WASHINGTON (Reuters) - The bitter partisan fight over raising the U.S. debt ceiling last year pushed up the U.S. Treasury's borrowing costs by $1.3 billion, congressional auditors said on Monday, giving Democrats ammunition to paint Republicans as fiscally irresponsible.
Delays in raising the debt limit created uncertainty in the Treasury market and led to higher borrowing costs, according to a report from the Government Accountability Office (GAO), an investigative arm of Congress.
In addition to the $1.3 trillion in higher interest rates for fiscal 2011, GAO said multi-year Treasury securities issued last year also will continue to accrue higher interest costs for years to come.
Some Republican lawmakers had refused to raise the debt ceiling -- the legal amount the U.S. Treasury is allowed to borrow -- without concessions from Democrats to reduce massive budget deficits, which have exceeded $1 trillion since President Barack Obama took office.
The fight eventually brought the U.S. government to the brink of a debt default and cost the United States its top-tier, triple-A credit rating from Standard and Poor's.
Treasury Secretary Timothy Geithner, who was forced to dip into government pension funds and move cash around in order to avoid hitting the debt limit, is warning Republicans against a repeat of last summer's theatrics.
But the most powerful Republican in Congress, House Speaker John Boehner, has already said he will not raise the debt ceiling without more spending cuts.
"The cost of last summer's recklessness by Republicans only continues to grow, yet they seem eager to do it all over again," said Sander Levin, the top Democrat on the House of Representatives' tax-writing committee.
As a result of last year's compromise to raise the debt ceiling, lawmakers and the White House agreed to a cap on discretionary spending and to $1.2 trillion in across-the-board government cuts over the next decade.
The cuts are set to start taking effect when tax breaks for all Americans expire at the end of the year, which is forcing lawmakers and the Obama administration into another high-stakes battle over government spending and taxes.
The U.S. Treasury is on track to hit the $16.4 trillion debt ceiling before the end of the year, though emergency tools will allow the department to push the deadline into 2013.
Michael Steel, a spokesman for Boehner, said on Monday that the deficit reduction plan that accompanied last year's debt limit hike will save taxpayers $2.1 trillion.
"The problem is the unsustainable deficits and debt, not our efforts to force Washington Democrats to deal with them. Denial is not an effective strategy for dealing with the serious problems facing America," Steel added.
A Treasury spokesman declined comment.
(Reporting By Rachelle Younglai and David Lawder; Editing by Cynthia Osterman)
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