WASHINGTON: The US Treasury on Wednesday said hitting a limit on government borrowing won't shake up short-term debt issuance as much as in the past, but added it cannot say how long it will be able to pay the government's bills after a limit becomes binding on March 1.
Congress increased the debt ceiling through March 1, after which the Treasury will need to use so-called "extraordinary" accounting measures to fund itself until it runs out of cash. Analysts expect the cash could run out late in the summer without a new agreement.
The Treasury said it will have a larger cash balance in the run-up to March 1 relative to past debt ceiling impasses, which will mean a relatively steady level of short-term bond issuance.
"As a result, Treasury does not need to reduce bill issuance as dramatically," Brian Smith, Treasury's deputy assistant secretary for federal finance, said in a statement. "Treasury does not anticipate bill issuance to be as volatile as it has been in the past when prior debt limit suspension periods expired."
The Treasury also said it was keeping issuance of bonds and notes steady in the coming three months although it anticipated an increase in bill issuance until around the middle of April.