The U.S. Treasury Department announced this week it plans to pay down a small portion of the national debt, a first since 2007.
“During the April-June 2013 quarter, Treasury expects to pay down $35 billion in net marketable debt, assuming an end-of-June cash balance of $75 billion. This borrowing estimate is $138 billion lower than announced in February 2013,” the federal agency said in a statement Monday.
“The decrease in borrowing relates primarily to higher receipts, lower outlays, and changes in cash balance assumptions,” the statement added.
News that a portion of the debt will be paid off means that the Obama administration will likely have some wiggle room when it comes time to fight over the federal debt ceiling – again.
Of course, the Treasury Department’s claims have been met with a certain amount of skepticism.
“Any such claims of the Treasury paying down debt are simply ridiculous and amount to no more than accounting trickery, gimmicks, and outright deceit,” said Fergus Hodgson, policy adviser with the Future of Freedom Foundation.
“The way the federal government runs its accounting would be illegal if done by any major company. The reality is that federal debts, if you include unfunded liabilities such as Social Security and Medicare payments, exceed $200 trillion and are worse than those of Greece relative to the size of the economy. Further, in recent years they have been exploding far beyond the official deficit figures,” he added.
Here’s the Treasury Department’s full statement:
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