Treasury Department Says US Debt Will Probably Continue to Go Up
Despite the largest vaccine campaign in history and falling COVID-19 cases, the US government may have to continue borrowing to overcome the pandemic. On Wednesday, the Treasury Department forecasted that borrowing costs would likely rise due to costs related to COVID-19. Federal spending on economic stimulus, public health measures, and other pandemic related costs will continue to drive up the record amount of debt.
At the end of 2020, US public debt was recorded at $27.7 trillion. This figure is only expected to go higher as the Democratic-controlled Congress works with the Democratic white house to push more stimulus. "Treasury continues to face uncertain and sizable borrowing needs due to expenditures associated with the government's response to COVID-19 as well as the impact of the pandemic on economic activity and government receipts," Brian Smith, the department's deputy assistant secretary for federal finance, said in a statement.
The Treasury Department plans to raise $63.1 billion next week in offerings of 3-year notes, 10-year notes, and 30-year bonds. The department ramped up its issuances in April 2020 when the CARES Act was signed in April 2020. "Treasury believes that these changes have created sufficient capacity to address near-term projected borrowing needs," Smith said.