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TREASURY DEP ART IYlENT LIBRARY Treas. BJ 10 .A13 P4 v.356 Department of the Treasury PRESS RELEASES UBLIC DEBT NEWS Department of the Treasury - Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 2, 1996 CONTACT: Oftlce of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $14,084 million of 13-week bills to be issued January 4, 1996 and to mature April 4, 1996 were accepted today (CUSIP: 912794X90). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 5.02%5.05%5.04%- Investment Rate 5.17%5.20%5.19%- Price 98.731 98.723 98.726 Tenders at the high discount rate were allotted 19%-. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $46,394,162 Accepted $14,084,322 $41,449,937 1,301,295 $42,751,232 $9,140,097 1, 301,295 $10,441,392 3,522,430 3,522,430 120,500 $46,394,162 120,500 $14,084,322 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 5.03 -- 98.729 RR-794 UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 2, 1996 CONTACT: Office of Financing . 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $14,047 million of 26-week bills to be issued January 4, 1996 and to mature July 5, 1996 were accepted today (CUSIP: 9127942Y9). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 5.01% 5.03% 5.03% Investment Rate 5.23% 5.25% 5.25% Price 97.453 97.443 97.443 Tenders at the high discount rate were allotted 31%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $46,005,327 Accepted $14,046,577 $39,234,604 1,143,823 $40,378,427 $7,275,854 1,143,823 $8,419,677 3,650,000 3,650,000 1,976,900 $46,005,327 1,976,900 $14,046,577 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 5.02 RR-795 97.448 D E P .\ R T 'I E N T () F THE T R E :\ S l; R Y NEWS OFF1CE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIDNGTON,D.C.• 20220· (202) 622·2960 FOR RELEASE AT 2:30 P.M. January 2, 1996 CONTACT: Office of Financing 202/2l9-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series of Treasury bills totaling approximately $28,000 million, to be issued January ll, 1996. This offering will provide about $300 million of new cash for the Treasury, as the maturing weekly bills are outstanding in the 'amount of $27,702 million. In addition to the maturing l3week and 26-week bills, there are $l7,35l million of maturing 52week bills. The disposition of this latter amount was announced last week. Federal Reserve Banks hold $ll,064 million of bills for their own accounts in the three maturing issues. These may be refunded at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $2,569 million of the three maturing issues as agents for foreign and international monetary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Foreign and international monetary authorities are considered to hold $2,257 million of the 13-week and 26-week issues. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (3l CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-796 For press releases, speeches, public schedules and official biographies, call our 24-hourfax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED JANUARY 11, 1996 January 2, 1996 Offering Amount . $14,000 million $14,000 million Description of Offering: Term and type of security CUSIP number Auction date Issue date Maturity date Original issue date Currently outstanding Minimum bid amount Multiples . 91-day bill 912794 Y2 4 January 8, 1996 January 11, 1996 April 11, 1996 October 12, 1995 $13,235 million $10,000 $ 1,000 182-day bill 912794 2Z 6 January 8, 1996 January 11, 1996 July 11, 1996 January 11, 1996 $10,000 $ 1,000 The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 4, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 52-WEEK BILLS Tenders for $18,894 million of 52-week bills to be issued January 11, 1996 and to mature January 9, 1997 were accepted today (CUSIP: 9127942K9). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.88% 4.89% 4.89% Investment Rate 5.15% 5.16% 5.16% Price 95.066 95.056 95.056 Tenders at the high discount rate were allotted 50%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED ( in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS RR-797 Received $57,783,927 AcceQted $18,893,552 $52,292,676 941,251 $53,233,927 $13,402,301 941,251 $14,343,552 4,550,000 4,550,000 0 $57,783,927 0 $18,893,552 PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washin~ton, DC 20239 FOR IMMEDIATE RELEASE January 4, 1996 Contact: Peter Hollenbach (202) 219-3302 CUBES PROGRAM TO REOPEN MARCH 4, 1996 Treasury's Bureau of the Public Debt announced today that it is reopening the Coupons Under Book-Entry Safekeeping (CUBES) program on March 4, 1996. The reopening of the CUBES window offers holders of coupons previously stripped from bearer Treasury securities the opportunity to convert those coupons to book-entry form. Eligible coupons can be submitted for conversion to CUBES during a six month period beginning March 4, 1996 and ending August 30, 1996. All non-callable coupons with payment dates after February 15, 1997 are eligible for conversion to safe, convenient book-entry form. Some 500,000 coupons worth about $l.3 billion are outstanding and eligible for conversion to book-entry. Conversion to CUBES benefits holders of coupons and the Treasury. Switching to book-entry CUBES allows holders of these payments to eliminate the risk and expense associated with safeguarding paper coupons. CUBES also contributes to market efficiency through on-line trading of the book-entry holdings. Depository institutions can present coupons for conversion at the Federal Reserve Bank of New York (FRBNY). Institutions wishing to participate in the CUBES program should contact the FRBNY at (212) 720-8183 or 8184 as soon as possible to get information on how to present the coupons. Under the CUBES program, depository institutions that have notified the FRBNY of their intention to participate can convert stripped Treasury coupons during the period from March 4, through August 30, 1996. No trading of CUBES balances will be permitted for twelve (12) business days from the deposit of the coupons to allow for verification and approval of the submission by Treasury. Entities other than depository institutions that hold stripped Treasury coupons and wish to convert those coupons to book-entry form under the CUBES program must arrange for such conversion through a depository institution. Details on the reopening of the CUBES window were published in the Federal Register on December 29, 1995, (60 FR 67388). Participating institutions will be charged a fee of $4 per coupon and are responsible for the full cost and risk associated with the delivery of the coupons to the Federal Reserve Bank of New York. 000 PA-205 PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR RELEASE AT 3:00 PM January 5, 1996 Contact: Peter Hollenbach (202) 219-3302 PUBLIC DEBT ANNOUNCES ACTIVITY FOR SECURITIES IN THE STRIPS PROGRAM FOR DECEMBER 1995 Treasury's Bureau of the Public Debt announced activity figures for the month of December 1995, of securities within the Separate Trading of Registered Interest and Principal of Securities program (STRIPS). Dollar Amounts in Thousands Principal Outstanding (Eligible Securities) $864,913,622 Held in Unstripped Form $643,297,289 Held in Stripped Form $221,616,333 Reconstituted in December $ 13,842,586 The accompanying table gives a breakdown of STRIPS activity by individual loan description. The balances in this table are subject to audit and subseqent revision. These monthly figures are included in Table VI of the Monthly Statement of the Public Debt, entitled "Holdings of Treasury Securities in Stripped Form." Information about "Holdings of Treasury Securities in Stripped Form" is now available on the Department of Commerce's Economic Bulletin Board (EBB). The EBB, which can be accessed using personal computers, is an inexpensive service provided by the Department of Commerce. For more information concerning this service call 202-482-1986. 000 PA-206 TABLE VI -- HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM, DECEMBER 31, 1995 (In thousands) ---------------------------------- ----- ----.------------------ ----- ------------------------------ ---- ----------------- ------------------------------------------------------------ Pnnclpal Amount Ou1standlng Matunty Date Loan Descnptlon Note A-1996 Note C-1996 Note 0-1996 Note A-1997 Note B-1997 Note C-1997 Note A-1998 9% Note B-1 998 9-1/4% Note C-1998 8-7/8% Note 0-1998 8-7/8% Note A-1999 9-1/8% Note B-1999 8% Note C-1999 7-7/8% Note 0-1999 8-1/2% Note A-2000 8-7/8% Note B-2000 8-3/4% Note C-2000 8-112% Note 0-2000 7 -3/4% Note A-2001 8% Note B-2001 7-718% Note C-2001 7-1/2% Note 0-2001 7-112% Note A-2002 6-3/8% Note B-2002 6-1/4% Note A-2003 5-3/4% Note 8-2003 5-7/8% Note A-2004 7-1/4% Note B-2004 7-1/4% Note C-2004 7-718% Note 0-2004 7 -112% Note A-2005 . 6-1/2% Note B-2005 6-1/2% Note C-2005 5-718% Note 0-2005. 11-5/8% Bond 2004 12% Bond 2005 , 10-3/4% Bond 2005 9-318% Bond 2006 11-3/4% Bond 2009-14 11-1/4% Bond 2015 10-5/8% Bond 2015 9-718% Bond 2015 9-1/4% Bond 2016 7-1/4% Bond 2016 7-112% Bond 2016 8-3/4% Bond 2017. 8-7/8% Bond 2017 9-1/8% Bond 2018 9% Bond 2018 . 8-7/8% Bond 2019 8-1/8% Bond 2019. 8-112% Bond 2020 8-3/4% Bond 2020 8-3/4% Bond 2020 7-7/8% Bond 2021 8-1/8% Bond 2021 8-1/8% Bond 2021 , .. 8% Bond 2021 7-1/4% Bond 2022. 7-5/8% Bond 2022. 7-1/8% Bond 2023 6-1/4% Bond 2023 . 7-1/2% Bond 2024 7-5/8% Bond 2025 6-7/8% Bond 2025 8-7/8% 7-3/8% 7-1/4% 8-1/2% 8-5/8% 8-7/8% 8-1/8% Total I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 02/15/96 05/15/96 11/15/96 05/15/97 08/15/97 11/15/97 02/15/98 05/15/98 08/15/98 11/15/98 02/15/99 05/15/99. , 08/15/99 11/15/99 .. 02/15/00. 05/15/00 .. 08/15/00 11/15/00 02/15/01 05/15/01 .. 08/15/01 11/15/01 05/15/02 08/15/02 02115103 08/15/03 02/15/04. 05/15/04 08/15/04. 11/15/04 02/15/05. 05/15/05 08/15/05 .. 11/15/05 11/15/04. 05/15/05. 08/15/05 02/15/06 11/15/14 .. 02/15/15 08/15/15 11/15/15 .. .. 02115116 05/15/16 11/15/16 .. 05/15/17 08/15/17. 05/15/18 .. 11/15/18. 02/15/19. 08/15/19 02115120 05/15/20 .. 08/15/20 02/15/21 05/15/21. 08/15/21 , 11/15/21 08/15/22 .. 11/15/22 02/15/23 08/15/23 11/15/24 02/15/25. 08/15/25 II ---------------------------- ----- ---- . - - - - - - - -------- ·---11 Total Portion Held In Portion Held In II Unstnpped Form Stnpped Fomn II 8,450,609 20,085,643 20,258,810 9921,237 9,362,836 9,808,329 9,159,068 9,165,387 11,342,646 9,902,875 9,719,623 10,047,103 10,163,644 10,773,960 10,673,033 10,496,230 11,080,646 11,519,682 11,312,802 12,398,083 12,339,185 24,226,102 11,714,397 23,859,015 23,562,691 28,011,028 12,955,077 14,440,372 13,346,467 14,373,760 13,834,754 14,739,504 15,002,580 15,209,920 8,301,806 4,260,758 9,269,713 4,755,916 6,005,584 12,667,799 7,149,916 6,899,859 7,266,854 18,823,551 18,864,448 18,194,169 14,016,858 8,708,639 9,032,870 19,250,798 20,213,832 10,228,868 10,158,883 21,418,606 11,113,373 11,958,888 12,163,482 32,798,394 10,352,790 10,699,626 18,374,361 22,909,044 11,469,662 11,725,170 12,602,007 864,913,622 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 6,277,809 16,349,643 17,206,010 8,724,437 7,247,636 6,958,729 7,769,628 6807,187 8,495,446 6,840,475 8,222,023 6,954,303 7,792,694 7,255,560 8,118,633 5,872,230 7,115,206 7,701,282 8,546,402 9,293,833 9,766,385 22,005,462 10,473,917 22,692,615 23,211,523 27,613,428 12,955,077 14,440,372 13,312,867 14,373,760 13,834,354 14,739,504 15,002,580 15,209,920 4,481,006 2,506,208 7,493,713 4,753,164 2,204,784 9809,079 3,249,756 3,879,059 6,705,254 18,525,951 17,999,168 9,428,729 9,132,058 2,347,039 2,615,070 5,063,598 16,642,312 6,146,468 3,941,763 5,051,886 10,270,173 4,659,688 3,656,922 6,307,619 8,215,190 3,637,226 14,420,761 22,106,516 6,931,022 9,333,170 12,602007 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 643297,289 I I I 2,172,800 3,736,000 3,052,800 1,196,800 2,115,200 2,849,600 1,389,440 2,358,200 2,847,200 3,062,400 1,497,600 3,092,800 2,370,950 3,518,400 2,554,400 4,624,000 3,965,440 3,818,400 2,766,400 3,104,250 2,572,800 2,220,640 1,240,480 1,166,400 351,168 397,600 o o II II II II II II II II II II II II II I I I I I I I I I I I I I I 33,600 o 400 o o o Reconstituted This Month #1 17,600 268,800 79,200 58,000 12,800 49,600 102,400 1,600 64,800 14,400 195,200 928,000 208,850 72,000 139,600 3,200 314,560 98,800 128,000 101,000 80,000 265,760 113,120 224,000 93,792 71,200 o o o o o o o o 200,000 17,800 116,800 3,820,800 1,754,550 1,776,000 2,752 3,800,800 2,858,720 3,900,160 3,020,800 561,600 297,600 865,280 8,765,440 4,884,800 6,361,600 6,417,800 14,187,200 3,571,520 4,082,400 6,217,120 16,366,720 843,200 7,299,200 8,506,560 26,490,775 2,137,600 7,062,400 3,953,600 802,528 4,538,640 2,392,000 o 284,000 366,080 429,440 196,800 174,400 o I II II II II II II II II II II II II II II II II II II II 011 113,600 851,040 473,600 150,400 179,800 641,600 238,720 166,800 725,920 466,720 142,400 406,080 353,600 416,000 404,000 694,400 358,400 723,584 495,520 348,800 II 13,842,586 221,616,333 o ======================= === ============= === ======================== === ==================== === ==================== ====================== #1 Effective May 1, 1987. secunt,es held ,n stnpped form were eligible for reconstitution to their unstnpped form Note On the 4th workday of each month Table VI Will be available after 3 00 P m eastern time on the Commerce Department's Economic Bulletin Board (EBB) The telephone number for more InformatIOn about EBB IS (202) 482-1986 The balances In thiS table are subject to audit and subsequent adjustments DEPARTMENT OF THE TREASURY ~~J78£9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ................................ OFFICE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE January 5, 1996 CONTACT: Calvin Mitchell (202) 622-2920 TREASURY CONSULTS WITH MEMBERS OF CONGRESS ON ECONOMIC DEVELOPMENT IN PUERTO RICO The leadership of Representatives Serrano, Gutierrez and Velazquez is a crucial part of the budget debate regarding IRC Sec. 936 and influenced the decision to include the President's objections to the Reconciliation bill's provisions in the veto message. Treasury has met twice in the last two weeks with Representatives Serrano, Gutierrez and Velazquez. The three Members of Congress have demonstrated consistent leadership on this important issue. They made their dedication to preserving jobs in Puerto Rico by defending Sec. 936 clear to the President in 1993 and they have stayed with that position since then. The Administration appreciates their work and input. President Clinton's objections to the Congress' Sec. 936 proposal indicate that he remains committed to providing incentives in order to promote economic development in Puerto Rico. The President's proposal to reform the incentives for job creating investments in insular areas would preserve more than 75 percent of the tax benefits anticipated under current law over the next seven years according to OMB figures, and an even greater percentage according to CBO numbers. The President's proposal was decided on so shortly before the submission of his seven year balanced budget plan to the Congress that it was not possible to give Representatives Serrano, Gutierrez and Velazquez an opportunity to comment before it was decided on. RR-798 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 The late decision made it possible only to brief Members of Congress on the proposal before it was sent to the Congress. We regret that it was not possible to give Representatives Serrano, Gutierrez and Velazquez a chance to influence the decision based on a draft, as had been committed. We will continue to work with these important supporters of the President and keep them as informed as possible in the difficult budget negotiation process. The Treasury will monitor the impacts of phasing out the tax credit under Sec. 936 based on income attributed to the islands. We appreciate the concern of Representatives Serrano, Gutierrez and Velazquez about phasing out the income based credit. The Treasury Department will continually monitor the effects of the phase-out on the economy of Puerto Rico. The Administration's Inter-Agency Working Group on Puerto Rico, including representatives of the Treasury Department, will meet quarterly to review the situation and to consider any necessary measures for the future. -30- D E P .\ R T ,. E N T () F THE lREASURY T R E :\ S l; R Y NEWS OFF1CE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIDNGTON,D.C.• 20220. (202) 622.2960 EMBARGOED FROM WIRE MOVEMENT UNTIL SATURDAY, JANUARY 6, 1995 AT 5:30 P.M. EST Text as Prepared for Delivery THE U.S. ECONOMY: PROGRESS AND PROSPECTS REMARKS OF DEPUTY SECRETARY LAWRENCE H. SUMMERS AMERICAN ECONOMICS ASSOCIATION JANUARY 6, 1995 Introduction I have two points that I want to make before you today. First, the outlook for the American economy is brighter than it has been at any time in my professional lifetime. That is partly the result of cyclical phenomena. But it is also the predictable result of the ways in which this Administration has managed the economy, and the ways in which we have supported American engagement in a dynamic global economy. Second, as we enter this election year the American people will be confronted with a clear choice. It will be a choice between laissez-faire government and appropriate government. It will be a choice between tric14e down theories that have been tried and have failed to address the challenges that Americans are rightly thinking about -- rising inequality, the skills needed to compete in a global economy -- and an Administration that believes that government has a role to play in helping Americans meet these challenges. The American Economy Today Let me start with the state of the American economy today. In an aggregate sense, the U.S. economy is in better shape than it has been in several decades. We are enjoying a low inflation, investment led recovery for the first time since John F. Kennedy was President. RR-799 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040 • Private sector job creation has been very strong over the past three years with the creation of some 7.7 million jobs. Civilian unemployment is down to 5.6 percent from 7.1 percent (calculated under old basis) when the President took office. • Poverty is coming down for the first time in half a decade. The poverty rate fell to 14.5 percent in 1994 from 15.1 percent the year before. The number of people in poverty dropped by over a million, to 38.1 million. These were the first declines since 1989. • Housing affordability reached a 20 year peak in 1993 as mortgage rates fell. Mortgage interest rates have remained only about 20 points above the 25 year low hit in late 1993. • '{eal median family income increased by 2.3 percent in 1994, the f;. _ c,uiH in five years. Moreover, income grew for all components of the income distribution, from the lowest to the highest. That means that more Americans are sharing the fruits of this expansIOn. A Well-Managed Economy Part of this performance is the result of cyclical factors. But it is also the result of three policy directions that this Administration has pushed forward. One is that for the first time in decades, oui economy is well-managed. • The President's budget reductions have brought the government deficit down for three years in a row for the first time since Harry Truman was President. • At 2.3 percent last year -- down from 4.9 in 1992 -- we had the smallest federal government deficit as a proportion of GDP among all the Group of Seven industrialized nations in 1995. We look set to match that performance in 1996. • The cyclically adjusted federal deficit has fallen too, from an estimated $230.2 billion in 1992 to 207.9 billion in 1993, 187.7 in 1994 and 166.9 last year. The adjusted deficit's share of GDP has also fallen from 3.9 percent in 1992 to 2.4 last year. • After a decade of rapid growth during the 1980s, the President's budget-cutting effort held growth in national debt (held by the public) as a proportion of GDP to less than 1. 