Treasury Secretary Steven Mnuchin plans to boost US borrowing from April through June by an unprecedented $3 trillion to support an economy entering a recession caused by the coronavirus.
The Treasury said the increase is driven by new stimulus spending legislation and tax receipt deferrals, steps taken to help the economy overcome social distancing measures that shuttered businesses.
Privately held net marketable debt will rise $2.999 trillion in the April-to-June quarter, assuming an end-of-June cash balance of $800 billion, according to Treasury estimates. The borrowing estimate is $3.055 trillion higher than announced in February.
The Treasury department has been helping to pump billions of dollars of relief directly into the pockets of American families and business owners, and trillions of dollars of liquidity through the Federal Reserve.
The Trump administration and lawmakers in both parties are looking to spend more, setting aside concerns about the ballooning federal deficit, which is causing a debt burden that's poised to eclipse the record seen in the wake of World War II as a share of the economy.
House Speaker Nancy Pelosi sees a "major package" for states and local authorities that could be up to $1 trillion. Senate Majority Leader Mitch McConnell, who initially was cool to the idea of any more spending, now says it may be necessary.
Fed Chairman Jerome Powell last week urged Congress to use its authority to help the economy: "This is the time to use the great fiscal power of the United States" and help "get through this with as little damage to the longer-run productive capacity of the economy as possible."