T-Bill Auctions Resume After Near Default

The Treasury began to replenish its coffers Wednesday after last-minute congressional action raising the debt limit averted the government’s first-ever default.

The Treasury sold $16 billion of new three- and six-month bills at its weekly auction, which was postponed Monday because the government’s borrowing authority had dropped to $2.8 trillion, a level its debt already surpassed.

The drop also forced postponement of $40 billion in quarterly refunding auctions; Treasury Secretary Nicholas F. Brady said the government would default if Congress failed to act by midnight Tuesday.

Without congressional action, the Treasury would have been unable to redeem $13.8 billion in bills that mature today.

Congress approved legislation shortly before the midnight deadline raising the debt ceiling to $3.1 trillion for the fiscal year ending next Sept. 30. President Bush signed the bill on Wednesday morning and the Treasury rescheduled its auctions, starting with the short-term bill offering that afternoon.

The Treasury on Wednesday also resumed sales of U.S. savings bonds and special securities for state and local governments, the temporary investment vehicles for money those governments raise in the bond market, that had been suspended.