Treasury Quadruples Borrowing Estimates to Pay for Stimulus

The U.S. Treasury more than quadrupled its borrowing estimate for the quarter through June, and expects to need some $1.3 trillion over the second half of the fiscal year to help pay for a raft of fresh pandemic-relief spending.

The Treasury’s projections, released in Washington Monday, incorporated the impact of President Joe Biden’s $1.9 trillion pandemic-relief bill, enacted in March. In a February outlook, the Treasury left out any guess on such spending.

Both spending and revenues have been challenging for the Treasury and private-sector analysts alike to project during the pandemic. The borrowing figure for the three months through June came within the broad range of strategists’ estimates.

Among the Treasury’s projections:

  • $463 billion in borrowing April through June
  • $800 billion for the cash balance at the end of June to $800 billion. That’s $300 billion more than previously seen
  • $821 billion in borrowing for the three months through September
  • $750 billion for the cash balance at the end of September

The Treasury has been steadily working down its cash balance from a record level last year, after accumulating that extra firepower to give itself flexibility to deal with any pandemic-related spending contingencies.