrowing needs reflect the exploding federal budget deficit which is projected to more than double in size this year and to hit an all-time high of $482 billion in the 2009 budget year.
The administration released the new deficit forecasts on Monday. It blamed the surge on the sagging economy and the effort to keep the country from falling into a deep recession by mailing out 130 million economic stimulus payments.
Democratic critics charged that the soaring deficits showed the total failure of the Bush administration to put the government's fiscal house in order, however. They contended that whoever wins the presidency in November will inherit a huge fiscal mess that will severely restrain the next president's ability to fulfill his own campaign promises.
The administration projected that the deficit for this budget year, which ends on Sept. 30, will total $389 billion, more than double the $161.5 billion deficit for 2007. For the 2009 budget year, which will cover the first year of the new president, the administration is forecasting a deficit that will surge to an all-time high in dollar terms of $482 billion, far exceeding the old record of $413 billion set in 2004.
That deficit estimate could soar even higher. It does not include the expected full cost of funding the wars in Iraq and Afghanistan or the costs associated with a massive housing rescue measure that Congress passed last week and President Bush signed into law on Wednesday.
As part of the housing measure, Congress voted to increase the national debt limit by $800 billion from $9.815 trillion to a new limit of $10.615 trillion.
The borrowing plans announced by the Treasury Department on Wednesday include raising $17 billion by selling a new 10-year note on Aug. 6 and raising $10 billion by selling a new 30-year bond on Aug. 7.