5 percent in 1993. The ratio then declined slightly in 1994 and 1995. As would be expected, budget deficit reduction has eased pressure on the other deficit the current account deficit. 2 • The current account deficit has indeed widened as one would expect would occur during an expansion -- from 1.0 percent of GOP in 1992 to 1.6 in 1993, 2.2 in 1994 and an estimated 2.4 last year. But that is still far below deficit levels that were reached at similar points in earlier expansions, such as the mid-so Then, a u.s. recovery sent the current account deficit soaring from 2.6 percent of GOP in 1984 to 3.7 percent by 1987. Fiscal responsibility and a reduction in the. government's claim on savings has kept interest rates at levels that are historically low for this point in an expansion. • The rate on the long-bond has dipped below 6 percent, close to its all-time low of 5.87 percent reached in October 1993. Low interest rates have propelled the economy forward, sending business investment soarmg. • Real business investment in equipment is at an all-time high, both in absolute levels and as a share of real GOP (measurements began in 1929). In short, we are building the capacity to keep growth moving at a sustainable, noninflationary pace. Our record on fiscal policy has been matched by an approach to monetary policy that recognizes that inflation is the greatest threat to sustained recovery. This President and this Secretary of the Treasury have consistently emphasized that they and the Federal Reserve share the goal of sustained recovery with low inflation.. And the Administration has consistently recognized that the Federal Reserve must act independently towards these objectives. If one wonders why the Dow has enjoyed one of its best years ever and is reaching new highs, and why business activity is so strong almost across the board, I am convinced it is because of Americans' new sense of confidence that our economy is being well-managed. Letting Market Forces Operate A second factor in our bright economic outlook is that this Administration has moved to let market forces operate. • We have shrunk the size of government, to the point where the number of government employees is its lowest level in 30 years, and the number of government employees as a percentage of civilian non-farm labor is at its lowest level since 1933. 3 • It was the President who launched market-oriented reform of wireless communications in his 1993 budget, which turned some 200 megahertz over to private sector use, and implemented the FCC's auction procedure to raise some $11 billion in revenue and harness private sector initiative. • This year saw the elimination of the Interstate Commerce Commission. It is worth remembering that President Clinton made that proposal in his State of the Union Address last year. • The Administration introduced legislation in 1994 to restructure and streamline the Superfund process for cleaning up toxic waste sites. The goal was to rationalize remedies and cleanup measures without weakening protection, reduce litigation expenses, and improve state and community participation. While the legislation has not been adopted, the Administration has moved to implement as many of the ... ~asurC3 as can be taken through administrative refoml::' _:: :leo Global Engagement This Administration has pursued a third policy course that is essential to our economic future. We have, against serious domestic opposition, moved to open markets and continue American engagement in a burgeoning global economy. There is no question that trade has become one of the most dynamic parts of our economy. • Total U.S. exports and imports of goods and services grew from only 9.8 percent of GDP in 1965 to 17.8 percent in 1985 and 21.7 percent in 1992. This Administration's market-opening measures has helped lift that figure to 24.2 percent of GDP for the first three-quarters of 1995 alone. • Between 1988 and 1992, almost 60 percent of real growth in our economy came from export expansion. • Export growth has averaged 8 percent yearly since 1992, more than double GDP growth. U.S. firms now export more than $700 billion in nominal terms, enough to support some 10 million U.S. jobs. All of that is just a drop in the bucket of what can be attained, as some 3 billion people in the developing world -- bolstered by open markets and the right economic policies - get on a rapid escalator to prosperity over the next few decades. 4 With some calling for a temporary halt to new trade accords and others preaching a kind of economic nationalism not heard since the 1920s, the Administration has nonetheless recognized how critical maintaining the regional and global momentum for liberalization is to our economic future. We completed the adoption of the NAFT A. We brought the Uruguay Round to fruition. We are moving to ensure that liberalization continues in Asia, through APEC, and in our own hemisphere, through Chilean accession to NAFT A, and through the Free Trade Area of the Americas envisioned at the Summit of the Americas. All told, the United States has concluded some 150 trade agreements over the past three years, from the largest ever public procurement agreement in history with the European Union, to a groundbreaking agreement to protect Americans' intellectual property rights in China. I call our strategy export activism. It is not the reactive protectionist strategy of the seeks to erect walls, to benefit industries that are able to muster political muscle. Nor is it the turn the other cheek, laissez-faire policy that some of my friends in the audience would recommend. Instead, it is a strategy based on a simple premise: more trade leads to more prosperity. And it recognizes that in a complex world, it is essential that all our trading partners move with us to open markets, if the political support for liberalization is to be maintained. P~L, l '-1.t A Budget that Invests A well-managed economy, a commitment to allowing market forces to operate, and global engagement to maintain our ability to compete globally -- these are three factors which lie behind much of the progress that we have seen. We are now engaged in negotiations over the budget. There is a blackout on comments, so I cannot discuss these talks in any detail. Nonetheless, let me say that differences over the budget need to be worked out in a reasonable way. It is wrong to shut down government as a way of bludgeoning the process. And it is wrong to raise even the prospect of default. As Senator Dole himself has said, enough is enough. There is now a bi-partisan commitment to balance the budget over the near term with spending cuts. But as economists, you understand that how we balance the budget matters as much as whether it is balanced. Retaining unnecessary programs while refraining from investments that pay positive real returns can be as damaging for the country's future as spending that overshoots appropriate levels. 5 Let me touch on one example. Some 18 million American children rely on Medicaid for immunizations, regular check-ups, and emergency care -- the kind of health care without which they stand little chance of contributing to the American economy. Some 750,000 American pre-school children participated in Head Start last year -- the kind of pre-school training that makes sure they become productive members of our society. Some 14 million American children live in working families that would see taxes rise under Congressional budget proposals. Congressman Kasich is right when he says that American children have much to fear from mushrooming national debt. But they have much more to fear from budget proposals that would deny 2 to 4 million children meaningful Medicaid benefits by the year 2002. They have much more to fear from proposals that would slash investments in education and training by some $31 billion over 7 years. They have much more to fear from budget proposals that would deny Head-Start to 180,000 children by 2002, or slash funding for Safe and Drug Free Schools. and would leave the safety net that feeds and protects OUi nation's less advantaged children in tatters. Fiscal restraint is not synonymous with fiscal responsibility. Appropriate government means a government that makes the many public investments that can only be taken by government -- such as investments in children -- that pay positive economic returns. At times, compassion is also economically sound. In short, the kind of restructuring of the national balance sheet that some propose would be extremely short-sighted, and in some ways more dangerous than the legitimate fiscal concerns that many on both sides of the political spectrum in Washington are attempting to address. ChaUenges for the Future I've described an aggregate economic environment that is brighter than it has been in decades. Let me touch on one challenge that remains salient both of economists and scholars, as well as in the minds of most Americans. Put simply, it is the fact that the benefits brought by a booming aggregate economy have not been as widely shared as one would hope. After rapid growth in the 1950s and 60s, real, median family income growth. slowed over the 1970s and early 1980s, fell deeply and for longer than usual during the 1990 recession during the 1990, and by end 1994 continued to remain 5 percent below 1989 levels. The gains that have been made have not accrued equally among income classes. While all income groupings saw their real incomes double during the 1950s, 1960s, and 1970s, growth in the 1980s became lopsided, with the highest quintile gaining more ground than anyone, and the lowest quintile actually falling behind. From 1991 to 1993 all but the highest quintile lost ground, while the top 5 percent enjoyed annual average gains of over 6.4 percent. 6 Gains in wealth follow a similar pattern. The top 1 percent of households took some 83.7 of the increase in wealth over most of the 1980s, while the bottom 80 percent as a whole garnered a mere 6.5 percent. Put simply, while the poorest families are much worse off than they were a generation ago and the middle class are slightly better off, only those who were already very wealthy are today even more affluent than before. A Clear Choice The reasons for these changes are complex and not fully understood. Listed in terms of importance, I would include as major factors the rise of information technology, increasing competition in labor markets, the decline of unions and the minimum wage, and the rise of international competition. What is clear going into the election, is that Americans will be presented with two strategles for addressing the challenges that we face. One is the laissez-faire, tri.'k Jp-down strategy of the past. It proposes reducing taxes on those with the highest incomes. It proposes increasing taxes on labor, while reducing taxes on capital. It proposes slashing traditional safety nets that have supported even the working poor, and have offered them their one strong hope of entering the economic mainstream. Our approach recognizes that leaner government still leaves room for appropriate government. It recognizes that there are such things as public goods -- investments that government must make, because the invisible hand of the market cannot, and will not make them. Flat Tax Let me offer just one example of the kind of policy prescription that I think is the wrong way to address the challenges that we face -- the flat tax proposal introduced in Congress this past July. It is troubling both on revenue-raising and distributional grounds. • On revenue grounds, at the proposed 17 percent tax rate and standard deduction amounts, this proposal would lead to an estimated $138.3 billion revenue loss per year at 1996 income levels, or even more if transition rules are added. On distributional grounds, the proposal would lead to some small tax cut for single persons earning minimum wages, but sharply higher tax burdens for most other earners except the very highest income groups -- those who are already reaping the greatest gain from present economic trends. 7 • For example, while single, minimum wage earners would see tax liabilities decrease by $152, a married couple with $50,000 in wages, two children and employer-provided health insurance would see tax liability rise by $1,604. The tax increase would be above $2600 for two-earner married couples with two children. But for those twoearner couples with incomes of $200,000 plus about $12,000 in investment income, tax liability would decrease by some $3,469. A one-earner couple in which investment income was roughly a quarter of $212,000 in total income would see a nearly $11,000 tax reduction. • Distributional effects would be even worse if the proposal is made revenue neutral by raising the tax rate to near 21 percent. That would reduce Federal taxes for families with income of $200,000 or more by 28.1 percent, and increase taxes for families with income under $200,000 by between 5 and 70.7 percent. It would be a serious mistake for the United States to adopt a tax overhaul that would interfere with balancing the budget, whatever its other effects. Nor, given the ongoing trend towards greater inequality in market incomes would it be appropriate to move towards any tax system that substantially reduces tax burdens on the wealthy and raises them on those with low incomes, in the name of efficiency. This is the same laissez faire economics that has been tried and tested in the past. It failed then, and it can only break the momentum of our continued progress now. Conclusion Let me conclude where I began. The United States economy is moving forward. We are putting our fiscal house in order. We are opening the world economy to our exports, and we are doing better in international markets. In the aggregate, three years of wise management has left our economy stronger than it has been in 30 years. The challenge now is to strengthen the foundation for progress, while ensuring that all Americans have the tools and basis to succeed as we enter the next century. Thank you. -30- 8 D E P :\ I{ T :\1 E N T 0 F THE lREASURY T R E :\ S II I{ Y NEWS OFFICE OFPUBUCAFFAIRS-1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202)622-2960 EMBARGOED FROM WIRE MOVEMENT UNTIL SATURDAY, JANUARY 6,1995 AT 5:30 P.M. EST Text as Prepared for Delivery THE U.S. ECONOMY: PROGRESS AND PROSPECTS REMARKS OF DEPUTY SECRETARY LAWRENCE H. SUMMERS AMERICAN ECONOMICS ASSOCIATION JANUARY 6, 1995 Introduction I have two points that I want to make before you today. First, the outlook for the American economy is brighter than it has been at any time in my professional lifetime. That is partly the result of cyclical phenomena. But it is also the predictable result of the ways in which this Administration has managed the economy, and the ways in which we have supported American engagement in a dynamic global economy. Second, as we enter this election year the American people will be confronted with a clear choice. It will be a choice between laissez-faire government and appropriate government. It will be a choice between trickle down theories that have been tried and have failed to address the challenges that Americans are rightly thinking about -- rising inequality, the skills needed to compete in a global economy -- and an Administration that believes that government has a role to play in helping Americans meet these challenges. The American Economy Today Let me start with the state of the American economy today. In an aggregate sense, the U.S. economy is in better shape than it has been in several decades. We are enjoying a low inflation, investment led recovery for the first time since John F. Kennedy was President. RR-799 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 Removal Notice The item identified below has been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to copyright protections. Citation Information Document Type: Transcript Number of Pages Removed: 21 Author(s): Title: Date: NBC News "Meet the Press", Guests: Robert Rubin, Representative Tom DeLay (R-TX), Steve Forbes 1996-01-07 Journal: Volume: Page(s): URL: Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org D EPA R·T MEN T 0 F THE T REA SUR Y OFFICE OF PUBUCAFFAIRS -1500 PENNSYLVANlAAVENUE, NoWo - WASHINGTON, DoC. - 20220 - (202) 622-2960 FOR IMMEDIATE RELEASE January 8, 1996 Contact: Jon Murchinson (202) 622-2960 TREASURY POSTPONES 3- AND 6-MONTH AUCTIONS The Treasury Department announced this morning that it will postpone auctions of 3and 6-month bills scheduled for today, Monday, January 8, 1996 until tomorrow, Tuesday, January 9. The postponement is due to the severe snow storms in the northeast that have made it difficult for market makers to fully participate in the government securities market today. The Bureau of Public Debt will make an announcement later today with details of the new auction schedule. This announcement will not change the settlement date for these two securities. -30RR-800 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT TREASURY OF THE TREASURY NEWS ADV 8:30 AM. EST Text as prepared for delivery January 11, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN TO THE ASSOCIATION FOR A BEITER NEW YORK AND 1HE COMMITTEE FOR ECONOMIC DEVELOPMENT NEW YORK, NEW YORK There is a great debate under way in Washington about the future of this country -_ perhaps the most important public policy debate in 50 or 60 years. Though all of us who are involved must make every effort to get the budget conflict which reflects this debate resolved in short order, the debate itself will undoubtedly be central to the 1996 elections. The underlying debate is about differing visions of what will best serve our economy to compete and succeed globally, for the years and decades ahead, with rising living standards for all Americans. And it is a debate about what is the proper role of government in helping us realize those objectives. Both sides are committed to fiscal discipline and to balancing the budget. Beyond this, one vision, the president's vision, is built upon robust programs of education and training, in technology, in helping prepare children in poverty for the mainstream economy, and effective programs in Medicare and Medicaid and the like. The other, that of the congressional majority, entails relatively severe cuts in those areas, tax increases on the lowest wage working Americans by reducing the Earned Income Tax Credit, and large tax cuts that go primarily to the most affluent and which in my view do not have economic benefits commensurate with their cost. This debate is central to the future of our cities. And in my view the future of our cities is central to the future of our economy and our nation, and therefore the future of all Americans, no matter where they live or work. The budget debate has a high