WASHINGTON — The brightly illuminated room looks like mission control for a space flight. Seven people, wearing headphones, stare intently at computer screens. Three minutes before the deadline, a disembodied voice exclaims, “We have coverage.” Van Zeck has been helping to manage the government’s credit line since 1971. That has been a busy job in recent months. This is no shuttle launch. It is an auction of United States Treasurysecurities, and $32 billion has just been sold in a blink. It was another successful operation for Van Zeck, the commissioner of the public debt, who has the world’s biggest credit card. Mr. Zeck has worked for the federal government for 38 of his 60 years. He is a very busy man these days because the government is floating on a sea of red ink, as it borrows more and more money to stimulate the economy, bail out banks, shore up auto companies, aid struggling homeowners and fight foreign wars. In a city full of pompous politicians and bombastic bureaucrats, Mr. Zeck quietly runs one of the government’s truly indispensable operations. He is not a policy maker. He does not decide how much to borrow. He just makes sure the money is borrowed, in a regular and predictable way, at the lowest possible cost to the government over time. “We are the back office, the plumbing,” Mr. Zeck said. “We are borrowing a ton of money. It has to be done right.” Public attention will focus on the debt this week because the White House and the Congressional Budget Office plan to issue dueling estimates of federal spending and revenue for the next 10 years. In a preview, the White House said Friday that it saw the cumulative total of deficits over the next 10 years adding up to $9 trillion, or $2 trillion more than it anticipated in February. That means much more government borrowing. Last year alone, Mr. Zeck auctioned off $5.5 trillion of Treasury securities, to replace maturing debt and to meet new borrowing needs. Wall Street dealers expect the figure to exceed $8 trillion this year — an average of more than $253,000 every second. In the first eight months of the current fiscal year, the government issued more Treasury bills, notes and bonds than in all of last year. Mr. Zeck expects to conduct more than 280 auctions this year, up from 263 last year and about 220 a year from 2004 to 2007. Mr. Zeck and his colleagues have a passion for precision. They keep track of federal debt to the penny. Debt held by the public stood at $3.4 trillion when President George W. Bush took office in 2001. When President Obama was inaugurated in January, the debt was $6.3 trillion. Since then, it has grown by $1 trillion, to $7.3 trillion. When Mr. Zeck tells people he works at the Bureau of the Public Debt, he said, they often quip, “You will have work forever.” Even when the economy begins to expand, the bureau will still have plenty to do, as tax receipts typically lag in a recovery. Moreover, the government will need to borrow money to help finance entitlement programs for baby boomers. Mr. Obama’s budget predicts that debt held by the public will soar, exceeding 60 percent of the gross domestic product in a few years. The share has never exceeded 50 percent in the last 50 years. “Debt as a percentage of G.D.P. is rising and nearing a postwar high,” the Treasury said this month. Treasury auctions are an arcane business, and Mr. Zeck runs them so smoothly that Treasury secretaries and Congress rarely interfere. Mr. Zeck said he had not been called to testify before Congress in about 15 years. Other agencies have lost track of large sums because their financial records were a mess. “That’s just not acceptable to us,” Mr. Zeck said. Referring to the accountants who keep a daily tally of the federal debt, Mr. Zeck said: “These are people who reconcile their checkbooks. The idea of missing a penny would drive them crazy.” Treasury auctions have become larger and more frequent. The auction calendar is extremely crowded. On almost every work day, the Treasury is announcing, conducting or settling auctions. “Historically,” Mr. Zeck said, “we did not do auctions on Fridays. But now we are doing some.” In February, the Treasury announced it was bringing back the seven-year note, for the first time since 1993, and it doubled the number of 30-year bond auctions, to eight a year. Just three months later, it announced a further increase in the frequency of 30-year bond auctions, to 12 a year. On Aug. 5, the Treasury told investors they “should expect auction sizes to continue to rise in a gradual manner over the medium term.”
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Tuesday, 25 August 2009
Stephen Crowley/The New York Times
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