The Treasury Department said Monday it expects to borrow $361bn of marketable debt in the quarter ending June 09, up $196bn from the estimate announced in February. The revised estimate includes $200bn for the Supplementary Financing Program (SFP), which accounts for much of the driving force behind the increase, said the Treasury in a statement. It also will drive the assumed $269bn cash balance for the end of Q309, during which Treasury projects will borrow $515bn of marketable debt. The department borrowed a total $481bn during Q109, finishing at the end of March with a cash balance of $269bn. The actual borrowed amount in the quarter represents a decrease from the originally estimated $493bn, due to lower receipts offset by lower outlays and adjustments in the cash balance, the Treasury said. Much of the Treasury’s spending in recent months has focused on liquidity and credit market programs that, although aimed to encourage lending and boost investor and consumer confidence, create a side effect of raising the federal budget deficit. The Office of Management and Budget estimates the deficit to rise to $1.75trn — or 12.3% of gross domestic product (GDP) — in the 2009 fiscal year from $459bn — or 3.2% of GDP — in fiscal year 2008, said Office of Macroeconomic Analysis Ralph Monaco. “The expenditures leading to these deficits represent an investment in near-term economic growth,” Monaco said Monday, according to a statement. “Without the programs that these deficits support, the U.S. economy would be in much worse shape, and the conditions to support a recovery would take longer to take hold.” Monaco said the deficit is expected to narrow in subsequent years as the economy strengthens and temporary spending measures expire. Over the longer term, the deficit will average about 3% of GDP and the level of publicly held debt, net of the assets the government has acquired, will be stable at about 60% of GDP and in line with other developed nations. Write to Diana Golobay at diana.golobay@housingwire.com.

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