updated 5/4/2005 11:22:02 AM ET 2005-05-04T15:22:02

The Bush administration announced Wednesday that it is considering bringing back the 30-year bond to provide financing for the government in an era of record budget deficits.

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The government stopped selling the bond in October 2001, the fourth and last year the government ran a budget surplus. The sales stopped at a time when the government was projecting surpluses over the next decade of $5.6 trillion.

However, those surpluses never materialized as a recession, a war on terror and President Bush's string of tax cuts turned the black ink into oceans of red. The administration is projecting a record deficit this year of $427 billion.

Officials at the Treasury Department announced on Wednesday that the government is considering bringing back new sales of 30-year bonds.

Timothy S. Bitsberger, assistant Treasury secretary for financial markets, said that a decision on whether to bring back the bond would be announced on Aug. 3, the date the government will announce its borrowing plans for that quarter.

Bitsberger said if the government does decide to sell the 30-year bond again, it would do so in auctions twice a year beginning in February 2006.

The government stopped selling the 30-year bond because officials believed it cost the government money to finance borrowing with such a long issuance period. The longest security the Treasury now sells is a 20-year inflation-indexed bond.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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