Treasury Says It Balanced Budget in December—But Borrowed $96B on Dec. 31 to Hit Debt Limit During Fiscal Cliff Negotiations

By Terence P. Jeffrey January 11, 2013

In its monthly statement for December, released Friday, the U.S. Treasury says the federal government balanced its budget during the month, bringing in roughly $270 billion in revenues while making roughly $270 billion in expenditures.  Yet, the Treasury also says that during December it increased by $63.079 billion the national debt subject to the legal limit set by Congress, thus dramatically bringing the debt to that legal limit on Dec. 31, just as Congress and the White House were involved in final negotiations on a deal to avert the so-called “fiscal cliff”--which would have cancelled all of the lower income tax rates signed into law by President George W. Bush.  As the fiscal cliff negotiations were underway on Dec. 31, the Treasury, according to the Daily Treasury Statement for that day, borrowed an additional $95.953 billion against the statutory limit, thus increasing the debt from $16.298022 trillion at the start of business that morning to $16.393975 trillion at the close of business that day. (The current legal limit on the debt is $16.394 trillion.)  To Read More….