profile, but the problems of our cities does not, and should. Our responsibility in reviving the cities is clear: we must replace economic distress and criminal violence with economic opportunity and the freedom to live in security. RR-801 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 I deeply believe, and much more importantly so does the President, that the United States will fall far short of its full economic potential unless our cities are healthy. Critically, that means dealing effectively with the problems of our inner cities. This requires investing in human capital -- education and training. It requires increasing access to financial capital. And, it requires improving public safety. Consider the scope of our problems. The recent Committee for Economic Development report said that a third of the neighborhoods in our 100 largest cities are already distressed or in danger. The Census Bureau calculates that well over four in 10 Americans in poverty live in our inner cities. The Organization for Economic Cooperation and Development in Paris, the OECD, ranks us at the top of a list of 18 industrialized nations in income disparity. Moreover, the data in that study also tells us that poor children in the United States are poorer than the children in about all other Western industrialized nations. That is not a recipe for a healthy future for any of us. It will take a number of years and a comprehensive set of policy responses to do what needs to be done for the cities. Today, I want to focus on three issues within my portfolio as Treasury Secretary that can make a real difference: First, how the budget debate affects investment in education and the other areas of human capital. Second, how access to financial capital for residents of our cities can create jobs, opportunity and hope. And third, how we can create a safer environment in our cities by battling back against crime and especially gun violence. Additionally, I want to say a few words to the business community because it should be interested in these issues in two respects: one, in a purely hard-headed, pragmatic manner because of the impact of the future of our cities on the future of our economy; and two, because of the contribution business will have to make if our society is to deal with these problems of the cities effectively. The single-most important key in addressing urban issues is investing in people. Programs in education and training and health care and the like are at the center of our budget debate, including the programs primarily directed towards helping those in the inner cities and the other poor in our country move into the economic mainstream. For example, the president wants to invest an additional $35 billion in education and training over the next seven years. But the budget sent to him by the congressional majority cuts education and training by $31 billion over seven years. The president wants to extend Head Start to 50,000 additional children in seven years. The congressional majority sent him a budget cutting 180,000 children out of the program seven years from now. The list continues, and so do the differences between our robust program and the program of reductions -- in childhood immunization, public health, inner city summer jobs, child protection services, nutrition, basic and advanced skills assistance, and the refundable tax credit for lower income working Americans. 3 Investing in human capital is probably the most critical facet of addressing the needs of our inner cities, but there also is a shortage of financial capital in our inner cities. We believe transfer payments alone are not the answer and the answer lies in empowerment. I was in the South Bronx some months ago. It was remarkable. If you care about New York and you haven't been, you should go. I saw the resurgence of housing, not over one block but over an enormous area. And, I talked to business owners who had trouble getting capital, but did get the capital and are building businesses and creating jobs. Now, though, the very programs that were essential in the developing rebirth of the South Bronx are threatened in the budget debate. To cite some examples of threatened programs, there is the federal government's Community Development Financial Institutions Fund. The fund provides seed capital through loans, grants and equity investments to community based banks, credit unions, microenterprise lenders, and the like. These organizations make loans and investments to help small businesses and for housing, and they help people find jobs and start businesses. Three years ago this project had broad bipartisan support, but today it has been defunded by the congressional majority. We recently issued our first call for CDFIs and mainstream. financial institutions around the country to apply to the Fund for assistance and incentives, and the response thus far has been very encouraging. We cannot allow this very good program, grounded in an empowerment or capitalist response to the problems of the inner cities, to be destroyed The second example is the Community Reinvestment Act. The CRA encourages federally insured financial institutions to serve creditworthy borrowers in neighborhoods which have been either ignored or overlooked in the past, with no large bureaucracy and no taxpayer funding. This too is under attack, though we have so far successfully protected the CRA from the eviscerating attempts in Congress. Third, there is an additional approach, one which President and Mrs. Clinton are familiar with from Arkansas -- micro-enterprise lending. It has has had remarkable success in low income areas in other countries and might well here too if applied on a broad scale. Micro-enterprise lending is a highly cost-effective way to put money into the hands of entrepreneurs who need very limited amounts of capital, for example, lending someone who wants to start a tailor's shop enough money for a sewing machine, or lending a mechanic money for special tools to take on more complex and profitable repair jobs. In her trips through Asia and Latin America, Mrs. Clinton saw how successful this approach has been, and her report lent energy to our efforts. 4 President Clinton asked Treasury to launch a microenterprise project through the CDFI Fund, including the coordination of existing programs in other parts of the government. Moreover, at the president's direction, we are establishing a Presidential Award program so business foundations, community development corporations and others will compete for recognition in microenterprise lending just as large American corporations compete for the Baldrige Award. Fourth, there is the Low Income Housing Tax Credit to encourage investment in housing. As I went around the South Bronx, I kept hearing about the tax credit's critical role. On average, nationwide, there have been nearly 100,000 units a year of low income housing created with this credit since its enactment. The congressional majority wants to end the credit, which the Clinton Administration made permanent last year. Having said that, I want to tum for a moment to the role of the private sector as regards urban issues. A great many business leaders recognize that the problems of the inner cities affect all Americans, are critical to our economic future, and may well be our nation's most important domestic economic and social issue. Given the enormity of the problems, and the budget stringency of the years ahead under any circumstances, substantial, systematic and ongoing involvement of the business community is critical to bringing the inner cities and their residents into the economic mainstream. The Service Corps of Retired Executives is one example of individuals with business acumen offering assistance to up-and-coming entrepreneurs. Likewise, the National Executive Service Corps provides assistance to nonprofits. We have begun working with business organizations to help develop the necessary involvement of th~ private sector. I can tell you today that the International Executive Service Corps is now exploring ways to offer its expertise in our inner cities. For the past 30 years, this American-based organization has done ground-breaking work in 52 countries around the world, and it is now turning some of its attention to businesses in our inner cities. I want to thank the Corps and Hobart Gardiner, its CEO, for their leadership. By way of illustration, here are some of the ways that the business community can playa central role in revitalizing our cities: o Businesses can provide mentoring to start-up companies in the inner cities. o Businesses, institutional investors and foundations can provide financial support and business expertise to community development financial institutions in their areas. 5 o Businesses can become engaged with school-to-work programs, can help support local school systems, help schools develop practical business and job-skill related curricula. Businesses can also do as we have done in Treasury and our bureaus and throughout the federal government -- adopt schools. o Businesses can provide meaningful summer jobs for disadvantaged youths, jobs where they can learn what it means to work. Again, the active participation of the business community will be essential to meet the needs ·of our inner cities in the coming years. Let me end with a brief note on the topic of public safety. You can invest in human capital. You can make financial capital available. You can volunteer to help. But if you don't have public safety, it all isn't going to work. Crime is a broad issue, and I want to comment on just one facet of the administration's anti-crime efforts here today as it relates to my responsibilities as Treasury Secretary. To assist local police departments, Treasury's Bureau uof Alcohol, Tobacco and Firearms now has Firearms Trafficking Task Forces in each city where it has an office. The goal is simple: to disrupt the illicit gun market. We have new computer software that helps us look for patterns of gun-running. Our pilot project was here in New York. Indictments last month resulted the arrests of seven people we believe ran in excess of 350 guns into the city from Alabama. The New York Police Department has been a true national leader in attacking firearms violence. And the partnership between ATF and the New York Police Department is one of the reasons cited for the dramatic decline in gun crime here, and I hope that over the coming year we can develop similar partnerships in cities across the nation. The problem of gun violence is becoming particularly acute amongst this nation's young. In 1994, just under 50,000 people under the age of 18 were arrested on weapons charges. We are examining new ways to keep gun-pushers from putting guns in the hands of children. We are looking at ways to better find and pro~ecute gun-pushers. The idea of attacking the illicit supply of guns by arresting illegal sellers and traffickers is a new, preventive law enforcement strategy that we believe holds great promise. Just as there is a debate over the budget, there is also an important debate over law enforcement. Over the last three years the Brady Law was enacted, and the assault weapons ban was enacted. But there are now strong efforts to roll back these gains. Just as is the case with the economic programs critical to our cities, we cannot permit a rollback of the gains in law enforcement. 6 In closing, we all have a vital stake in our cities, no matter where we live or work, because -- as I said at the outset -- our nation will fall far short of its economic potential unless we deal effectively with the challenges facing our inner cities. It is my view, and more importantly it is the president's view, that preparing our inner cities for the mainstream economy requires robust programs of investment in human capital -- in education, training, childhood immunization and the like. Moreover, programs that provide access to financial capital, and that increase public safety, are absolutely essential toward realizing our economic potential. I also believe that with respect to the cities the private sector will have to play an important role if the job is to be done. If you look at the economies of Asia that are probably the greatest economic success stories the world has seen in the last 20 years, and if you think of the nations we'll be competing with in the 21st century, I don't see how we can be successfull if we don't have the kinds of robust programs I have discussed today, both in the inner city and more generally in the country. And these programs are at the core of the budget debate. I have a great deal on my agenda at the Treasury Department -- the budget, taxes and our international economic relations. Since I started at the White House three years ago I've worked in all these areas, and throughout I've kept in mind the essential role of our cities and the particular problems of our inner cities. I believe that as we deal with the broader policy debate that will occupy us through this election year, the role and needs of our cities should be central in our discussions. Thank you. -30- DEPARTMENT NEWS OF THE ;l.'~\ .;~ ~ '<' J78q~ 't'/ TREASURY CLIPS "Ii"""""1I .................... Compiled ill the Office of Public Affairs Contact: Chris Peacock Darren McKinney (202) 622-2960 FOR IMMEDIATE RELEASE January 11, 1996 TREASURY SECRETARY TO VISIT DETROIT SUNDAY Treasury Secretary Robert Rubin and Congressman John Conyers will announce Sunday that the Detroit Police Department will begin implementing CEASEFIRE, a Bureau of Alcohol, Tobacco and Firearms program using state-of-the-art computer ballistics technology in the investigation of firearms-related crime. The announcement is scheduled for 2:30p.m. this Sunday, January 14, 1996, in the third floor conference room at Detroit Police Headquarters, 1300 Beaubien Street, in downtown Detroit. The Secretary and Congressman will be joined by ATF Director John Magaw, Detroit Mayor Dennis Archer, Detroit Chief of Police Isaiah McKinnon and other government and law enforcement officials from the Detroit region. -30Additional Contacts: Congressman Conyers' Office: Ray Plowden pager (313)660-7288 ATF Detroit: Vera Fedorak (313)393-6057 pager (313)201-4040 Detroit Police Department: George Clarkson (313) 596-2200 RR-802 1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960 @ DEPARTMENT OF THE TREASURY TREASURY NEWS "~~~~~"""""""""""~~/78~9~"""""""""""""""""1II OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622-2960 Embargoed Until 4 PM (ET) January 12, 1996 Contact: caIVln Mitchell (202) 622-2920 TREASURY COMMENTS ON "SHORT AGAINST THE BOX" PROPOSAL Proposals re,ardin& "short cgainst the box" and. other similar-transactions are being considered as part of the ongoing budget negotiationS. Today, Treasury provided a description of one such proposal. The provision, which was included in one of the budget packages under discussion, is aimed at tax-defeml techniques commorily referred to as nshort against the box" transactions and other transactions, such as "equity swaps,· that accomplish comparable results. DESCRIPTION The proposal would require a taxpayer to reco&nize eain (but not loss) upon entering into a constructive sale of any appreciated position in either stock, a debt instrument, or a partnership interest. A taxpayer would be treated as malc:ing a constructive sale of an appreciated position when the taxpayer (or, in certain limited circumstances. a person related to the taxpayer) subSWltially eliminates risk of loss and opportunity for gain by entering into one or more positions with respect to the same or substantially identical property. For example, a taxpayer that holds appreciated stock and enters into a shott sale with respect to that stock (a short against the box) or an equity swap with regard to the stock would recognize any gain on the stock. Similarly, a taxpayer that holds appreciated stock and ,rants a call option or enters into a put option on the stock would generally recogni2e gain on the stock if there is a substantial certainty that the option will be exercised. In addition, a taxpayer would recognize gain on an apprcciated position in stock, debt or partnershjp interests if the taxpayer entered into a transaction Utat is marketed or sold as substantially eliminating the risk of loss and opportunity for gain. The taxpayer would recognize gain in a constructive sale as if the position were sold and immediately repurchased. An appropriate adjustment (such as an increase in the basis of the position) would be made for gain recognized on the constructive sale, and a new holding period would be&in as if the taxpayer had acquired the position on the date of the constructive sale. RR-803 (more) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 -2- If 'the taxpayer ,makes a constructive, sale of less, than all of his or her 'appreciated positions in a particular property, the proposal would trigger pin 'reeopltion in the order' the positions were acquired or entered into.' If the taxpayer actually disposed of a position previously constructively ~ld, the offsetting ~tions Creating the ~ve sale Still held by the taxpayer would be'treated as' causini a new constructive sale 'of appreciated positions in substantially ideJltical property; if any, the taxpayer holds at that time. ,The proposal would not apply to any contract fo~, the 'sale of any stock, debt instrument or partnership interest that is not ~ marketable ~ty (as defined under the rul~ that apply tcdnstallment sales) if the sale '0CQl[s within one, of the date the, contract is , entered into. In 'addition" the propoaal 'would nOt treat a transaction as i ~structive' sale. if, the taxPayer is requ~ to mark, to market the appreciated financial 'position under scc,tion 475 (mark to market Jor securities 4ealers) or Section 1256 (mark to market :for futureS : contrac~, options and currency contracts). ' year TheproposSl Would be effective for constructive sales entered into after'the proposal is' enacted. In additionttbe proposal would apply to (X)nstruetive sales entered into after January 12, 1996, 'and before the date of enaciment that are not closed before 30 days after 'the date of enactment; the proposal would apply to su~h transactions as if the constructive salesoccUIIed on the date that is 30 days atte:r the date of enactment A special rule is included, for c;onstructive sales entered intO on or before the date of enactment by decedents dying after ,the date of enactment.. If the constructive ,sale remains open on the day bcf~ the date of death and gain bas not beei1 recogrti.Zed under this provision, the positions constituting the Constructive sale are treated as property constituting , tights'to receive income,in IeSl*t of a dece4ent Under section 691. -30-' DEPARTMENT OF THE TREASURY ~~/781q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .................................. OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 ADY 2:30 P.M. EST Remarks as prepared for delivery January 14, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN CEASEFIRE PRESENTATION/DETROIT POllCE DEPARTMENT DETROIT, MICmGAN I'm pleased to be able to share in today's announcement about an important advance in crime solving here in the Detroit area. We've been seeing some very encouraging figures lately about crime -- not just here in Detroit but across the country. The homicide rate in Detroit