Government Ran Overdraft for Day, Treasury Dept. Says

The government was in worse financial shape than first believed earlier this month when its coffers ran dry, the Treasury Department said Thursday.

The department confirmed that on Oct. 8 the government actually overdrew its account at the Federal Reserve--its banker. The government ran a “small, inadvertent overdraft on Oct. 8 which was discovered on the morning of Oct. 9,” Treasury spokesman Art Siddon said.

Siddon declined to give a figure, but Fortune magazine reported that it was $100 million.

On Oct. 9, the department used borrowing power from an obscure federal agency, the Federal Financing Bank, to raise $5 billion in cash to keep the government from bouncing checks for the first time in history.

At the time, the government reported that it had less than $500,000 in its accounts on Oct. 8 before the infusion of new money. The money squeeze developed because of an impasse in Congress in passing legislation to raise the debt limit above $2 trillion.