National Debt Will Be Cut by Record Amount

A booming economy that is flooding government coffers with tax revenues will permit the U.S. Treasury to pay down the national debt by a record amount during the current quarter, the agency reported Monday.

The Treasury said it will reduce government indebtedness during the April-June second quarter by $116 billion--surpassing the previous record pay-down of $97.9 billion made during the second quarter last year.

The second quarter includes the April 15 deadline for filing individual income tax returns from the prior year, so it typically yields a flood of money from last-minute taxpayers.

In addition, the agency predicted another pay-down during the third quarter of about $10 billion.

Although the quarterly pay-downs are significant, they represent a small inroad into reducing accumulated government debts that total about $5.5 trillion.

Still, the longer term trend of the government’s debt is downward. Congress has adopted a budget plan that foresees reducing the government’s debt by $1.8 trillion between 2000 and 2009.