is down 17 percent from 1993 to last year. In New York City, 1,000 fewer people were murdered last year than in 1991. Back in Washington, the homicide rate has come down 23 percent over the past two years. There are a great many reasons that these numbers are corning down. I believe the Clinton Administration's aggressive approach to law enforcement must be counted among the factors. If you look at what's gone on the books so far, I believe there is a very clear correlation. Since 1993 we've seen the Brady Law require a waiting period for handgun purchases. The assault weapons ban has been enacted. And a very tough crime bill that puts police officers back out on the streets in community policing has begun to take effect. I think we're seeing the results in the crime statistics that are coming out. And I would not want to see any of the progress we've made rolled back by those who, for instance, want the assault weapons ban overturned. I would add that Congressman Conyers has been a very valued supporter of this administration's initiatives, and of the ATF, and we very much appreciate the contribution he has made to law enforcement. (more) RR-804 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 Our approach to law enforcement and public safety has many facets, and making use of the latest in technology is one of them. The Bureau of Alcohol, Tobacco and Firearms -- in partnership with the private sector -- has developed a significant technical capacity for investigating firearms crimes, and the Ceasefire program is one of them. This is the sixth city where the ATF has teamed with local law enforcement to put Ceasefire into effect. One of the hallmarks of the ATF -- and I know Director Magaw feels very strongly about this -- is the ATFs reputation for cooperative work with local law enforcement authorities to stop gun-nmning, to get illegal guns off the streets, and to keep weapons out of the hands of youngsters. The system being installed here will be made available to other jurisdictions in the Detroit area, so the impact of this technology will be amplified. And down the road we plan to add two more Ceasefire sites to fight crime in Michigan. I'll leave the scientific description to the experts. But the Ceasefire computer system can do in a few hours what otherwise might take a ballistic expert years and years. Very simply put, it can help you find a needle in a haystack. If you can tie bullets or shell casings from different crimes to a particular gun, and you find that weapon, that significantly increases the chances you've found the criminal. Ceasefire is solving crimes across this country, and ultimately, that means that Ceasefire is saving lives. I am confident it can solve crimes and save lives in Detroit. Thank you. -30- UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Was1.'Jfi t,,_·.. g ton,, FOR IMMEDIATE RELEASE January 16, 1996 DC 2021gJ \ -- CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $12,540 million of 13-week bills to be issued January 18, 1996 and to mature April 18, 1996 were accepted today (CUSIP: 912794Y32). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 5.00% 5.02% 5.02% Investment Rate 5.15% 5.17% 5.17% Price 98.736 98.731 98.731 Tenders at the high discount rate were allotted 43%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS RR-80S Received $47,959,820 Accegted $12,540,217 $42,627,815 1,500,945 $44,128,760 $7,208,212 1,500,945 $8,709,157 3,706,960 3,706,960 124,100 $47,959,820 124,100 $12,540,217 UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washi'1gJOn, DC 20239 FOR IMMEDIATE RELEASE January 16, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $12,522 million of 26-week bills to be issued January 18, 1996 and to mature July 18, 1996 were accepted today (CUSIP: 9127943AO). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.92% 4.93% 4.93% Investment Rate 5.13% 5.14% 5.14% Price 97.513 97.508 97.508 Tenders at the high discount rate were allotted 16%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS RR-806 Received $51,345,905 AcceQted $12,521,666 $44,396,484 1,461,121 $45,857,605 $5,572,245 1,461,121 $7,033,366 3,500,000 3,500,000 1,988,300 $51,345,905 1,988,300 $12,521,666 DEPARTMENT OF THE TREASURY NEWS TREASURY omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960 FOR RELEASE AT 2:30 P.M. January 16, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series of Treasury bills totaling approximately $23,000 million, to be issued January 25, 1996. This offering will result in a paydown for the Treasury of about $4,400 million, as the maturing bills total $27,405 million (including the 83-day cash management bill issued November 3, 1995, in the amount of $8,061 million). Federal Reserve Banks hold $6,033 million of bills for their own accounts in the maturing issues. These may be refunded at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $3,915 million of the maturing issues as agents for foreign and international monetary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-807 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED JANUARY 25, 1996 January 16, 1996 Amount . $11,500 million $11,500 million Description of Offering: Term and type of security cnSIP number Auction date Issue date Maturity date Original issue date Currently outstanding Minimum bid amount Multiples . 91-day bill 912794 Y4 0 January 22, 1996 January 25, 1996 April 25, 1996 October 26, 1995 $13,042 million $10,000 $ 1,000 182-day bill 912794 Z6 4 January 22, 1996 January 25, 1996 July 25, 1996 July 27, 1995 $18,359 million $10,000 $ 1,000 O~fering The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date DEPARTMENT OF THE TREASURY NEWS TREASURY omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 17, 1996 Contact: Chris Peacock Darren McKinnev (202 )f>22-2960 STATEMENT OF SECRETARY ROBERT E. RUBIN ON TERRORIST CONSPIRACY SENTENCES I applaud the sentences handed down today in the New York bombing and assassination plots and the earlier breakthrough investigative work by Bureau of Alcohol, Tobacco and Firearms agents in the case. ATF played an invaluable role investigating the deadly 1993 blast at the World Trade Center, and it was that successful investigation that led to prosecution of these additional conspiracy charges and the prevention of further human tragedy. I commend as well the leading efforts of the Justice Department and FBI in the investigation and prosecution of this most significant case against terrorism. Victims of the Trade Center homhing included agents and employees of the U.S. Customs Service and Secret Service based in New York. Today, they can join their families and all Americans who are taking solace in the knowledge that justice has heen served. Federal law enforcement will continue to work diligently with local and international authorities in preventing and punishing acts of terrorism. -30- RR-gOg For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 ~ DEPARTMENT OF THE TREASURY NEWS TREASURY omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 17, 1996 Contact: Michelle Smith (202) 622-2960 MEDIA ADVISORY Treasury Secretary Robert E. Rubin will hold a pre-G-7 press conference at noon tomorrow, Thursday, January 18, in the large conference room of the Treasury Department, room 3327, 1500 Pennsylvania Avenue, N.W. Cameras should be in place by I l:30 a.m. • t.. • .~ ~. Secretary Rubin and Deputy Secretary Lawrence H. Summers will travel·to Paris for the G-7 Finance Ministers meeting on Saturday, January 20. Media without Treasury, White House, State, Defense or Congressional credentials planning to attend should contact the Office of Public Affairs at (202) 622-2960, with the following information: name, social security number and date of birth, by 10 a.m. tomorrow, January 18. This information can be faxed to (202) 622-1999. RR-809 -30- For press releases, speeches, public schedules and official bio,l.,rraphies, call ollr 2.J·hollr fax line at (202) 622-2040 DEPARTMENT OF THE TREASURY NEWS TREASURY ~iI78~q~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ...................................... OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 17, 1996 STATEMENT BY TREASURY SECRETARY ROBERT E. RUBIN ON THE KEMP COMMISSION REPORT The President supports efforts to simplify our tax system, but he also 'insists that any proposal meet the test of being both fair to working families ~nd deficit neutral. So far, no Republican flat tax proposal has met this test. Although a flat tax looks' appealing at first glance, every Republican flat tax we have seen either explodes the deficit or raises income taxes on middle income families. The tax commission appointed by the Republican leadership is vague on specifics, but it is clear that it offers no solution to how such a flat tax proposal can avoid either raising income taxes on working families or exploding the deficit. Taking the latest Armey flat tax as a model, it would add $138 billion per year to the deficit, or over $1 trillion in a 7 year period. Assuming the Republicans stick to their goal of balancing the budget, their flat tax would raise income taxes on middle income Americans in order to pay for lowering taxes on those making over $200,000 a year. The Armey flat tax would exempt all interest and dividend income from any tax, while increasing income taxes on working families, taxing health henefits, and eliminating the deduction for home mortgage interest. -30RR-81O For press releases, ,\peeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 UBLIC DEBT NEWS Department ofrhe Treast.::'y • Bureau ofrhe Public Debr • Washmgton, DC 20239 FOR RELEASE AT 2:30 P.M. January 17, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY TO AUCTION 2-YEAR AND 5-YEAR NOTES TOTALING $30,250 MILLION The Treasury will auction $18,250 million of 2-year notes and $12,000 million of 5-year notes to refund $26,245 million of publicly-held securities maturing January 31, 1996, and to raise about $4,000 million new cash. In addition to the public holdings, Federal Reserve Banks hold $1,607 million of the maturing securities for their own accounts, which may be refunded by issuing additional amounts of the new securities. The maturing securities held by the public include $2,376 million held by Federal Reserve Banks as agents for foreign and international monetary authorities. Due to the Treasurv's need to avoid exceeding the debt limit, no additional notes will be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. Maturing notes held 'by Federal Reserve Banks as agents for such accounts may be rolled over on a noncompetitive basis within the public offering amounts. Both the 2-year and 5-year note auctions will be conducted All competitive and in the single-price auction format. noncompetitive awards will be at the highest yield of accepted competitive tenders. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-811 HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC OF 2-YEAR AND 5-YEAR NOTES TO BE ISSUED JANUARY 31, 1996 January 17, 1996 Offering Amount . Description of Offering: Term and type of security Series CUSIP number Auction date Issue date Dated date Maturity date Interest rate Yield . Interest payment dates. Minimum bid amount Multiples . Accrued interest payable by investor Premium or discount . $18,250 million 2-year notes AB-1998 912827 W5 7 January 23, 1996 January 31, 1996 January 31, 1996 January 31, 1998 Determined based on the highest accepted bid Determined at auction .July 31 and January 31 $12,000 million 5-year notes E-2001 912827 W6 5 January 24, 1996 January 31, 1996 January 31, 1996 January 31, 2001 Determined based on the highest accepted bid Determined at auction July 31 and January 31 $5,000 $1,000 $1,000 $1,000 None Determined at auction None Determined at auction The followinq rules apply to all securities mentioned above: Submission of Bids: Accepted in full up to $5,000,000 at the highest accepted yield Noncompetitive bids (1) Must be expressed as a yield with three decimals, e.g., 7.123% Competitive bids (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all yields, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid 35% of public offering at a Single Yield 35% of public offering Maximum Award . Receipt of Tenders: Prior to 12:00 noon Eastern Standard time on auction day Noncompetitive tenders Prior to 1:00 p.m. Eastern Standard time on auction day Competitive tenders Full payment with tender or by charge to a funds account at a Payment Terms . Federal Reserve Bank on issue date DEPARTMENT TREASURY OF THE TREASURY NEWS ~~/78~q~. . . . . . . . . . . . . . . .. . .................. OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 EMBARGOED MATERIAL RELEASE TO BE SET AT BRIEFING Remarks as prepared for delivery January 18, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN PRE-G7 PRESS CONFERENCE. I'll deal with the issues of this coming weekend in the order in which they'll arise. First, Spain: I'm making a brief stop in Madrid to discuss a variety of issues with Prime Minister Gonzales and Finance Minister Solbes. In my discussions both with government leaders and the business community I will re-emphasize the President's message of last month that we are very concerned about what occurs in Europe because of our strong economic ties. Europe is in the process of far-reaching economic changes. These changes are important to the United States, and Spain provides a good window on these developments. Spain offers that window in part because it is outside the G-7 and sees these developments in a very useful and different perspective than the four European members of the G-7, and partly because Spain has just completed a term as president of the European Union. In addition, Spain has been involved for some time now in economic liberalization. I would add that we have spent the last few years in this administration reaching out to significant players in the world economy beyond the G-7, and this trip is part of that effort. Second, the G-7. We'll have on our agenda the economic outlook, including developments related to Maastrict, the followup work from the Halifax Summit, and matters involving Russia and Bosnia. To set the scene for you, the consensus of private economists shows steady growth in the G-7 in 1996. RR-812 (more) Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 Since our last meeting conditions have improved somewhat in Japan but softened a bit in Europe. Saturday we'll have the chance to examine what policies are appropriate to reinforce the recovery, and thus provide a stronger basis for the structural changes necessary both for the future of Japan and for the European continent. Moreover, I would note that the excellent performance of inflation in the economies of the United States, Germany and Japan offers some room to respond to slower growth if that proves necessary. In the United States we are in good shape and appear to be on track for continued solid growth. The economic policies we have pursued for the past three years have contributed to the fact that we lead the G-7 in the critical areas of reducing government deficits, and improving economic and employment growth. Financial market developments since our last meeting have been generally quite favorable. I believe the strength of our stock and bond markets reflects confidence about our economic prospects. In Paris we will assess progress on the Halifax agenda for strengthening the financial system and improving the effectiveness of the multilateral development banks. There is a great deal of work under way in response to the reforms we proposed and the 0-7 adopted at Halifax. These include very important efforts at the International Monetary Fund to strengthen disclosure, various G-lO efforts to improve our capacity to deal with sovereign liquidity crises and strengthen financial market supervision, and the development committee task force where we are focussing on valuable reforms to the World Bank and the regional development banks. During our G-7 meeting we'll evaluate what has been done so far and decide where we need to reinforce the process to get the desired results. I anticipate some discussion of the transformation of Russia's economy. Russia's performance in 1995 was very strong. Inflation was brought down to a post-independence low, the ruble strengthened and then stabilized, and output is poised to grow. Anatoly Chubais played an extremely constructive and welcome role in these achievements. In Paris, we will emphasize how critical it is for Russia to stick firmly to the reform path followed in 1995 and continue its constructive relationship with the International Monetary Fund. On Bosnia, promoting reform and reconstruction is key to building on the peace agreement negotiated by President Clinton. It is thus critical that each member of the international community do its utmost, within its means, to ensure success. The Brussels Conference was a good first step and certainly we in the United States are doing our part. We also are very appreciative of the energetic role the IMF and World Bank have played and look forward to continued intensive efforts in the period ahead. 3 In closing, I want to say just a word about the G-7 process. I have been directly involved for a year now, and I believe it has been a productive year for the G-7. Since my introduction to the process in Toronto last year the Mexico crisis has been substantially improved. Many have expressed skepticism about the cohesion of the G-7, but I believe the past year has clearly demonstrated how the G-7 nations can successfully cooperate. I would add that although I do not anticipate a communique, Saturday'S agenda touches on some very important issues -- the state of the various economies, the postHalifax work, and Russia and Bosnia. I find the G-7 process to be very useful, irrespective of whether any particular action is taken or a communique issued. When you bring the finance ministers and central bank governors of the G-7 nations together every three months or so to exchange views about various economic matters, it allows each nation to understand the others perspective and provides a framework when action is needed. Beyond that, it gives me a better sense of developments around the world and that's important when dealing with our own economic policy. Thank you. -30- DEPARTMENT OF THE TREASURY ~178~9. . . . . . . . . . . . . ._ . . . . . . . . . . . . . . OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE January 18, 1996 Contact: Jon Murchinson (202) 622-2960 G- 7 PRESS BRIEFING TIME CHANGE Treasury Secretary Robert E. Rubin's pre-G-7 press briefing will be held today at 12:30 p.m., instead of noon, in room 3327 of the Treasury Department Cameras should be in place by noon. Media without Treasury, White House, State, Defense or Congressional credentials wishing to attend should contact the Office of Public Affairs at (202) 622-2960, with the following information: name, Social Security number and date of birth, Qy 11 a.m. today. This information can be faxed to (202) 622-1999. -30- RR-813 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT TREASURY OF THE TREASURY NEWS ~iI78~q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ...................................... OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 17. 1996 Contact: Calvin Mitchell (~O~) 62~-2(20) U.S.