Presentation to the 

Treasury Borrowing Advisory Committee

U.S. Department o

Office of Deb

Fe
Office of Debt Management

Fiscal Outlook
Office of Debt Management

Borrowing requirements continue to grow

Fiscal Year to Date Deficits

(monthly data) 

-49

-162

-258

-148

-121

-157 -163

-56

-154

-106

-88

-311

-152

-319

-269

-371

-263

-122

-42

-80

-274

-81

-483

-600-500-400-300-200-100

0

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

$ Billions

2007 Y-O-Y % Change

2008 2009
Office of Debt Management

In the first quarter of FY2009, year-over-year growth in indivicorporate tax receipts was negative while outlay growth acc

Individual and Corporate Tax Receipts 

Fiscal Year to Date

0

200400600800

10001200140016001800

Oct Nov Dec Jan Feb Mar Apr May Jun Jul A

$ billions

Total Outlays

Fiscal Year to Date

0

500

10001500200025003000

Oct Nov Dec Jan Feb Mar Apr May Jun Jul A

$ billions
Office of Debt Management

Declines in corporate tax receipts have generally preceded lin individual withheld and non-withheld receipts

Rolling 12-Month Growth Rates

-40%-30%-20%-10%

0%

10%20%30%40%

Dec-81 Dec-84 Dec-87 Dec-90 Dec-93 Dec-96 Dec-99 Dec-02 

Corp Taxes WH Taxes nWH Taxes
Office of Debt Management

D a ily T re a s u r y O p e r a tin g C a s h B a la n c e s

0

100200300400500600700800

J a n - 0 8 F e b - 0 8 M a r -0 8 A p r- 0 8 M a y - 0 8 J u n - 0 8 J u l- 0 8 A u g - 0 8 S e p -0 8 O c t-0 8 N o v -0 8 

