Treasury Secretary Steven Mnuchin said the first ultra-long bond issuance could “absolutely” make sense to help finance the U.S. government, while indicating he’d be reluctant to swell the federal budget deficit to pay for planned infrastructure investment.
Issuing longer-dated bonds “is something we’re considering at Treasury. We have a working group looking at it,” Mnuchin said in an interview on Bloomberg Television on Monday in Los Angeles. ‘‘We think that it’s something that could absolutely make sense for us at Treasury.”
While the Treasury Department under President Barack Obama explored the idea of issuing Treasuries beyond the current 30-year limit, Mnuchin’s comments suggest the Trump administration is more seriously considering the idea. The Treasury may drop further hints this week while announcing its plans for auctioning long-term notes and bonds in the current quarter.
The Treasury issues coupon-bearing debt with maturities ranging from two to 30 years. Other countries have opted to sell bonds due in more than three decades — Spain, Belgium and France issued 50-year bonds in 2016.
In the interview, Mnuchin called a bipartisan deal on a $1.1 trillion spending bill announced early Monday morning as “important to keep the government open” and said the focus has shifted to next year’s budget to get what the Trump administration really wants done. The government is looking at public-private partnerships as a means to finance President Donald Trump’s plans to build and upgrade infrastructure, Mnuchin said.
“On the infrastructure side, the president is determined that we make a major investment,” he said. “There’s a huge part of the infrastructure that needs to be rebuilt, and we’re going to do that in a lot of different ways through public-private partnerships, and different financing, so we don’t balloon the budget by a trillion dollars.”