Government Announces Upcoming Quarterly Debt Auction

WASHINGTON (AP) _ The Treasury Department said Wednesday that it will sell $18 billion in debt at its quarterly auction next week, the smallest amount in more than seven years. <br/><br/>The government

Wednesday, October 31st 2007, 8:32 am

By: News On 6

WASHINGTON (AP) _ The Treasury Department said Wednesday that it will sell $18 billion in debt at its quarterly auction next week, the smallest amount in more than seven years.

The government also announced that starting next year it will lower the minimum amount that can be purchased at a Treasury auction from the current $1,000 down to $100 in an effort to attract more small investors.

The Treasury said that the auctions next week will include $13 billion in 10-year notes and $5 billion in 30-year bonds.

The 10-year notes will be auctioned on Wednesday, Nov. 7, while the 30-year bonds will be auctioned on Nov. 8. The $18 billion total is down slightly from the $22 billion raised at the last quarterly refunding done three months ago and is the smallest total since January 2000, a period when the government was running surpluses.

Those surpluses, the product of a record-long economic expansion, disappeared after 2001 with deficits soaring to an all-time high of $413 billion in dollar terms in the 2004 budget year.

Since that record was set, the deficits have been gradually declining, hitting a five-year low of $162.8 billion in the 2007 budget year, which ended on Sept. 30.

Those falling deficits have meant smaller government borrowing needs. In May, the government announced that it was discontinuing sales of three-year Treasury notes.

The reduction in the minimum sales amount at an auction will be the first to occur since the 1990s, when the minimum was reduced from $10,000 to $1,000.

Treasury officials said the latest reduction is a result of an improved government processing system that will handle the auctions. This system will go into effect in the first half of next year and at that time the minimum amounts of Treasury securities that ban be purchased will be lowered to $100.

Officials said about 1 percent to 2 percent of the current auctions represent bids at the current minimum of $1,000.