$ b illio n s D a ta th r

C a s h B a la n c e w it h S F P s

Cash balances remain volatile

Treasury Daily Operating Cash Balance

Excluding SFPs

0

255075

100125150175

Oct Nov Dec Jan Feb Mar Apr May Jun Jul 

$ billions

FY 2007FY 2008FY 2009

Note: Data throu

O
Office of Debt Management

And maturing securities continue to grow and add to financi

Coupons Maturing*

February 15, 2009-May 15, 2038

0

1020304050607080

15-FEB-2009

28-FEB-2009

15-MAR-2009

31-MAR-2009

15-APR-2009

30-APR-2009

15-MAY-2009

31-MAY-2009

15-JUN-2009

30-JUN-2009

15-JUL-2009

31-JUL-2009

15-AUG-2009

31-AUG-2009

15-SEP-2009

30-SEP-2009

15-OCT-2009

31-OCT-2009

15-NOV-2009

30-NOV-2009

15-DEC-2009

31-DEC-2009

15-JAN-2010

31-JAN-2010

15-FEB-2010

28-FEB-2010

15-MAR-2010

31-MAR-2010

15-APR-2010

30-APR-2010

15-MAY-2010

31-MAY-2010

15-JUN-2010

30-JUN-2010

15-JUL-2010

31-JUL-2010

15-AUG-2010

31-AUG-2010

15-SEP-2010

30-SEP-2010

15-OCT-2010

31-OCT-2010

15-NOV-2010

30-NOV-2010

15-DEC-2010

31-DEC-2010

15-JAN-2011

15-FEB-2011

28-FEB-2011

31-MAR-2011

15-APR-2011

30-APR-2011

31-MAY-2011

30-JUN-2011

31-JUL-2011

15-AUG-2011

31-AUG-2011

30-SEP-2011

31-OCT-2011

15-NOV-2011

30-NOV-2011

15-DEC-2011

31-DEC-2011

15-JAN-2012

31-JAN-2012

15-FEB-2012

29-FEB-2012

31-MAR-2012

15-APR-2012

30-APR-2012

31-MAY-2012

30-JUN-2012

15-JUL-2012

31-JUL-2012

15-AUG-2012

31-AUG-2012

30-SEP-2012

31-OCT-2012

15-NOV-2012

30-NOV-2012

31-DEC-2012

31-JAN-2013

15-FEB-2013

28-FEB-2013

31-MAR-2013

15-APR-2013

30-APR-2013

15-MAY-2013

31-MAY-2013

30-JUN-2013

15-JUL-2013

31-JUL-2013

15-AUG-2013

31-AUG-2013

30-SEP-2013

31-OCT-2013

15-NOV-2013

30-NOV-2013

31-DEC-2013

15-JAN-2014

15-FEB-2014

15-MAY-2014

15-JUL-2014

15-AUG-2014

15-NOV-2014

15-JAN-2015

15-FEB-2015

15-MAY-2015

15-JUL-2015

15-AUG-2015

15-NOV-2015

15-JAN-2016

15-FEB-2016

15-MAY-2016

15-JUL-2016

15-AUG-2016

15-NOV-2016

15-JAN-2017

15-FEB-2017

15-MAY-2017

15-JUL-2017

15-AUG-2017

15-NOV-2017

15-JAN-2018

15-FEB-2018

15-MAY-2018

15-JUL-2018

15-AUG-2018

15-NOV-2018

15-JAN-2019

15-FEB-2019

15-AUG-2019

15-FEB-2020

15-MAY-2020

15-AUG-2020

15-FEB-2021

15-MAY-2021

$ Billions

10 YR IIS NOTE 10 YR NOTE 2 YR NOTE20 YR IIS BOND 3 YR NOTE 30 YR BOND30 YR IIS BOND 5 YR IIS NOTE 5 YR NOTE

*Based on coupon securities ou

In the next 5 years, 56 days will have maturities greater than $20 billion and 22 days greater than $30 billion.
Office of Debt Management

Primary dealer estimates of the FY 2009 deficit rose to $1.6 t$988 billion ahead of the November refunding

FY 09 Deficit Estimates 

Primary 

Dealers* CBO 

Current: 1626 1186 Range based on average absolute forecast error** 1535-1717 1086-128Estimates as of: January 09 January 0

* Primary Dealers reflect average estimate.** Ranges based on errors from 2004-2008.*** Based on Primary Dealer feedback on January 29, 2009.
Office of Debt Management

SFP related financing and funding needs have led to higher including cash management bills

Total Private Bills Matu

$50$55$60$65$70$75$80$85$90

Mar-08 Jun-08 Sep-08 

Billions

Bills Outstanding

Total

SOMAPrivate

$0

$400$800

$1,200$1,600

Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08

Billions

Bills: Issued and Net Cash Raised

-

1,0002,0003,0004,000

2005 2006 2007 2008

FY

Amount ($, bn)

Rollover Net cash

CMBs and SFP Outstand

(as of 1/31/09)

-$100

$0

$100$200$300$400$500$600$700$800

7/1

8/1

9/1

10/1

11/1

12/1

1/1

2/1

3/1

4/1

5/1

6/1

Billions
Office of Debt Management

Growing financing needs resulted in significant borrowing v

Total Net Coupons Issued

F

FY09, $272

-$50

$0

$50

$100$150$200$250$300

10/1 12/30 3/29 6/27 

Billions
Office of Debt Management

Existing coupon securities continue to increase to larger, mbenchmark sizes

Coupon Issuance in 2007-2009

10152025303540455055

Sept-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sept-08

Oct-08

Size (billions, $)2-Yea

(

5-Year (Monthly)
Office of Debt Management

The amount of debt due to mature within 5 years rose betwe2007 and December 2008

Debt Due to Rollover Within N Years

$0

$1,000$2,000$3,000$4,000$5,000$6,000$7,000

0 5 10 15 20 25 

Years Forward

Debt Maturing

(Billions)
Office of Debt Management

The average maturity of marketable debt outstanding fell in tquarter of FY 2009 as short-term issuance increased

Average Maturity of Marketable Debt Outstandin

2030405060708090

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2

months

Quarterly data are actuals through December 31 , 2008. 

