July 25, 2011
House Leaders Call for Short-Term Rise in Debt Ceiling
WASHINGTON – House Republicans intend to push for a vote this week on a two-step plan that would allow the federal debt limit to immediately rise by about $1 trillion and tie a second increase next year to the ability of a new joint Congressional committee to produce more deficit reduction.
Top Republicans were to try to sell the proposal to their rank and file in a crucial meeting Monday afternoon as House Republicans and Senate Democrats readied competing plans in an effort avoid a federal default next week.
The proposal would cut current spending and put legal limits on future spending, saving what Republicans estimate to be about $1.2 trillion over 10 years. The plan calls for no new revenue.
At the same time, a new 12-member committee evenly divided among Democrats and Republicans would be assigned the job of finding another $1.8 trillion in savings. The panel would have special privileges to bring legislation before the House and Senate and its proposal would not be subjected to amendment or Senate filibuster. If the plan passed, the president could seek another $1.6 trillion increase in the debt limit based on the new committee’s proposal.
The prospect of a potential second Congressional fight over a debt limit increase if the committee fails to deliver is likely to be a major sticking point with Congressional Democrats and the White House, who want a guaranteed debt limit increase through 2012.
House Republicans hope to win approval of their plan as early as Wednesday, putting pressure on the Senate, where Democrats will have to round up 60 votes to make any progress on their own plan. Senate Democrats were scheduled to issue their plan later Monday.
Under the House Republican plan, members of the Senate and House would also be required to vote on a balanced budget amendment to the Constitution after Oct. 1 but before the end of the year.
http://www.nytimes.com/2011/07/26/us/politics/26fiscal.html?emc=na
Remember they, Treasury, needed debt ceiling to be gradually increased ...
As Previously Announced, Treasury to Employ Final Extraordinary Measure to Extend U.S. Borrowing Authority Until August 2
7/15/2011
Washington, Today, the U.S. Department of the Treasury released the following statement from Jeffrey Goldstein, Under Secretary for Domestic Finance, regarding the use of the last of the four previously announced measures available to keep our nation under the statutory debt limit, suspension of reinvestment of the Exchange Stabilization Fund.
“Today, as previously announced, the Treasury Department will suspend reinvestment of the Exchange Stabilization Fund, the last of the measures available to keep the nation under the statutory debt limit.
In order to prevent a default on the nation’s obligations, Congress must enact a timely increase of the debt ceiling.”
The U.S. reached the debt limit on May 16, 2011, but the Treasury Department has employed three previous measures to temporarily extend our ability to meet the nation’s obligations. Those measures, in order taken, are (1) suspending issuance of State and Local Government Series (SLGS) Treasury securities; (2) declaring a “debt issuance suspension period” of the Civil Service Retirement and Disability Fund (CSRDF); and (3) suspending reinvestment of the Government Securities Investment Fund (G Fund).
As previously stated in the May, June, and July monthly updates, taken altogether, these four extraordinary measures allow the Treasury to extend borrowing authority until August 2, 2011.
Exchange Stabilization Fund
1. What is the Exchange Stabilization Fund (ESF)?
Section 10 of the Gold Reserve Act of 1934 created the ESF. By law, the ESF has a number of uses, including purchasing or selling foreign currencies to stabilize international financial markets and thereby prevent damage to U.S. exports and the national economy. The Treasury has a web page devoted to the ESF, describing its legal basis, history, and financial statements.
Congress has appropriated funds to the ESF.
Exchange Stabilization Fund
The Exchange Stabilization Fund (ESF) consists of three types of assets: U.S. dollars, foreign currencies, and Special Drawing Rights (SDRs), which is an international reserve asset created by the International Monetary Fund. The financial statement of the ESF can be accessed at "Reports" or "Finances and Operations."
The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury ("the Secretary").
The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.
The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.
__
Finances and Operations
ESF Assets and Liabilities
How ESF Operates
ESF Assets and Liabilities
The following lists show the types of assets and liabilities that are on the ESF's balance sheet. These balance sheet items are described below. The latest ESF financial statements are also available.
ESF Monthly Financial Statement
Assets
Special Drawing Rights
U.S. Government Securities
Euros
Yen
Liabilities
More information ~ Time for Transition - Dodd-Frank Law http://www.blogtalkradio.com/phoenix3333/2011/06/20/the-train-kept-a-rollin
Also read where we are now with the Dodd-Frank Law
Deputy Secretary of the Treasury Neal s. Wolin Written Testimony before the Senate Committee on Banking, Housing, and Urban Affairs 7/21/2011
“Enhanced Oversight after the Financial Crisis: The Wall Street Reform Act at One Year.”
July 21, 2011 ~ http://www.treasury.gov/press-center/press-releases/Pages/tg1252.aspx
