Nov. 3 (Bloomberg) — The U.S. Treasury more than tripled its planned debt sales for this quarter to help finance a 2009 budget deficit that bond dealers advising the department estimate may swell to almost $1 trillion.
Borrowing needs are expected to rise to $550 billion in the three months to Dec. 31, compared with the $142 billion predicted in July, the Treasury said in a statement in Washington. That follows a $530 billion record in the July-September quarter.
The worsening credit crisis and sluggish economy are straining the country’s finances and will leave the winner of tomorrow’s U.S. presidential election facing the worst budget shortfall on record next year. The Treasury is scheduled to announce in two days plans to expand debt sales to fund the gap.
“The U.S. Treasury faces an unprecedented financing need,” said Goldman Sachs analyst Ed McKelvey, echoing a similar comment last week by Anthony Ryan, the Treasury’s acting undersecretary for domestic finance.
The Treasury acknowledged the fiscal year 2009 deficit is likely to be far above the $482 billion projected in July, citing a new survey of its primary dealers. The financial firms told the Treasury they expect a $988 billion shortfall for the current fiscal year, which began Aug. 1.
The department didn’t release its own estimate for the coming deficit, in keeping with its usual practice. The department did announce more than $1 trillion in borrowing that is taking place between July and December.
Read moreU.S. to Borrow Record This Quarter to Finance Deficit