49 months as of December 31, 2
Office of Debt Management

The shares of all securities outstanding other than bills have the share of bills outstanding has grown to address near terneeds

Distribution of Marketable Debt Outstanding by Secu

Fiscal Year 

0%5%

10%15%20%25%30%35%

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 

BILLS 2-3 YR NOTES 4-7 YR NOTES 8-10 YR NOTES BONDS 

Net financing projections for FY 2009-10 are based on internal estimates; p rojections for FY 201 1-13 are based o n OM B 2009 MSR Bu

financing needs are spread proportionally across auctioned securities and are derived from hypo thetical auction sizes. Initial sizes are baamounts as of January 15, 2009 and assume the outstanding level of bills on December 31, 20 08. All projections exclude CMB issuance 
Office of Debt Management

Treasury continues to monitor developments in inflation-ind

Potential Cost / Benefit of the Most Recently Auctioned TIPS versu

Comparable Nominal Treasuries under Various Inflation Scenarios 

-3,000-2,000-1,000

0

1,0002,0003,0004,0005,000

-3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 

Hypothetical Inflation over Remaining Life of Security at Auction

Cost (+) / Saving (-) versus Equivalent 

Nominal ($,mm) 

October 5-Year January 10-Year January 20-Yea

Surv

Breakeven Inflation Rates
Office of Debt Management

The Treasury repo market, after experiencing dislocations, is readjusting with volumes increasing and fails plateauing
Office of Debt Management

Adjusting the auction calendar should be considered to addborrowing needs

Security Recent Size, $ Billions4-week, 13-week, and 26-week bills 32, 29, 2852-week bills 22 per month2-year note 40 per month3-year note 30 per month5-year note 30 per month10-year note 52 (20 initial + 16 + 1st reo

2nd reopening) 

30-year bond 20 (10 initial + 10 reopenin5-year TIPS 14 (8 initial + 6 reopening)10-year TIPS 14 (8 initial + 6 reopening) 20-year TIPS 14 (8 initial + 6 reopening) Cash Management Bills 39 (average size in FY 200(including SFP)

Announced through 1/27/09
Office of Debt Management

Treasury is expecting to make further changes to the aucticalendar as a result of increased financing needs. What adjustments to the current securities offerings should make at this time that would be easily introduced and provincreased flexibility? 
Treasury Borrowing Advisory Committee

Presentation to the U.S. Treasury

February 3,2009
 	 

 
  
 

Source: Haver Analytics

Federal Withheld Tax Receipts (Year-to-Year Pct Chg) and Unemploymen

-6-4-2

02468

1012

Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Ja

Withheld Taxes (Left) Unemployment Rate (Right, Scale Inverted)
  

Source: Bloomberg Indices

FY2006 FY2007 FY2008 FY200(Billions USD)

Budget Position -248 -161 -455 -1,Net Borrowing 218 145 788 2,Debt Outstanding 4,303 4,448 5,236 7,

(% GDP)

Budget Position -1.9% -1.2% -3.2% -12Net Borrowing 1.7% 1.1% 5.5% 17Debt Outstanding 33.1% 32.6% 36.8% 53
  !

