Reply #4: Treasury says scaling back borrowing capacity

[ozymandius]

WASHINGTON – The Treasury Department said Wednesday that it has scaled back its annual borrowing capacity by $232 billion since April and plans further gradual cuts in coming months.

The cuts are coming after a massive expansion of the government's borrowing over the past two years as the annual federal deficit hit $1.41 trillion last year and is forecast to hit a record of $1.47 trillion this year.

Treasury officials said that the reductions in borrowing capacity can be achieved because the improving economy is boosting tax receipts and many of the emergency programs enacted to deal with the deep recession and financial crisis are being phased out.

The flood of borrowing forced Congress earlier this year to boost the limit on how much Treasury could borrow to $14.29 trillion. The current amount of debt subject to the limit stands at $13.2 trillion. Miller said that Treasury expects the current debt limit to be hit sometime in the first half of next year, which will require Congress to vote to raise the limit to allow the government to keep paying its bills.

http://news.yahoo.com/s/ap/20100804/ap_on_bi_go_ec_fi/us_treasury_borrowing