Government Ran Overdraft for Day, Treasury Dept. Says
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WASHINGTON — 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.
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