-FRANCE INCOME TAX TREATY ENTERS INTO FORCE The Treasury Department announced Wednesday that a nevy' income tax treaty between the United States and France entered into force on December 30. 1995. The new treaty replaces the one signed in 1967 and amended by protocols signed in 1970. 1978. 1984 and 1988. The provisions with respect to taxes withheld on dividends. interest and royalties and the U.S. excise tax on premiums paid to French insurers or reinsurers generally will take effect for amounts paid or credited on or after February 1. 1996. However. the provisions concerning the reduced French dividend tax credit (avoir fiscal) have effect for dividends paid or credited on or after January 1. 1991. Similarly. the provisions for French withholding taxes on royalties have effect for royalties paid or credited on or after January 1. 1991. For other income taxes. the Convention is effective for taxable periods beginning on or after January 1. 1996. For other taxes. e.g .. the French wealth tax or the French tax on stock exchange transactions. the Convention applies to taxable events occurring on or after January I, 1996. Assistant Secretary (Tax Policy) Leslie Samuels stated. "I am pleased that with the ratification of the French treaty, the protocols and treaties that were approved by the Senate last summer have been ratified in time for each agreement to enter into force by the end of 1995. The protocols with Canada and Mexico and the treaties with PortugaL Sweden. and France continue our efforts to modernize and expand our treaty network. which now includes every country in the European Union. We are working to resolve the bank secrecy concerns that have prevented us from bringing our proposed treaties with Kazakstan and Ukraine into force." -30- RR-814 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 UBLIC DEBT NEWS O':piolrtmc:nt of the Trc:£su r )' • FOR IMMEDIATE Bur<.:nu of the Public Dcbt • Wa~hingtQn, DC 10239 RELEAS~ CUNTACT: utt1ce of FinanCing 202-219-3350 January 9, 1996 1ti;~UL'1'~ O~' TREASURY' ~ AUCTION OF 13 -WEEK BILL~ Tenders for $11,065 million of 13-week bill~ to be issued Janua.ry 11, 1996 and to matnre AprH 11, 1996 wp.rp. accepted today (COSIP:912794Y24). RANGE OF ACCEPTED COM~E1I1IVE BIOS: Di:5co\mt Low High Avera.ge Rati 5.01% 5.04% S.03'" Inve:5tment R~ti Prit:1i 5.16% 5.19\' 98.734 90.726 99.729 S.lS'" Tenders at the high discount race were allotted 40~. r.te i . the equiv.lent coupon-issui yilild. ~he inve~tment TENDERS RECEIVED AND ACCEPTED (in thousands) .&ece1~ed TOTALS 8~~!;~t.!;~ ~44,8a4,545 $~4,O64,~4~ $40,096,706 1. :PJ 1 617 $9,276,706 Type Comp.::t:lt:.ive Noncompetitive ~llhtot':R.1, Public Federal Reeerve For~ign Official Iu:sl..ll.ul..l.uu::; TOTALS RR-815 ld;7~.§.7 S41,670,325 SlO,!;~O,:;:l" 3,113,720 3,113,720 100.500 $11,991,515 $11.,061.,515 100 1 500 UBLIC DEBT NEWS • Ikp"rrm"nr nflh.: Treasury • Bureau ofthl: Public Debt • WOl~hington, DC 20239 FOR IMMEDIATE RE~E~~E January 9, 199G CON'1'ACl': O!tice o! Financing 202·219-3350 Tenders for $14,081 million of 26-wQQk bills to be iGsued 11. 1~~6 and to mature July 11, 1996 were accepted today (CUSIP: 9127942Z6). January RANGE OF ACCEPTED COMPETITIVE BIDS: Diccou.nt Invc~tmcnt ~~t-~ ~;;ItP. 5.00% 5.02% 5.02t 5.22% 5.24% Low High Average S.24t Price 97.472 97.462 97.462 Tenders at the high discount rate were allotted 70~. The inv4itstment rate is: 1:h.. equivalent: coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Re~e1Y~~ AC~e:Q~~Q $~8,5!:i4,929 $14,061,381 ~S2,101,417 ~7,627,869 1,~32,712 '.I.ype COInpetitiv~ Noncompetitive !:iubcocal, t'ublic Feder.l RQ&erve ~oreign Otticial Illstitutions TO'I'1\LS RR-816 11~~9,712 l:l~ S~,~6'1,~!:!1 3,400,000 3,400,000 S~:L 441, 1. :Zl3 • ~QQ $59,551,929 1.71~.aQQ $11,091,391 DEPARTMENT OF THE TREASURY NEWS TREASURY omCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 9, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series cf ~~easury bills tOc.aling approximately $25,000 million, to be issl1 P ' :: ......duary 18, 1996. This offering will result in a paydown for the Treasury of about $2,450 million, as the maturing weekly bills are outstanding in the amount of $27,461 million. Federal Reserve Banks hold $7,207 million of the maturing bills for their own accounts, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $2,598 million of the maturing bills as agents for foreign and international monetary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Due to the public debt limit and Treasury's need to plan for the debt level. additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR 817 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED JANUARY 18, 1996 January 9, 1996 Offering Amount . . . . . Description of Offering: Term and type of security . . . . . CUSIP number . . . Auction date . . . . . . . . . Issue date . . . . . . Maturity date Original issue date . . Currently outstanding . . . Minimum bid amount . . . Multiples . . . . . . . $12,500 million $12,500 million 91-day bill 912794 Y3 2 January 16, 1996 January 18, 1996 April 18, 1996 October 19, 1995 $13,061 million $10,000 $ 1,000 182-day bill 912794 3A 0 January 16, 1996 January 18, 1996 July 18, 1996 January 18, 1996 $10,000 $ 1,000 The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Maximum Recognized Bid at a Single Yield Maximum Award . . . . . Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . . . . . . . . . . . Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $~ billion or greater. (3) Net long position aust be determined as of one half-hour prio~ to the closing time for receipt of competitive tenders. 35% of public offering 35% of public offerin~T Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date DEPARTMENT OF THE TREASURY NEWS TREASURY ..............................~j/78r9~.............................. OFFICE OF PUBUC AFFAIRS ·1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 Policies for a Global Economy Remarks by Jeffrey Shafer Under Secretary of the Treasury for International Affairs Bankers Association for Foreign Trade January 18, 1996 Introduction I am delighted to be here this evening. The Bankers Association for Foreign Trade has long been an important proponent of American efforts to foster trade liberalization, cement market opening, and anchor economic reform worldwide. These are among the most important things that the U.S. government can do to maintain prosperity here at home, and bolster economic opportunities and stability overseas. At a time when ideas about liberalization and free trade are to some degree under attack in the United States, it is tremendously important that groups such as yours continue to spread a pro-liberalization message. With the emergence of a global economy, the benefits that liberalization can afford are greater today than they were even a few years ago. The growth in global trade, and the explosion in global finance that we have seen in recent years means that nations have a greater stake in one another's economic and financial policies. Mexico's experience, and the ways that experience reverberated in other emerging markets and was felt even in our own economy, illustrated that nations have a common interest in dealing with financial crises, and promoting growth and reform throughout the world. -MORE- RR-818 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 Some seek to shut out the new global economy. Whether in recent calls for a halt to new trade agreements, or full-scale demands for protectionism, voices of economic nationalism of a form not in fashion since the 1920s are growing louder. Such policies were disastrous for America then, and they would be disastrous for America today. Our prosperity and our security depend on the global economy. Exports have boosted our economy, growing twice as fast as GDP since 1992. Nothing can do more to cement our own security than ensuring that sensitive regions from Latin America to the lands of the former Warsaw Pact join the global economy successfully. As I said, it is very important for groups like yours -that appreciate the value of global trade in goods and services, and know that we need U.S. leadership and engagement to get there -- to spread your point of view. Financial services is, of course, at the heart of Treasury's market-opening agenda. There is no better way for emerging markets to anchor growth than by making sure they have vibrant capital markets and sound banking systems -- open to the best products available on the globe. American firms lead the way in many financial services, so liberalization offers you enormous opportunities. I will speak about what we have accomplished in liberalizing financial services, and how we will continue to make progress over the next few years. Supporting Economic Reform Let me first take a step back and start with the U.S. international economic objective that is really the foundation for everything we are trying to accomplish: supporting marketbased economic reforms. When historians look back on our era, it may not be the end of the ideological struggle between two empires that stands out as the most salient event. Rather, they may look to the unprecedented embrace of market-based economics as the truly seismic shift in human affairs. It is a shift that has placed billions of people on the road to prosperity, and will stabilize regions where conflict was once the norm. Of course, it will also offer enormous economic opportunities for the United States. I just returned this afternoon from a trip to Egypt. There I joined Vice President Gore for meetings with President Mubarak, his economic policy team, and representatives of the U.S. and Egyptian business communities. The context for our visit was the chance for peace in that troubled part of the world. But almost all our talk centered on how Egypt can achieve sustainable economic growth. Egypt's leadership realizes that unleashing the private sector is the only way. Deregulation, opening up to trade and investment, privatizing and developing financial markets -- this is a big step for them. But they are ready to take it, because they see an opportunity that may not come again if lost. What can the United States do to make sure that Egypt and other countries make it, so that the turn toward the market does not reverse? Some think we needn't to do anything. They believe that the power of free markets -- and free-markets alone -- can do the work of spreading democracy, convincing countries to scale back barriers to trade, and carrying beleaguered societies to prosperity. 2 I think that such a view of economic development is overly optimistic. As businesspeople who participate in the global economy, you know that the path from statism to the market is not an easy one. Social and economic shocks can erupt along the way. Even during the best of times, both public and private involvement are needed to redesign a taxcode, or build bridges, or finance any of the enormous variety of public goods which provide the foundation for market capitalism. There are also great opportunities for U.S. businessmen getting involved. U.S. Leadership in International Financial Institutions That understanding of what markets can and cannot accomplish on their own has been at the heart of American foreign economic policy over the past half-century. The World Bank and the IMF have been key instruments in taking this message to all corners of the globe, especially over the past 15 years. Many of the emerging markets which are most important for your industry -- Korea, Chile, Indonesia, and over a dozen more rapidly-developing countries -- have seen their economies jump-started and bolstered with the help of development bank programs conditioned on market-based reform. To cite just one recent example, nearly $2.0 billion in average annual World Bank and International Development Association (IDA) support for India since 1991 helped foster a revolution in Indian economic policy, bringing Indian tariffs down from 87 to 27 percent, and boosting the country's growth rate up to near 6 percent yearly. That is more tariff reduction than we won in the GATT. From Mexico to Poland, some 75 countries have received $35 billion in World Bank loans from 1981 to 1993 that were conditioned on trade and investment liberalization. U.S. exports to these countries rose an average of almost 12 percent yearly, creating an extra 850,000 jobs for Americans. These are jobs we would never have seen had these countries not taken the market-reform path. Bolstering Developing-Country Banking Systems Bolstering economic reforms involves strengthening countries' banking sectors -- to intermediate investments better and protect against economic shocks. Both multilateral and bilateral U.S. support programs are doing that job. The World Bank and EBRD have taken the lead in modernizing former Soviet Union banking systems and introducing modern regulation and supervisory practices. In Argentina, a $500 million World Bank and IDB loan is helping to restructure that country's financial system. I could give many more examples of that kind of multilateral support for banking reform. 3 The United States government is matching many of these efforts through bilateral assistance. The U.S. provided $200 million to the $415 million Polish Bank Privatization Fund. Three Treasury advisors on the ground in Poland are making sure that process is working smoothly. We've also got privatization and regulatory advisors in Romania, Albania, and Hungary. And in Egypt, the Federal Reserve, the SEC and Treasury are developing plans for cooperation with Egyptian authorities on financial market development, with strong support from US AID . At a time of domestic fiscal restraint, it is well and proper to think about how much we spend on international economic objectives. Nonetheless, there can be no more important task than judicious use of financial support -- both multilaterally and bilaterally -- to create the financial infrastructure for market-based reform. That's why Treasury and USAID are supporting banking sector reform in transition economies. This is money well spent. As for multilateral support through the World Bank and regional development banks, believers in value for money should appreciate the payoff from carrying out much of our foreign economic policy through institutions that lever scarce resources, and which can therefore provide roughly four times more support than the United States does alone. Our values are reflected in their policies. Protecting Against Economic Shock There is a second way in which we can further market-based development on which American jobs and overseas opportunities for U.S. industries rest. As we saw this past year in Mexico, markets can shift from indulgent to demanding overnight. Shocks can knock whole economies off course. Global finance has to work better, if crises are to be prevented, and stable growth is to be secure. A place to start is with transparency. Internationally accepted disclosure standards for countries are more important than any government loan. Disclosure can ensure that both market and official monitors have the information needed to keep economies under scrutiny, recognize dangers early, and signal the need for action before crises erupt. President Clinton and the other G-7 leaders agreed to push ahead with this agenda at the Halifax Summit last June. The IMF is now working to draw-up standardized measures of information that national governments and agencies should release, so that the market can respond sooner and hopefully less violently to signs that a country's finances are off course. 4 Even with transparency and surveillance, difficulties will arise. We would like countries to follow textbook policies as they move from closed to open markets. But the path will not be an easy one. Even with the best of economic policies, liquidity crises can erupt. The speed and size of today' s global capital markets means that the need for resources to halt such crises is greater than ever. That is why the G-lO countries are working to increase resources beyond those available to the IMF through the General Arrangements to Borrow. But investors and borrowers will have to work-out the aftermath of future crises, if they cannot be avoided. This area is also being looked at. Free Trade in Financial Services Trade is a second priority. As we help to create and grow markets, we want to be in them. Free trade in financial services is of course a big part of this. Telling this audience why financial services are so important for our welfare is like preaching to the converted. To put it simply, it is one of the sectors in which we are truly global leaders, and where our business is growing by leaps and bounds. Major players in financial services accounted for over 1/4 of the largest 50 Fortune 500 corporations. By end-1994, financial services exports (excluding insurance) had reached nearly $7 billion, more than double 1986 levels. Ensuring an open market for financial services is about more than just business opportunities. Nations can only reach their economic potential if they channel investment and capital efficiently. Countries which maintain barriers to the best international firms are losing out on the techniques and methods they need to grow. Think of East Asia, which the World Bank estimates will need some $1.5 trillion in infrastructure investment, excluding Japan, between 1996 and 2004. Or the Japanese financial system, which is slowly making its way out of important difficulties. There is no question that Japan's efforts to get back on its economic feet have been hampered by barriers that have sheltered Japanese finance and left it inflexible and less able to repair itself quickly. One of the most effective ways to ensure a rapid Japanese recovery is for Japan to continue to open and free up its financial markets, so that businesses and households have access to the full range of financial products. Bilateral Financial Services Agreements That's why bilateral approaches and market-opening agreements with foreign countries are a priority at Treasury, alongside the GATS process in the WTO. 5 The U.S.