TSY Net Borrowing Needs as Pct of Nominal GDP -- Including Range of Estimates For 20

-8-4

048

12162024

1980 1983 1986 1989 1992 1995 1998 2001 2004 

Forecasted Ra

2009: 18% of 

Best Estim

Source: Haver Analytics
 " 
  # 


Source: US Federal Reserve, Bloomberg

Spread Between the Funds Rate and 30-Year Treasury Yield (Basis Points) and the 

Funds Rate

02468

10121416

1982 1985 1988 1991 1994 1997 2000 2003 2

Funds Rate (left) Funds - Bonds (right)
   #

Source: Various US Government Agencies

Allocated Amount Size

Federal Reserve - $5.255 trillion - 62%

Commercial Paper Funding Facility LLC (CPFF) 1,800,000,000,000 21% Holdings down $100B from peak to 

Term Auction Facility (TAF) 900,000,000,000 11%

Other Assets 601,963,000,000 7%

Unnamed MBS and GSE Program 600,000,000,000 7% Fed may hike size of purchases

Money Market Investor Funding Facility (MMIFF) 540,000,000,000 6%

Term Securities Lending Facility (TSLF) 250,000,000,000 3%

Term Asset Backed Securities Loan Facility (TALF) 200,000,000,000 2% February launch - size may rise

Discount Window 139,211,000,000 2% Borrowing on downward trend

Other Credit Extensions (AIG) 122,800,000,000 1%

ABCP Money Market Fund Liquidity Facility (AMLF) 61,900,000,000 1%

Net Portfolio Maiden Lane LLC (Bear Sterns) 28,800,000,000 0%

Securities Lending Overnight 10,300,000,000 0% Program being little used following 

Secondary Credit 118,000,000 0%

5,255,092,000,000 62%

Federal Deposit Insurance Corporation - $1.788 trillion - 21%

FDIC Liquidity Guarantees 1,400,000,000,000 16% $150 billion in debt issued to date

Loan Guarantee to Citigroup 249,300,000,000 3%

Loan Guarantee to Lending arm of General Electric 139,000,000,000 2%

1,788,300,000,000 21%

Treasury Department - $1.15 trillion - 13.5%

Troubled Asset Relief Program (TARP) 700,000,000,000 8% Second $350B tranche just requeste

Fannie Mae / Freddie Mac Bailout 200,000,000,000 2%

Stimulus Package and Bank Tax Breaks 197,000,000,000 2% Package provide only temporary bo

Treasury Exchange Stabilization Fund (ESF) 50,000,000,000 1%

1,147,000,000,000 14%

Federal Housing Administration - $300 billion - 3.5%

Hope For Homeowners 300,000,000,000 4%

Total - 100% 8,490,392,000,000 100%
$% % &$'

Source: Citigorup, Bloomberg; Note: Potential issuance only includes term debt that is eligible for the program. Commercial Pa

other money market instruments may significantly increase the potential size of the market.

Selected Senior Unsecured Debt Outstanding as of 1/27/09

Debt Mat

($mm) (%) 

Bank of America 24,850 16.8% 

GE 24,271 16.5% 

JP Morgan Chase & Co. 20,760 14.1% 

Citi 18,350 12.4% 

Other Banks 15,206 10.3% 

Goldman Sachs Group 15,017 10.2% 

Morgan Stanley 14,575 9.9% 

American Express Co. 5,900 4.0% 

Sun Trust Banks Inc. 3,000 2.0% 

PNC Financial Services 2,900 2.0% 

HSBC USA 2,675 1.8% 

GMAC 0 0.0% 

National City Corp 0 0.0% 

US Bancorp 0 0.0% 

Grand Total 147,504 100.0% 

Issuance
 (  
 " #' $' #

Source: IMF World Economic Outlook Database; Note: 2008 values for Germany, Japan and UK are IMF estimates; 2009 observa

Select Countries: Public Debt Outstanding as a Share of GDP

0

50

100

150

200

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 200

Germany Japan UK US
)$' *   % '

% Total US Debt Held by Foreigners

30%

35%

40%

45%

50%

55%

60%

Mar-00 Dec-00 Sep-01 Jun-02 Mar-03 Dec-03 Sep-04 Jun-05 Mar-06 Dec-06 S

Source: US Department of Treasury, Haver Analytics
)$' *   % '

