Debt Ceiling Options

AIMD-96-20R: Published: Dec 7, 1995. Publicly Released: Dec 7, 1995.

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GAO provided information on: (1) options available to the Secretary of the Treasury to meet federal government obligations and stay within the statutory debt limit; and (2) actions taken during the 1984 and 1985 debt ceiling crisis. GAO noted that: (1) during November 1995, Secretary Robert Rubin invoked his statutory authority to suspend investment in the Government Securities Investment Fund and redeem securities held by the Civil Service Retirement and Investment Fund to prevent government obligations from exceeding the debt ceiling; (2) the Secretary cannot exercise such authority until he has determined that a debt issuance suspension period exists; (3) Secretary Rubin did not invoke his authority to suspend investment in the Civil Service Retirement and Disability Fund; (4) the Secretary is required to make the funds whole after the debt crisis has ended; and (5) during the 1984 and 1985 debt ceiling crisis, former Secretary Baker took other actions affecting the trust funds before invoking his statutory authorities including delaying investment of trust fund receipts, redeeming securities of other trust funds earlier than normal, and exchanging Treasury securities held by the Civil Service Trust Fund for securities not subject to the debt ceiling.

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