-Japan Agreement on Financial Services of a year ago was a landmark pact in that regard. It contained substantial Japanese market opening commitments in asset management, securities sales and underwriting, and cross-border provision of financial services. Specifics ranged from opening the public pension fund market to wider competition to greater transparency and procedural protections across the financial industry. Qualifying Japanese corporate investors will have virtually unlimited opportunities to invest abroad. The Japanese government has already implemented the vast majority of its commitments, and remains on track for those with later starting dates. Authorities have announced that they will accelerate the timetable for some remaining measures, such as the liberalization of management access to private pension fund money, and removal this April of all remaining restrictions on specialized fund management by individual managers. While it is still too early to tell how foreign firms are benefitting, there are signs that significant inroads have begun. The number of private pension funds employing foreign fund managex::s has risen from 59 to 89. Last month and for the first time, two foreign firms were awarded mandates to "solely" lead manage a domestic securities issue for a Japanese issuer. These and other signs suggest that Japan's markets are opening up. We are going to continue to push to expand opportunities for foreign fmancial institutions in Japan, and will continue to carefully monitor Japan's compliance with the agreement through an intensive follow-up process. Progress in Other Key Markets Our bilateral contacts have brought us progress in other key markets, particularly when we stress the importance of financial services in the context of broader diplomatic contacts. Korea, for example, is seeking membership in the OECD. Seoul is stepping up liberalization, including financial services liberalization, as a prelude to joining. Korea has bound its abolition of economics needs testing for licensing foreign bank branches and securities firms in its GATS commitments. Seoul has also raised foreign participation in the domestic stock market, significantly reduced restrictions on foreign investment, and has pledged to allow M&As between foreign and domestic firms soon. Let me say in this regard that the OECD is a powerful force for financial liberalization right now, as new countries seek admission. Starting with Mexico, and then the Czech Republic, OECD entry is an occasion to throw off barriers to investment and the free flow of capital. Along with Korea, Poland and Hungary are seeking entry. Actions are being taken and commitments are being made for more action. Myoid organization is often thought of as just a place for talk. But when it comes to financial market and investment liberalization it ' has become a place of action. 6 The United States is pursuing financial services liberalization in Taiwan as part of our dialogue regarding its GATS accession. The Taiwanese have begun to move. They have adopted legislation to establish a domestic futures market by year's end. They are removing key capital controls including investment repatriation limits. And the central bank governor recently pledged to remove all capital and foreign exchange controls by the year 2000. Recent months have seen progress in other important markets as well. President Cardoso of Brazil has signed a decree allowing foreign participation in that country's financial sector on a case by case basis. President Ramos of the Philippines promised to allow unrestricted foreign investment in finance companies and investment houses. The GATS Of course, our most important effort last year centered on bringing financial services under the rubric of the World Trade Organization, and the discipline of the multilateral trading system. We sought and worked hard to win commitments from other countries that would lead to the creation of an open, non-discriminatory regime. Our aim was ensuring that market access and national treatment would be granted on a most-favored nation basis in all GATS member states. Some emerging markets had legitimate concerns about how quickly they could liberalize, so we were willing to allow them to phase in market-opening commitments over a specified time. What we were not willing to do was bind under international law our own degree of financial services liberalization -- one of the most generous in the world -- without good offers from other countries to commit to that degree of openness. Nor were we willing to continue along with a double standard -- industrialized countries pledging to keep their markets open, important emerging markets agreeing only to meet far looser standards. Unfortunately, too many countries were not willing to meet standards that were even close to being as high as our own, even on a timetable for future implementation. That is why we made a more modest set of commitments that protect existing operations, but allow us, in the future, to withhold new access from firms of countries that do not choose to open their markets. Our negotiating partners chose to bind temporary commitments that will be reexamined when negotiations resume in 1997. The United States has taken some criticism for not being willing to go all the way at this round of talks. I am convinced that we took the right tack. We have exchanged assurances with those markets that have granted us national treatment and substantially full market access -- the European Union member states, Switzerland, and, with our bilateral agreement, Japan. Through these assurances we pledge to grant substantially full market access and national treatment to their firms in return for their providing the same for U. S. financial firms. On the other hand, by retaining our right to close off portions of our markets to firms from countries that don't open to us, we've retained about the only leverage we have to open markets when talks resume in 1997. The Administration is convinced that this is the 7 best way to make sure that we attain whatever progress can be made in the months and years ahead, rather than allowing some countries an easy way out. Future Progress Although they held back from making wro commitments, most finance ministers in important markets have said they will progressively liberalize their financial markets. I mentioned some actions that we have seen. We will push hard through both bilateral and multilateral channels to keep the momentum for liberalization going. Winning quality commitments to liberalize financial services will remain an important issue in Korea's OECD membership talks, and will be a key part of what we're looking for in Chinese, Russian, Ukrainian, Taiwanese and other applications to join the wrO. We will continue to raise liberalization with important future markets such as the ASEAN countries, Brazil, India, and others, as we did this autumn at the World Bank/IMF meetings. Our bilateral talks will pick up again this year. We will follow up strongly as problems of market access arise. At the same time, in APEC and the Summit of the Americas follow-up, we will work with others on aspects of financial market development of concern to them -- financing infrastructure, and managing capital flows. We want to stress that financial market liberalization is a win-win policy. All of this will lead up to resumed talks on reaching a permanent GATS agreement, set to begin in 1997. Of course, we will remain vigilant in watching whether countries open their markets, and are prepared to live up to their commitments. We are prepared to act to defend our interests, in accordance with our wro rights. Conclusion Let me finish where I began. The world has seen an economic revolution in recent years. Emerging markets have by and large been the beneficiaries. As all of you in this room know, there can be no more important task for our own prosperity than ensuring that these key markets continue to grow, and continue to open to our firms. Accomplishing that task requires more -- not less U.S. engagement, more -- not less U.S. leadership, and more - not less U.S. support for global trade. I urge you to continue to spread that message, as we further the policies that allow firms like yours to take advantage of the global economy, and to compete well into the 21st century. Thank you. -30- 8 NSC PRESS OFFC ............ CALVIN THE WHITE HOUSE Office of the" Press secretary For Tmmediat~ Kelease January 18, 1996 PRESS BRIEFING BY SECRETARY Of' THE 1'R!!:ASURY, ROBERT RUBIN, CHIEF OF STAFF, LEON EANETTA, AND DIP-FoeTOR OF' THE OFFICE OF MANAGEMENT AND DUDGET, ALICE RIVLIN The Briefing Room 11: 47 }:I,. M. ES T MR. PANETTA: What We wanted to da was to b.ri~f members of the pres::; (;()rps on the offer, the P"!:"oposal -- the most current proposal that's on the table that the President referred to that was before the negotiators. 1\.5 the President has said, we spent more than 50 hours negotiating with Republican and Democratic leader~ jn ~n effort to try to reach Ci balanced bUdget th;~t i::; consistent with the values that the Prp.:=.ident has been expressing, values of the Arneric(:In people. And I think it is fair to say that we've made a great deal with progress, enough so thot we really ought to be able to finalize a propo::Hll that, in fact, achieves a balaIH..:eu. budget occording to the Congressional Budget Office. As you (;oIl see frcm the inforrn(it·i.on that we have prtssed out, the Presiden~ and congressional leaders have now agreed on close to $740 billion in savings over seven ycar3, when you take, ba:iic::ally, the cornmon ground or the least -- the minimum amount of savings th~t each side has offered, we are talking obout a very significant sum in excess of $700 billion of savings that, again, reqardless of Lhese oth~r policy diffe~ences, ought to be l~cked in: :'f we can't agn~e on I_hese other policies di fferences, at 1ea~~ lock if1 Lhat amount ot savings to try to get us to Q balanced budget_ That's there. This is easily enough to reoch the goals that all of us have said we w~nt to achieve. If the goal is a balanced budget, then we are there_ If the goal is a ~~lanced budget in seven ~OOl ~SC PRESS OFFC ~~~ CALVIN years, we are there. If the goal i5 ~ b~lunced budget in seven years as scored by the Congressional Budget Office, we are there. And if the goal is a modest tax cut targeted at llLidc.ile-class wu.c:killY [o.millE;.:i,· we ore there as well.· The President has been d~termlned to r.each an agreement. That's because he's. been willing to reach his hand out and try to work through these issues with the principals in the Oval Office that we've been able to come this far. As ma.l1.Y of you kllOW, t:he Pres i den t put the most recent pcoposal on the table last week during the negot1ationR that we had and haRi~ally presented this offer on the table. It represented a significant move in a number of key areas from what was the Daschle proposal, the proposal that the President had initially presented to the Hill that was scored by cno. Before we talk about it, let me just remind you of the history ot the process wR've gone through. The Reptililicans sometimes suggest that this process began only when the President offered the balanced budget scored by CBO. That was not the starting point for these negotiations. For the Republicans, the starting poit1.t. was t.he) r cOllference report: on the n:.'Conc.i.U.aLion bill. for the President, the starting pOint was the balan~ed budget that he proposed in June -- a budget that achieved balance in 10 years using, ugain, conservative estimates by the Office of Management and Budqet, which we thought protected the pI:'iorities and values thi:it he coL·ed about. The Republicans had ln~iRtRd that it had to be seVen years and that it had to be scored by CBO. While the Prc3ident and all of us had re5ervutions about whether or not we should go that far, the fact is we are there now. WC'V8 aqreed to go to SEven ye~r5, ~nd we've agreed to do it according to CDO. To do LhaL, I might add, cost hundreds of billions of dollars of addi tic-mal :=;penciing cuts th8t W~I'8 added Lo o\.u:- own proposal that we had to then confront b~c~u~p. of moving from 10 years to seven years, and moving to CBO assumptions. Now, th8 President has taken another good-faith, siQnificant ::;tl::!P iIl i:iLl effort to :-each agreement. It provides il1. thIs proposal a larger tax cut than he had originally propo~ed. We had proposed initially a tax cut in the vicinity of about $110 billion, Sl16 bill Lon; we're now at a proposed tax cut of $130 billion. It provides tor the $124 hilliori savings in Medicare. We have always said we would be at about $124 billion. CBO scored our proposal at ~bout $98 billion. [4J 00 2 NSC PRESS OFFC ~~~ CALVIN 3 We then embrilced the Daschle proposal d.t $102 billion. We're saying we are prepared to provide $12~ billion in ~avtngs out uf the Medicare program. It also provides additional saving3 in Medic,qid and in welfare reform. However, it continues to protect the priorilles that the president cares about. We do this in a way that fundamentally protects M~dlcare, the policies in Medicare, Medicaid, ~ducation, the environment, and again protects working families from 8ny tax increases. If you take all of the areas at the beginninq of thi~ process, you will 5ee that the President has taken by f~r the largest step toward ..:. trying to find an agreement here. Orl Medicare, he's gone abuuL 597 billion as scored by CBO to the $124-billion figure. on Medicaid, he's gone trom $38 billion I'm sorry, h0 went from $97 billjon, which we had in our original Medicare proposal, to $121 billion. On Medicaid, he's Gone from $38 billion to $S9 billion. On discretionary spending, we went from about $138billion to $297 billion. on w~lfare, we've gone trom $38 billion to $41 billion. Ann on the earned income t.ax credit, we went from abouL $2 billion that we thought we could achieve, basically, in savtngs, to about $5 billion, which is still essentially to focus on anti-fraud and enforcement issue~ related to the EITe. On other mandator.y program savings, we've gone from what was about a minus-$b billion to now $67 billion in ~avings in other mandatory areas. So this i5 a grand total of about $284 billion in mo·"ement, far more than what Lhe Republicans have done in terrn5 of these negoti~tlons. Even with all of this movement, the President cuntinues not only to offer that we continue to negotiate, but he'~ doing it on the basis that we believe protects the priorities that he cares about. So what divides us? Let me ju~L mention this. What divides ~s? I think the fundamental diffp.rence at this point really 1s what the Presirlent identified. The Republicans are asking for a much ] 1'l rCJer. tax cut. When YOll look at the grOEn, number of t.i'iX cuts they're talking about, even though they ~ay they want a net or about $177 billion, net means that when you add back the reforms that they've included, we're looking ~t over a $200 billion tax cut that they continue to insi3t OD. ~003 NSC PRESS OFFC ~~~ CALVIN 4 If you're going tu have that size tax Cllt: jn urder to [or it, you've got to get ~drlittonal cuts, and these ~Ut5 have to ~ome out or Medicare, out ot Medicaid, out of education, the environment and out of other areas that we say are -- that we insist need to be protected; we insi5t h~ve to be decided on a policy basi5, not to become a cash cow for an even larger tax cut. p~y In addition, there are some policy differences that we :::;till a-re obviously working onr way through that the President has also identified. ln Medicare, with regards to their proposals as to Medicare restructuring that W8 h~ve serious concerns about; on Medicaid, they continue to ill::;lst on a block qrant instead of an. enti tlemenl. They insist on virtu.:; 1. ly ending dir~~t sLudent lending. We have snme CO[lCerns with their pension proposals, th~ir incr·8ase in taxes on working families and others. these are still issues that obviously we have m~jor differences on. But we think the bottom line is that we've reached enough 3a v 1ngs to achieve a balanced budget. Let me just quote, if I cali, t.hp. quotes that members of the Republicarl p~r1":y ttl(::~m:selves have said is the fundamental go~l here in these budget decisions. Senator Domcnici, this is December 15th, and I quote: "You will find, Mr. President, you will find that we have unly one goal in m.ind. Everything else is un Lhe table, Mr. President, but !l(.)t Lhe one thing that i,::; s~crecl to Q1.1r coromi tment, al'ld tha t' s a balanced budget in seven years using the Congressional Budget Office." CBO-scored, Representati ve Gingrich: "Thev owe the Cowltry a seven-year balanced budget," -- December 13th. Kasich -- Representative K~sich: "Frankly, we don't a,::;k n. lot. Wr-: a:sk for nothing more thn.n a commitment to do this in a seven-year pp.riod. The priorities within th~t 3even-year plan are negotiable." l\nd lu..stly, Representativ!::! Llndsey Graham, a Republican trum Soulh Carolina: "It wcmld he CjcE'at if the Presiderl.t would pllt (! balanced budget, CEO-scored, t.hat balances In seven years. I'm not tp.llinq the President how much to 3pend on Medicare and M~dicaid. That's never been p~rt of this deal. He can construct that budget any way he wants as long as it balances in seven ye~rs. He can allocate the money wherever he sees the priorities to be." ~004 NSC PRESS OFFC ~~~ CALVIN 5 If that is the fundamental goal -- getting a balanced budget scored by CBO, then we are there. So we ask the Speaker and Senator Dole to come back to the negoti~Ling tabl~. They should not sacrifice a balanc~d budget and a tax Cllt on the alter of ideological goal~ beyond the goal that we have set tor the c.;uuntry, which is a bal.:::!.nc::ed budget. And I think as leaders, they ~hould join the ~resident in an historic moment to try to get this dO~A for the American peoplc. Let me, before that, ask Alic..:~ and Bob Rubin -- DIRECTOR RIVLIN: Let me just emphasize a few points. As Leon s~ys, this is a budget that balances in seven year3 by (BO scoring, ann it leaves room for moderate tax relief for the pAople who need it most -- young families with children and people who want to pay for education beyond high schuol. It reduces future government spending vel'Y ~ubstantially ann j n i':I balanced way. There are almost $300 billion in cuts in di~~relionary spending over seven years, and there are almost $300 billion in mandatory or entitl~ment cuts over seven years. The di3cretionary cuts arc deep, but we belIeve that they preserve the government services tho L we need to grow thr~ economy, our COllUlLi tlllE:!l t to education and t:ri'i i l1.i.ng and technology. In i::1ddl tion, we ~nhance ~dl)cClt i.on opportuni ties by rna ktng tax deduct1bl~ education expenses. We believe that the cuts in Medicare are reasonable. They are provider cuts that reduce the:: 'Payments to provlders over a period of years, but not 30 deeply thaL we will damage:! the health system ur make Medicare a seconrt-class system. We do not raise premiums 011 people=-. We keep them at t.he 25 percent of the cost of Part B. And as the Pr.esid~nt emphasized, we:: give more choice to seniors, but not choice of moving to plans that will pull the healthiest and wealthiest out of the system, leaviw:;l others in Medicare or that will pull providers uul of Medicare because they can do balanc@d billing. We are apposed to both. we m~rte cuts in the rate of growth in Medicaid SfH::Ilding, but hold fast: t.hat. while there must be a greut deal more flexibility for governors to use the funds in the best way possible, ~e must pre3er·ve the guarantee to the most vulll~.r·able people, the younq families wi th children i::lIld low incomes ril"ld t.he disabled. We reduce spending for Medicare by imposing a per-capita capt a cap that rise~ with the number of poor people or people needing Medicare services in thc stilte -- Medicaid I4J 005 NSC PRESS OFFC ~~~ CALVIN 6 service5, sorry, in the state. But we preserve the federal match so that the mUtleY flows wh~r~ t.he need lS greate~t. In both Medicare and Medicaid, the rate5 of growth per capita over the seven-year period would be restrained below the level that we expect the private sector spending to go u~ per capita, but not so much that it damages tl1@ :::;ystem. w~ make cuts i11. welfare programs, but we believe that we preserve the right kind of welfare r.eform with enough money for work and child car.e so that we can move people off wclfure. It is time-limited welfare, but it is not destructive of Lhe safety net for low-income families and th~ disabled. We m~ke other cuts in a whole variety of programs, bu~ not ln the ones we think are most impurLant to the Arne ri (:i-Hl