China and Japan Account for More Than Half of the Total

Source: US Department of Treasury; Note: As of November 2008

US Treasury Holdings Abroad (Bil USD)

China, Mainland

27%

Japan

24% United Kingdom 15%

Carib Banking

Centers

9%

Oil Exports

8%

Switzerland

3% Hong Kong 3%

Brazil

5%

Russia

3%

Luxembourg

3%

US Treasury Holdings Abro

0 100 200 300 

China, Mainland

Japan

United Kingdom

Carib Banking Centers

Oil Exports

Brazil

Russia

Luxembourg

Hong Kong

Switzerland
# ) + *

Source: Haver Analytics

China: Net Foreign Purchases in Long-Term US Securities (Billion USD)

0

50

100

150

200

250

300

Jan-00 Sep-00 May-01 Jan-02 Sep-02 May-03 Jan-04 Sep-04 May-05 Jan-06 Sep-06 May-07 

Twelve-Month Annual Rate Six-Month Annual Rate
$ % 
 ' 

Source: Bloomberg Indices

Date Reserves (mil USD) % 

World 1/30/2009 6,757,009

China 12/31/2008 1,946,030 Japan 12/31/2008 1,003,300 India 1/23/2009 238,305 Taiwan 12/31/2008 291,710 South Korea 12/31/2008 201,220 Brazil 1/29/2009 201,572 Mexico 1/23/2009 84,045 US 1/23/2009 40,836 Argentina 11/30/2008 44,063 Canada 10/31/2008 39,634 Russia 1/23/2009 386,500 Eurozone 11/30/2008 204,202 Poland 9/30/2008 70,981 Turkey 1/23/2009 66,914 Norway 10/31/2008 38,323 

Asia

Americas

Europe
  % !   

T-Bill Share of Total Marketable Debt

15%

20%

25%

30%

35%

40%

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

Avg Maturity of Total Outstanding M

4045505560657075

1981 1983 1985 1987 1989 1991 1993 1995 

Source: US Department of Treasury, Haver Analytics
# $  ,, 

Source: Federal Reserve Bank of New York

LatestBNP Paribas Securities Corp.

Banc of America Securities LLC

Merrill Lynch Government Securities

Barclays Capital Inc.

Cantor Fitzgerald & Co.

Citigroup Global Markets Inc.

Credit Suisse Securities (USA) LLC

Daiwa Securities America Inc.

Deutsche Bank Securities Inc.

Dresdner Kleinwort Securities LLC

Goldman, Sachs & Co.

Greenwich Capital Markets, Inc.

HSBC Securities (USA) Inc.

J. P. Morgan Securities Inc.

Mizuho Securities USA Inc.

Morgan Stanley & Co. Incorporated

UBS Securities LLC.

January 1999ABN AMRO Incorporated

Aubrey G. Lanston & Co., Inc.

Bear, Stearns & Co., Inc.

BT Alex. Brown Incorporated

Barclays Capital Inc.

Chase Securities Inc.CIBC Oppenheimer Corp.

Credit Suisse First Boston Corporation

Daiwa Securities America Inc.

Deutsche Bank Securities Inc.

Donaldson, Lufkin & Jenrette Securities

Corporation

Dresdner Kleinwort Benson North Ameri

First Chicago Capital Markets, Inc.

Fuji Securities Inc.

Goldman, Sachs & Co.

Greenwich Capital Markets, Inc.

HSBC Securities, Inc.

J. P. Morgan Securities, Inc.

Lehman Brothers Inc.

Merrill Lynch Government Securities Inc

Morgan Stanley & Co. Incorporated

NationsBanc Montgomery Securities LLC

Nesbitt Burns Securities Inc.

Nomura Securities International, Inc.

Paine Webber Incorporated

Paribas Corporation

Prudential Securities Incorporated

Salomon Smith Barney Inc.

Warburg Dillon Read LLC.

Zions First National Bank