WASHINGTON -- The Bush administration said yesterday it is bringing back the 30-year Treasury bond, a move that could help finance the national debt and appeal to investors looking for a safe, longer-term investment option.
The Treasury Department said the first auction of the bonds will take place in the first quarter of 2006, with auctions held twice a year.
The United States stopped selling the ''long" bond in 2001, which turned out to be the last year the government produced a budget surplus. Since then, record red ink has pushed the national debt to $7.8 trillion.
Timothy Bitsberger, the department's assistant secretary for financial markets, told reporters that Treasury anticipates around $20 billion to $30 billion in 30-year bonds will be sold each year.
Analysts said resurrecting the 30-year bond, which the government first began selling in 1977, makes sense from a number of perspectives. Long-term interest rates are currently low and if they stay that way, the government will have an opportunity to borrow money at a very attractive rate.
Similarly, by issuing long-term bonds the government will have the ability to refinance shorter-term debt --which can expose the government to higher financing costs if interest rates rise. Refinancing shorter-term debt with longer-term debt that is locked in at a particular rate could help shield the government from so-called ''rollover risk," analysts said.