people. fu,d the result, as the ~resident and Leon have said, .1.5 ~ deficit path that gets to balance in 3even years. l\.nd because we do not have a large tax cut, we have a deficit Lrack that goes down much more credibly and much suoner. The Republican plan would incr~a:::;e defici ts substiintj ally in the near tel""Ill and then get to balance. Thi:lt' s because they're financing a much larger tax cuL. If the objRctive, as the leaders have said, i:lS quoted by Mr. Panetta, is to get to balQnce, we have a way of doing that more quickly. Let me turn to Bob. MR. PANETTA: Q Bob, on the tax cut. Is there anything new here today at all, anything? MR. PANETTA: Just listen SECRETARY RUBIN: MR. t'ANETTA: Q Do I think, Brit, there'~ a lot new. This is good stut!. you have 8.ny kind " - any new proposals, ally new numbers, anything? SECRETARY RUBIN: Let me finish my comment5. We'd del ighted to re:=;pond to yQ"Llr question~, i f that's a question. Q' It. wa 5 a question. SECRETARY RUDIN: It sounded like iL might be a comment, but in any event. On the tax side, the president has ~aid consistently he advocates and has proposed a middle class ~006 ~SC PRESS OFFC ~~~ CALVIN 7 tax cut. Three of the pieces you're familiar wi th, and tlH::lIl there's some additional pieces that we've included in t.h~ $130 billion. One is a child tax credit, whic~ is the one he's had all along, that appliefi to Ghildr~n 12 years and under and has income levels that are consistent with -- income test that are consistent with this being directed toward the middle class. Secondly, an education tax credit of SlO,OOO, phusing up from $5,000. AQaill, with i!lc.;('HIl~ llmit~ thaL a.r·~ consistent with this being ta.rgeted toward the middle class. And thirdly, an inCr~fi!'l~ in the levels of income, which enable you to use an lRA and a restructured TRA, which is both front-loaded and back-loaded and has tar greater flexibility with respect to usc of funds. In addition, with the $130 billion, we would increase small -- the small business expensing from $17,000 to $25,000, which yon mfiy r~m~mbf:! in 1993 WHS the P'r'es'iderll'~ o.ci.ginal proposal and has bipartisan support. Secondly, we would have pension simplification, which again is a bipartisan proposal. hnd thirdly, we would provide relief for ~m~ll, family-owned businesses and farms with respect to estate tax by enabling the inheritors of such property to defer taxes for many years with preferential interest rates. Thank: you. Q Mr. Panetta, didn't in the setting out of the of the negotiation and even in the langtiage of the CR, you !:)p!:;cIfy LhaL !loLhluy was agre!:;d Lo unLIl everything was agreed to? term~ MR. p~NBTr~: That's correct. Q Well, based on that, how can you stand here and say you're already there on all these things, and all these things ha.ve been agreed to? They haven't, have they? MR. PANETTA: Well, the fundamental -- 1'm gotng back to the fundamental goal, the fundamental goal that we agreed to Wus the fundamentul gaul of b~l~ncing the budget in 3even year3. Q I know, but I'm talking -- the question is about the specifics, and you keep insisting that in specific ar~as -LaXE:'S, MedIcare:' and ::;c.' on -- LhaL l:hiwJs have ber;Il agreed to, When in fact by the terms that the White House insisted on, nothing is agreed to until everything is agreed to. Is that not correct? MR. PANETTA: The fundamental goal was balancing the budget in seven years. We have enough saving~ 011 tht:! Li:il.ll~ Lhi:iL ~007 NSC PRESS OFFC ~~~ CALVIN 141008 8 both sides have put down. If you take the minimum offered by both sides, you've got enough to balance the budget. That's the main point. Yes, there arc policy diffe~ences. y~s, there ar~ differences whethe~ we go furLher on Medicare and Medtcaid and uthl;;1L' areas. But the fUl1damel1tal poinl. -- if the fundarnent<'l.l goal was to achieve a balanced budget, do it according to CEO, and do it in seven yearR, we have that here in terms of the ~<'l.vings agreed to. That is important. Q And did you really imagine that that meant that when the President finally put all offer on the table that mel thu::ie Lerms, that that would bt=! accepled immediately? MR. PANETTA; But this is beyond that. What we're saying here today is the Pre3ident has also taken an udditional :;tep beyond the propo.!:al that WilS scored by CBO, whic;h was the Da.schl~ budqet. Q specifically, which is that? MR. PA~TT~: The proposal that is before you been passed out is a movement from the Daschle budget in key nreas. On~: Medicare. The Duschle budget was $102 We're at $124 billion. On M~dlcaid, the Daschle blldget $38 billion. We're at $52 hiJlioll. DIRECTOR RIVLIN: that has several billion. was at Fifty-nine billion. MR. PANETTA: Fifty-nine billion. On the EITC, we were initially at ~cro, went to $2 billioll, and now we're at $5 billion in terr.1S of ad<.iiLional savings. And on the tax C'Llt, we were oriqinally at around $110 billion, $116 billion; we're now at $130 billion in te~ms of the offer. We keep hearing that there are no serious offers on the table. Very frankly, this is in response tu Lhe Republicans so that it's very clear to Lhem that there are serious offers on tlH! table, and even beyond that, i f thr~ goal here is to get to the COmmal"l. saving:::; tha.t achieve CBO balanced hlldget in seven years, we are the~e. Ultimately, let me a130 say this -- there is some comment about the backloading in these proposals. If you take our proposa.ls, they are not bdl:kloaded the way the Republi(:nrJ proposals are. They provide for a better transition on deficit reduction. And I th1l"l.k Alice' 5 chart basically pOints that out. We Cal"l. g~t. to a balance with these numbers that we've proposed in a way that provides n very good transition in terms of deficit r~dllction, and that responds to th~ criticisms that we would huve NSC PRESS OFFC ~~~ CALVIN of their proposals, which are bDckloaded because of the huge tax cut. Q As far as I can t~ll right now, on the Medicare savings, your proposal is $124 billion 6ver seven years; the Republican proposal $168 billion over seven years, which is a differ~nce of about $44 billion over seven years, which comes to maybe $6 billion or ~7 billion a year in a proqram thaL's hundreds of billions of dollars. So it'~ no l;nger fair ~o characterize the Republi~an position on Medicare o~ extreme, sinc~ Lhe two sides are virtuall.y eyeball to eyeball on Medicare. MR. P.ANETTA: Well, again, Wolf, it's very important that in an area like Medicare, this is not 1ust 5licing the numbers. I mean, they st<J.rted, don't forgf:!t, at $270 billioli; admittedly, they've cume to $168 billion. We ?.re now at $124 billiun. But what are 'the fllndalTlenlal differences? The fundamen'tal differerlces still relate to, one, the fact that they :i.ric;rease premiums on people who are on Medicare beyond what we haVe proposed significantly; secondly, the structural changes that they are recommending in Medicare -- the use of the medical 5nvings accounts, the use of their fee-for-service approach, again provide incentiv~~ Lo the healthiest and the wealthiest to y~l orf of Medicare, th~n C":llt thr~ am01.1nt of funding that gO<3S into Medicare below the level of growth that would even maintnin the private sector 19vel of growth. They cut it below that. 30 that what they do is essentially make it wither on the vine. They begin to drain Medicare down so it becomes very much a second-class system. NOW, those Clre the fundamental debates that have gone on, both in the Oval otficA and in th~ negotiations that we had in the Cabi.net Room. There are some very fundamental differences in terms of the policies. Now, can they be bridged? The president has ~uggested, let's take some uf your ideas; let's do demonstrations with those ideas in a controlled ~nd limited way so we can determine whether or not our fears are justified about their proposals. So there is a w~y to bridge this. But if they're saying, we want our restructuring and we want to have Lile premium il1.CreaSes, then we h<J.ve some significi:iuL differenc~.s. o When you count billion that you say that both sides hav~ Rgr~prl to, you're counting savings from your proposals on Medicare and Medicaid, but they never agreed to your proposal, so how can you say they agreed to that? th~ $600 i4J009 ~SC PRESS OFFC ~~~ CALVIN 10 MR. J:>ANETTA; Wh8t we'r~ .saying is that when you take the level of savings we h~ve put on the table, compared wi~h the level of sa v ing5 they had put on the table, if you jl1~t take the minimum both sides hav~ put down, we h~ve enough to balance the budget. Q What kind of a tax cut would that give you if ~ou took that minimum? You don't have that i l l that ch~rt_ Does that leave any room for a tax cut of any ~ort? MR. PnNETTA: I think our position has always been that on a Lax ~ut, if you keep the tax cut in the vicinity we're talking about, if you do corporaLe welfal'E!, which we have ~bout $46 billion on, if you trigger off the tax cut, as we have proposed doing, we think we've got suffici.ent room to do a wodest. tax cut. Mr. Panetta you are basically accusing -- you're bO!:iic:ally them of trying to pull a fast one on the American people by destroying Merli~ar~. What's in iL [or them to do that? '0 MR. FA!'J£TTA: No, :r think the fast one th,:;y're Lt'ying to pull on the American people is that while they argued t.h~t this was all about balancing the budget in 3even years, it's r~ally about more Lh,Hl that. It' oS about fundamentally restructuring Medi~are; it's about a huge tax cut of over $200 billion that now has to be funded by cut~ Medicare and Medicaid ilnd these other areas. It lS more about the other elements of their Contract ilnd getting those implemented than in tact b~lilncing the budget in seven years. It the goal here, according La their own quotes, is to balance the budget in 3even years according to CBO, then l~t's get on with it. We're there. Let's get that dune. Tha.t's the key. Q And what's thei.r motive for destroying Medicare? I mean, for what reD50n? Why would it possibly help them politically to destroy such a popular progr~m? MR. PANETTA: question because -- Q Well, you've got to ask them the They say they're trying to save it. MR. FANETTA: Well, I think the problem we have is a big difference about how they're trying to save ~t, b8cause if you look at the restructuring that they would put In place, we think iL drains M~dicar~ of the resource~ tllat Medica~e needs in order to continue to be a secure system for the elderly in this country. v~ry 141 010 NSC PRESS OFFC ~~~ CALVIN 11 It, first of all, cuts the amount of resources down and 5et~ a growth level in terms of cost of living that doesn't keep up even with the private sector qrowth in health care. It goes below that by about 20 per°c.;cllt . . Theu they pr·ovide incentiv~s for people who are wealthy Rnd healthy to get off of the system, to basically go into these other programs, which then makes the remaining Medicare program have to serve a constituency that is poorer and sicker, which mean3 that it'3 going to become that much more c05tly. And eventually it drains the Medicare system so LhaL iL be~urue~ a second-class system. I mean, those are r:he fm'ldCiInental concerns that we have. Now, they have some ideas. They're saying what we trying to do is promote choice. We respect the fact that that's what they're trying to achieve. But our point is, let's test those ideas. Because when you compare them to the: Speaker's comments tha.t he's trying to make Medicare wither OIl Lhe vine, it concerns us that the goal here is not just trying to strengthen Medicare, it's basi~ally to weaken it. Q What'3 the bottom line, here, Leon? -- both sides are -- (inaudible) -- benefits of their -- both sides are spinning their positions. What's the bottom line to the 1\Inerican people? Are you going to talk aqain? Are you going Lu make i:i new proposal as the Republican!:) want, or arp. thp. io.=!lks rlec=.t.d? MR. PnNETT1\.: I think the fundamental point here is the President believes that these negotiations have in fact made progress. We have in fact now put on the table: sufficient Sa.Vil'lgS to achieve a balanced budgeL. We (i!:e clu::>e if tll~ ~u(il i.::; to - c;et .8 hi'ilR.l"lced budget: agreen'Lent in seven years scored by CEO and a modest tax cut. We think we can get there. If the goal is beyond that, then obviously we are in a difficult position, and the President and the Republicans will have to ta.ke these issues to the Arneric~n people. But our hope: is we won't have to do that. These negotlaLions have In fac.;L, I b~lieve, produced progress. Q But what happens now? Q How do you push them off the -- o -- wheL~ do you go from here? MR. PANETTA: I think in the end tlle only way you're going to get progrAss is whAn they sit down and continue negotiating. If they stay away from the negotiations; if they I4JOll NSC PRESS OFFC ~~~ CALvIN 12 dorl'L even want to talk, then obviously it makes it difficult to try to arrive at an agreement. But they ought to come down here. Th~y ought to continue these negotiation::;. There shouldn't be ~11y c:ondi lions attacll~d Lo it. Let'~ just si~ down and ~~lk about it. We're prepa.rp.C'i, as we have been, to continue to discuss and to try to modify and try to move towards an agreement. They ought to be prepared to do the same thing. Q On a neur-term practical point Q -- appropriat:ions, 110W does that -- how roan you --wha.t h.=.tPPP.T1S, ~j..r., if they start sending you all these targeted appropria tions they ta 1 k about? And does:l' t ttia t put the President in an awful bind of focing the choice of vetoing spending he essentially agrees with because it doesn'l include other spending he wants? MR. PA.NETTA: Well, as I said, first of all, I think what the RepUblican~ have got to stop doing is using threats. They've got to stop using the taking of hostages on their proposals. Thc:::y' ve got to stop using the chCJ.llenge 0 f ei th~L' using the debt ceiling or the CR as a vehicl~ Lo try to get their way on their agenda. That h~~ not proven very effe~tive on their pcn't. I Lhlnk in essence that !=>tra teCJY has blown up. Now f i f they corlt.inl.le to kind of use Rube Goldberg kind of approaches to appropriations bills, where they basically ~ay these are the areas we're prepared to fund, but there are other areas that we ure not prepared to fund, then obviously the Pre~ide!lt is going look at those o:r..e by one. If Liley, in fact, undercut: hi~ priority !-H'ugL'ams, then he will cont:inlle to oppose those proposals. That, as I s~id on Sunday, if there are proposals rhAt ag~in lry to hold his priorities hostage in .exchange for keeping the government running, as we have shown in the past, we are not gong to accept that kind of bla.ckmail in trying to do the business of the country. I think they've learned their lesson. HopefulJ. y they :"1 ave , and we call negoLlate our differel'lC!p.s out and try to k~ep the government running. Q But doe~n't that effectively put the onus back on the President~ 1f in tact they fund parts of the government, wouldn't he be, in fact, shutting down tho work~ of the government? MR. PANETTA: Look, we are 110W abollt three and a halt, alruo~L four mo~ths beyond where thi~ Congress should have been in complet.ing the business of the country. 'T'hey should have had iJ.ll the appropriations bills done by october 1. Th~~ hasn't ~012 ~SC PRESS OFFC ~~~ CALVIN That's what produced the problem with the continuing resolution. We are now in a year where they ought to be focu!:iiIlg on the '97 budget; and we still haven't com~leted the '96 budge'!:. I think the time has come for the Conqress to understalld why the American people elect p~uple to office, which is to run the country, not to Lry to threaten it, not try to hurt people in this country, but to run the country. happened. So let's dispose of the '96 issue~. We can either do a CR or we can work tlu:ouyh the differences Ol'~. these appropri~Llons bills. We're prephred lo do that. But let's now get on with 'the issues in '97. We are already in the year when we OUgllt Lo be looking at th~ '97 budget. Too much time, frankly, has gone by for us to focus on the problems that confront this country. We can't operate in this fashion. plan ill Q 1eo1'.l., basiGi:1lly, you've ruled out ()ffer·i.ncJ a new response to the latest Republican demand. MR. PANF.'T'T.~: What we're saying essentially is we have a new proposal on the table. This is the proposal we presented to them in the Oval Office. For them to continue to stat~ we're waiting for an additionQl offer doesn't llii:1ke sense because W~'VA alrendy given them an uffer. The President has made suggestions beyond that that they ought to consider. the fact is, if they dan't. come down here and talk, i t i~ they who are not taking advantage of the opportunity to give this country a balanced budget. Q What suggestions beyond this? has 1lt(;1de suggestions beyon.d this? Yt')\l' re Saying he MR. PANETTA: He is always prepared to discuss new ideas. This President is always prepared to discuss new thoughts and new ideas. But you can't discuss them when one party uue~!l't even want to ~it down and negotiate. table, Q So is Mr. Po t1 et I>~.? there a dead 1 i. [\e when you'll get up from the MR. PANETTA: THE PRESS; END We'll still be there. Thank you. .1.'2: 15 P.M. EST [4]013 Removal Notice The item identified below has been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to copyright protections. Citation Information Document Type: Transcript Number of Pages Removed: 27 Author(s): Title: Treasury Press Briefing Date: 1996-01-18 Journal: Volume: Page(s): URL: Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org UBLle DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 22, ~996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $~1,537 million of 13-week bills to be issued January 25, ~996 and to mature April 25, 1996 were accepted today {CUSIP: 912794Y40}. RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.97% 4.99% 4.99% Investment Rate 5.12% 5.14% 5.14% Price 98.744 98.739 98.739 Tenders at the high discount rate were allotted 51%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $56,074,720 Accepted $11,537,010 $51,344,654 1,309,466 $52,654,120 $6,806,944 3,032,500 3,032,500 388,100 $56,074,720 388,100 $11,537,010 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreig~ Official Institutions TOTALS 4.98 RR-819 98.741 ~,309,466 $8,1~6,410 UBLle DEBT NEWS Department of the Treasury - Bureau of the Public Debt - Washington, DC 20239 FOR IMMEDIATE RELEASE January 22, ~996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $~1,585 million of 26-week bills to be issued January 25, ~996 and to mature July 25, 1996 were accepted today (CUSIP: 912794Z64). