Republican deficit hawks, “Blue Dog” Democrats and people generally who believe government should live within its means may want to circle Feb. 9 on their calendar as a day of minor mourning.
That’s when the Treasury Department will revive, after a five-year hiatus, the “long bond,” the 30-year T-bill the government issues when it needs to borrow large amounts of money for a long time. And Treasury needs to borrow a record $171 billion in the first quarter of 2006 to finance the federal budget deficit.
Treasury discontinued the long bond in 2001 for the happy reason that it was no longer needed. Because of the improbable chemistry between the Clinton White House and congressional Republicans, the federal government had run four straight years of budget surpluses, the first consecutive surpluses since the ’50s. Indeed, Treasury was paying down the national debt and looking at a 10-year accumulated surplus of more than $5 trillion.
Unhappily, 2001 was the last year the federal government ran a surplus.
President Bush took office, a new breed of Republican entered Congress and what with record spending, record tax cuts, the war and emergencies _ hurricanes, floods _ for which the government had seen no need to set aside money, we’ve run four straight years of deficits, including an all-time record of $413 billion in 2004. And we will continue to run deficits for as long as forecasts can reasonably be made.
The national debt recently hit a record $8 trillion. Hence the return of the 30-year bond.
Get used to living with the deficit. The Treasury Department is.
(Contact Dale McFeatters at McFeattersD(at)SHNS.com)