Roll Over Plan: Treasury Needed to Pay Off Record $7.5T in Maturing Debt in FY 2013, Issued $8.3T New Debt; Increased Net Debt $777B

Terence P. Jeffrey | October 7, 2013 | 5:44pm EDT
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Treasury Secretary Jack Lew (AP Photo)

( - The U.S. Treasury needed to pay off a record of approximately $7,546,726,000,000 in maturing Treasury securities in fiscal 2013, which ended last Monday, according to Treasury's official accounting.

During the same period, the Treasury turned around and issued another $8,323,949,000,000 in new Treasury securities.

The spread between the old debt held by the public that matured and was paid off during the fiscal year and the new debt that was sold to cover government spending over and above tax revenues, increased the net federal government debt held by the public by $777.223 billion during the fiscal year.

In the previous fiscal year, 2012, the Treasury had needed to redeem only $6,804,956,000,000 in Treasury securities, but then it needed to turn around and issue $7,924,651,000,000 in new securities—increasing the net debt held by the public by $1.119695 trillion.

The Treasury was forced to redeem a record amount of old debt in fiscal 2013, even though the debt did not increase as much as it had in fiscal 2012, because a large portion of the debt is composed of shorter-term Treasury bills and notes, for which the government can pay a lower interest rate than it would need to pay on longer term Treasury bonds.

Treasury bills have maturities of anywhere from a few days to 52 weeks. Treasury notes have maturities of between two years and ten years. Treasury bonds have maturities of 30 years. And the Treasury also sells Treasury-Inflation Protected Securites (TIPS), which have terms of 5, 10 or 30 years.

In September 2013, the average interest rate the Treasury paid on Treasury bills was 0.074 percent. The average interest rate it paid on Treasury notes was 1.808 percent. The average interest rate it paid on inflation-protected securities was 1.084 percent. And the average interest rate it paid on 30-year Treasury bonds was 5.101 percent.

That means the interest rate the Treasury needed to pay on its long-term bonds was about 69 times as great as the interest it paid on its short-term bills.

As of the end of fiscal 2013, the U.S. government’s marketable debt held by the public was approximately $11,577,400,000,000. That included approximately $7,750,336,000,000 in medium-term Treasury notes, $1,527,909,000,000 in short-term Treasury bills—and only approximately $1,363,114,000,000 in 30-year Treasury bonds.

The Treasury’s medium- and short-term low-interest notes and bills accounted for about $9,278,245,000,000—or 80 percent—of the government’s $11,577,400,000,000 debt held by the public.

Thanks to the short-term, quick-roll-over nature of most of the federal government’s marketable debt, the average interest rate on the government’s marketable debt was just 1.981 percent in September.

In January 2000, it was 6.620 percent—or 3.3 times as great as it is now.

Here, in millions of dollars, are the figures for the value of the debt held by public that Treasury redeemed and issued in each fiscal year since 2006, and also the net annual increase in that debt:


2013                7,546,726                    8,323,949                    777,223

2012                6,804,956                    7,924,651                    1,119,695

2011                7,026,617                    8,078,266                    1,051,649

2010                7,206,965                    8,649,171                    1,442,206

2009                7,306,512                    9,027,399                    1,720,887

2008                4,898,607                    5,580,644                    682,037

2007                4,402,395                    4,532,698                    130,303

2006                4,297,869                    4,459,341                    161,472

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