The federal government, running record budget deficits (search) over the past two years, is projecting that it will have to borrow a record $147 billion in the first three months of 2005, the Treasury Department announced Monday.

The department projected net borrowing needs of $100 billion for the current October-December quarter, less than the $122 billion it had earlier estimated would be needed to meet the government's obligations.

Treasury said it is currently projecting net borrowing of $147 billion in the January-March quarter of next year, which would top the previous record net borrowing amount for a single quarter of $146 billion set in the January-March quarter of this year.

In the recently completed July-September quarter, Treasury (search) borrowed a net $89 billion and ended the quarter with a cash balance of $36 billion. For the current quarter, Treasury is projecting to end the three-month period with a cash balance of $25 billion.

With the huge borrowing needs, the government is only $25 million below the national debt ceiling of $7.384 trillion. It has been using accounting maneuvers with the debt held in the government's trust funds to keep from going over the limit.

The Republican-controlled Congress is planning to return for a special session later this month to raise the debt ceiling and finish work on a budget.

Republicans put off action on raising the debt ceiling (search) because they did not want to have to vote on the issue before the election. Democrats blame the record deficits on Bush's decision to push through massive tax cuts that Democrats say mostly benefited the wealthy.

The deficit for the budget year that ended on Sept. 30 hit a record $413 billion in dollar terms, up from the previous record of $377 billion set in 2003.

The government through the 2001 budget year recorded a string of four surpluses, something that had not occurred for seven decades. While President Bush (search) took office with a projection that the 10-year surplus would hit $5.6 trillion, a recession, spending on homeland security and the war on terror and Bush's tax cuts wiped out the surpluses.

The administration and congressional Republicans say the most important measure of the deficit is that the 2004 shortfall was an estimated 3.6 percent of the total economy. That is well below the worst-ever 6 percent figure set in 1983 under President Reagan.