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AIMD-96-20R 1 (1995-12-07)

handle is hein.gao/gaobackzx0001 and id is 1 raw text is: United States General Accounting Office Washington, D.C. 20548 Accounting and Information Management Division B-270558 December 7, 1995 The Honorable Nick Smith House of Representatives Dear Mr. Smith: This letter (1) provides information on options currently available to the Secretary of the Treasury to meet the federal government's obligations and stay within the statutory limit on public debt and (2) lists actions that former Treasury Secretary James Baker took during the 1984 and 1985 debt ceiling crisis. On November 15 and 16, 1995, Treasury Secretary Robert E. Rubin invoked two authorities available to him to manage within the debt ceiling: 1. Suspend investment of the Government Securities Investment Fund (G Fund). Subsection (g) of 5 U.S.C. 8438 authorizes the Secretary of the Treasury to suspend the issuance of additional amounts of obligations of the United States to the Fund if such issuance cannot be made without causing the amount of public debt to exceed the debt ceiling. The subsection contains instructions on how the Secretary is to make the Fund whole after the debt ceiling crisis has ended. 2. Redeem securities held by the Civil Service Retirement and Investment Fund. Subsection (k) of 5 U.S.C. 8348 authorizes the Secretary of the Treasury to redeem securities or other assets of the Fund before maturity to prevent the amount of public debt from exceeding the debt ceiling. Before exercising this authority, the Secretary must first determine that a debt issuance suspension period exists. Such a period is defined as any period for which the Secretary has determined that obligations of the United States may not be issued without exceeding the debt ceiling. The amount of securities that can be redeemed under this authority is limited to an amount equal to the total amount of benefit payments authorized under subchapters 83 GAO/AIMD-96-20R Debt Ceiling Options t5 5 r

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