Debt Limit Impasse: U.S. Treasury’s Description of Extraordinary Measures
On August 2, 2021, the U.S. Department of the Treasury released a report describing the extraordinary measures being implemented “in order to prevent the United States from defaulting on its obligations as Congress deliberated on increasing the debt limit.” The four measures discussed in detail are the following:
- Suspending sales of State and Local Government Series Treasury securities;
- Redeeming existing, and suspending new, investments of the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund;
- Suspending reinvestment of the Government Securities Investment Fund; and
- Suspending reinvestment of the Exchange Stabilization Fund.
Each measure has its limitations and pitfalls, such as how much headroom (if any) is achieved under the debt limit or how long the measure can last. Fortunately for employees and retirees, any temporary suspensions must be made whole once the debt limit impasse has ended and they, therefore, should not feel the effects of these measures. However, as Congress is still stalled on a decision two months in, these extraordinary measures will soon be exhausted and the government is facing the likelihood of quickly running out of cash.
Need help finding something? Ask one of our librarians for assistance!