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.87% 4.88% 4.88% Investment Rate 5.08% 5.09% 5.09% Price 97.538 97.533 97.533 Tenders at the high discount rate were allotted 23%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS RR-820 Received $56,620,277 Acce:gted $11,584,787 $50,177,816 $51,341,177 $5,142,326 1,163,361 $6,305,687 3,000,000 3,000,000 2,279,100 $56,620,277 2,279,100 $11,584,787 ~,~63,361 DEPARTMENT OF THE TREASURY WASHINGTON, D.C. SECRETARY OF THE TREASURY January 22, 1996 The Honorable Newt Gingrich Speaker U.S. House of Representatives Washington, D.C. 20515 Dear Mr. Speaker: As I stated in my testimony before the House Banking Committee on December 13, the ability of the Department of the Treasury to continue to finance the operations of the Government without an increase in the debt limit is limited. I also stated that when we approached the next critical date relating to our ability to finance the Government's operations, I would provide Congress and the American people with information as to whether we could get beyond that date, and, if so, how. I have now concluded that either February 29 or March 1 is the date on which Treasury will no longer be able to fulfill all of its financial obligations without legislation increasing the statutory debt limit. On February 29, an interest payment of $5.8 billion is due. On March 1, over $30 billion of payments are due including Social Security, Veterans, Railroad Retirement, Civil Service Retirement, military retirement, and other benefits, certain Medicare and low income housing payments, and military active duty pay. I detail below the extraordinary actions I can take to provide sufficient debt limit room prior to those dates. Beyond these actions, there are no legal and prudent options I am able or willing to take. I want to urge in the strongest terms that Congress take action this week to enact a clean debt limit increase. If we were not to take any extraordinary actions, we would not have sufficient leeway under the debt limit to raise the cash needed to pay bills on February 15. In the absence of such actions, the United States would default on its debt on February 15 for the first time in the Nation's history. However, I have repeatedly said that default is unthinkable, and I do not believe Congress will let it happen. In letters to Congress, I have·always said that I will take whatever legal and practical steps I can take to avoid default. There are several steps that I believe are both legal and prudent to take to avoid a default on February 15 if Congress does not increase the debt limit before then: • First, I will suspend the re-investment of the approximately $3.9 billion of Treasury securities held by the Exchange Stabilization Fund (ESF). These securities will equal the amount of the ESF's holdings of dollars, and the ESF will be given a credit balance in that amount. This is an action that several Treasury Secretaries prior to me have been forced to take. • Second, the Federal Financing Bank (FFB), as permitted by its statutes, will exchange approximately $9 billion of the assets held in its portfolio, consisting of debt obligations of various federal agencies, for an equivalent amount of Treasury securities held by certain government trust funds. FFB will, in turn, reduce its own indebtedness to the Treasury by transferring such securities to Treasury, which will in turn cancel these securities. • Third, based on current circumstances, I will amend my November 15 determination of a 12-month debt issuance suspension period to extend that period by another two months, to 14 months. This action is consistent with the earlier opinions given to me and represents the maximum term permissible under these circumstances. This action will permit the redemption of approximately $6.4 billion in additional Treasury debt held by the Civil Service Retirement and Disability Fund (CSRDF). We estimate that these actions will enable us to finance Government operations into the last week of February -- although I caution that our present projections are subject to change as our information on cash flows is updated daily. The recent Government shutdown and extreme weather conditions have affected both revenues and outlays. These actions may not create sufficient debt limit room to enable us to make the $5.8 billion interest payment on February 29, and in no case will they create sufficient debt limit room to enable us to raise enough cash to make the $30 billion of benefit and other payments due on March 1. I want to emphasize that we will have no other options that are both legal and prudent. While a variety of possible additional actions have been mentioned in the press, there are no other actions that we will be able or willing to take. Some of these suggested actions are beyond our legal authority. Others, such as delaying tax refunds to American taxpayers and selling the Nation's gold reserves are completely unacceptable, particularly in light of the fact that Congress clearly has the power to ensure that the government will meet its obligations by assuming its responsibility to increase the debt limit. Tens of millions of Americans count on the Department of the Treasury to make prompt payments to them of tax refunds to which they are entitled, and it would create enormous hardship to delay these payments. Further, as Secretary Baker wrote to Congress in 1985, it would undercut confidence in our Government both here and abroad if we were to consider selling the Nation's gold. The actions I am announcing today are all fully authorized and have been concurred in by my General Counsel and the Office of Legal Counsel at the Department of Justice. These actions will be unnecessary if Congress increases the debt limit prior to February 15. As I have repeatedly said, this is no way to run the finances of a great nation. We need a clean increase in the debt limit in order to stop putting unnecessary costs on the American taxpayers, to avoid the uncertainty in the financial markets that will surface as we get closer to March 1, and to concentrate on the critical task of balancing the budget. Failing to increase the debt limit does not reduce the deficit by one cent. The Nation's creditworthiness is critical to all of us and should be off the table with respect to the budget process. I again urge Congress to pass a clean increase in the debt limit this week. We will of course be most eager to work with you to craft an agreeable bill. Sincerely, 4DS$£~((~ Robert E. Rubin cc: Congressional Leadership Committee Chairmen Ranking Members 3 DEPARTMENT OF THE TREASURY ~/781q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .................................... OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 23, 1996 CONTACT: Jon Murchinson (202) 622-2960 FACT SHEET KEY 1995 DEBT LIMIT EVENTS Beginning in July 1995, Secretary Rubin communicated to Congress the Administration's request for an increase in the debt ceiling. As the following chronology shows, these requests were made before any imminent difficulties with cash balances or "head room" occurred. In the various communications with the leadership, the Secretary cautioned that failure to pass a debt ceiling increase would lead either to the United States not being able to meet its obligations or to the Secretary having to take extraordinary actions to avoid a default. • On June 29, the Conference Report to the Concurrent Budget Resolution instructed the House Ways and Means Committee and the Senate Finance Committee to include in their respective reconciliation bills a debt limit increase of $600 billion, to $5.5 trillion--an amount that would accommodate the spending commitments in either the President's or the Republicans' budget proposals until the end of fiscal year 1997. • On July 17, Secretary Rubin wrote to the Congressional leadership calling for an increase in the debt limit. • On July 26, Secretary Rubin wrote to Senator Dole and Speaker Gingrich urging that the debt limit and budget issues be separated. • On July 28, Under Secretary John D. Hawke, Jr. testified before the Senate Finance Committee on the debt limit. • On August 3, Secretary Rubin and Budget Director Rivlin wrote to 31 Congressmen requesting timely action on the budget and decoupling of the budget and debt limit. RR-821 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 • On September 18: Secretary Rubin wrote to the Congressional leadership urging action on an increase in the debt limit separate from resolution of the budget debate. Assistant Secretary Leslie B. Samuels testified on the debt limit before the House Ways and Means Committee. • On September 19, the House Ways and Means Committee approved a debt limit increase to $5.5 trillion as a part of its tax bill. • On September 30, the Senate Finance Committee approved a debt limit increase to $5.5 trillion as part of its tax bill. • On October 17: Treasury announced a cut in the October 23 auction of 13-week bills in order to stay under the debt limit on October 31. Treasury suspended issuance of additional amounts of Treasury bills to Federal Reserve Banks as agents for foreign and international monetary authorities ("foreign add-ons"). Treasury suspended the issuance of State and Local Government Series Treasury securities ("SLGS") other than on SUbscriptions received by October 17. Secretary Rubin wrote to the Congressional leadership describing the actions taken and urging prompt action on an increase in the debt limit. The Secretary also referred to the prospect of being forced to take extraordinary actions if a debt limit increase was not enacted in time. • On October 18: Treasury suspended awards of foreign add-ons to Treasury notes sold to the public. Secretary Rubin wrote to Senator Dole and Speaker Gingrich welcoming the Speaker's suggestion of a temporary increase. The Secretary also referred to the prospect of being forced to take extraordinary actions if a debt limit increase was not enacted in time. 3 • On October 24, Secretary Rubin wrote to the Congressional leadership to remind them of the importance of an increase in the debt limit before November 1. The Secretary also referred to the prospect of being forced to take extraordinary actions if a debt limit increase was not enacted in time. • On October 27, Secretary Rubin wrote to the Congressional leadership to request an $85 billion temporary increase in the debt limit. • On October 31: Secretary Rubin wrote to Senator Dole and Speaker Gingrich to warn of market disruptions if prompt action was not forthcoming on the debt limit. The Secretary also referred to the prospect of being forced to take extraordinary actions if a debt limit increase was not enacted in time. Treasury and the Internal Revenue Service issued guidance to state and local government entities that had already issued refunding bonds on how to preserve the tax-exempt status of such bonds given the suspension of SLGS issuance. • On November 1: Secretary Rubin wrote to Senator Dole and Speaker Gingrich to answer certain questions they had raised. The Secretary also referred to the prospect of being forced to take extraordinary actions if a debt limit increase was not enacted in time. Secretary Rubin met with the President and the Congressional leadership to discuss a possible temporary increase in the debt limit. Treasury called back approximately $2.4 billion of Treasury cash balances from eight large banks. Treasury announced a tentative schedule for the regular quarterly refunding. • On November 6, Treasury postponed the auctions of 3- and lO-year notes that had tentatively been scheduled for November 7 and 8, respectively. • On November 7, Under Secretary Hawke, Assistant Secretary Linda Robertson and General Counsel Edward S. Knight appeared before the House Ways and Means Committee during the mark-up of a bill to increase the debt limit. • On November 8, Treasury postponed the auction of 52-week bills that had tentatively been scheduled for November 9. 4 • On November 10, Treasury mailed notices to approximately 23,000 investors who hold Treasury securities through the TREASURY DIRECT system. These investors held securities coming due the following week and had given standing instructions to roll their investments over into new similar securities. The notice warned such holders that they might not be able to roll their investments and offered them options. • On November 12, Congress forwarded legislation to the President that, among other things, authorized a temporary increase in the debt limit. • On November 13: The President vetoed such legislation because, among other things, it would have placed unacceptable limitations on the Trea~ury SeL ___-i")"s pJwer to manage the federal debt and would have rolled back the permanent debt limit, upon the expiration of the temporary increase, to a level below the current limit. Treasury announced it would conduct auctions of regular weekly bills on November l3, $57.5 billion of cash management bills on November 14 and $18.75 billion of 52-week bills on November 15. Treasury also announced that the auctions of 3- and 10- year notes that had been postponed from the previous week would be held on November 20 and 21, respectively. • On November 15: Secretary Rubin authorized not reinvesting fully the assets of the Federal Employees Retirement System's Government Securities Investment Fund (the "GFund") and redeeming a portion of the assets of the Civil Service Retirement and Disability Fund (the "CSRDF"). Secretary Rubin wrote to the Congressional leadership describing the actions taken and urging prompt action on an increase in the debt limit. • On November 30, Deputy Assistant Secretary Darcy E. Bradbury testified on the debt limit before the Senate Finance Committee. • On December 12: Secretary Rubin wrote to the Congressional leadership describing the need for an increase in the debt limit prior to the end of the year. Secretary Rubin wrote to the Congressional leadership to express the Administration's objections to H.R.2621. 5 • On December 13, Secretary Rubin testified on the debt limit before the House Banking Committee. • On December 14, Under Secretary Hawke appeared before the Senate Finance Committee during its markup of S.1470. • On December 28, Secretary Rubin wrote to the Congressional leadership describing the actions that would happen on the following day and urging prompt action on an increase in the debt limit. • On December 29, Treasury was unable to issue securities to the CSRDF to enable it to invest $14.5 billion it received that day in interest payments. • On January 22, Secretary Rubin wrote to the Congressional leadership that he will take the remaining three steps available to him to avoid a default on February 15 if Congress does not act to increase the debt limit before then: Suspend the re-investment of approximately $3.9 billion of Treasury securities held by the Exchange Stabilization Fund. Exchange approximately $9 billion of the assets held in the portfolio of the Federal Financing Bank, which consists of federal agency debt obligations, for an amount of Treasury securities held by certain government trust funds. [FFB will, in tum, reduce its indebtedness to Treasury by transfering such securities to Treasury, which will cancel them.] Amend his determination of a 12-month debt limit suspension period to extend that period by another two months, to 14 months. • On January 22, Secretary Rubin wrote to the Congressional leadership that either February 29 or March 1 is the date on which Treasury will no longer be able to fulfill all of its financial obligations. -30- 011 17 la6. WED I6~J6 FAY ~2 8i-l iOlO If:J UUl. N~W~ RELEASE . .'lrpa"'"c"t oftl", Tmm:'J' FmanaalManagement ServIce DIq ytashiAgfon, D.C. 20227 202/874-6750 contact: FOR IMMEDIATE RELEASE January 17, 1996 Mary Hewitt (202) 874-7085 RELEASE OF MONTHLY TREASURY STATEMENT DELAYED The release of the Monthly Treasury Statement for December 1995 will be delayed due to the federal government closure because of inclement weather in Washington, D.C. The statement will be released at 2 p.m. Tuesday January 30, 1996. -30- RR-822 PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 23, 1996 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECTED BY FLOODS IN PENNSYLVANIA The Bureau of Public Debt took action to assist victims of floods that struck Pennsylvania by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of Pennsylvania affected by the floods. These procedures will remain in effect through February 29, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area. Most financial institutions serve as paying agents for savings bonds. The counties of Allegheny, Bedford, Blair, Bradford, Cambria, Centre, Clearfield, Columbia, Cumberland, Dauphin, Fayette, Huntingdon, Lackawanna, Luzerne, Lycoming, McKean, Mifflin, Montour, Northumberland, Perry, Somerset, Snyder, Westmoreland, Washington, Wyoming, York, are included in the initial declaration. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect for those areas. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-1048, available at most financial institutions or the Federal Reserve BanJe Bond owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number, approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-207 (RR-823) UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 23, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES Tenders for $18,251 million of 2-year notes, Series AB-1998, to be issued January 31, 1996 and to mature January 31, 1998 were accepted today (CUSIP: 912827W57). The interest rate on the notes will be 5%. All competitive tenders at yields lower than 5.068% were accepted in full. Tenders at 5.068% were allotted 99%. All noncompetitive and successful competitive bidders were allotted securities at the yield of 5.068%, with an equivalent price of 99.872. The median yield was 5.050%; that is, 50% of the amount of accepted competitive bids were tendered at or below that yield. The low yield was 5.010%; that is, 5% of the amount of accepted competitive bids were tendered at or below that yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $44,814,449 Accepted $18,251,210 The $18,251 million of accepted tenders includes $1,642 million of noncompetitive tenders and $16,609 million of competitive tenders from the public. In addition, $807 million of tenders was also accepted at the high yield from Federal Reserve Banks for their own account in exchange for maturing securities. The $1,642 million noncompetitive total includes $950 million awarded to foreign official institutions. RR-824 TREASURY NEWS omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. _ 20220 _ (202) 622-2960 FOR RELEASE AT 2:30 P.M. January 23, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series of Treasury bills totaling approximately $28,000 million, to be issued February 1, 1996. This offering will provide about $2,350 million of new cash for the Treasury, as the maturing weekly bills are outstanding in the amount of $25,662 million. Federal Reserve Banks hold $6,805 million of the maturing bills for their· own accounts, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $5,855 million as agents for foreign and international monetary authorities, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-825 For press releases, speeches, public schedules and official biographies, call our 24·hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED FEBRUARY 1, 1996 January 23, 1996 Offering Amount . $14,000 million $14,000 million Description of Offering: Term and type of security . CUSIP number Auction date Issue date Maturity date Original issue date Currently outstanding Minimum bid amount Multiples . 91-day bill 912794 Y5 7 January 29, 1996 February 1, 1996 May 2, 1996 May 4, 1995 $30,750 million $10,000 $ 1,000 182-day bill 912794 3B 8 January 29, 1996 February 1, 1996 August 1, 1996 February 1, 1996 $10,000 $ 1,000 The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date UBLIC DEBT NEWS Department of the Treasury • Bureau of the Publ)" c D Wsh"Ington, DC 20239 ebt.a FOR IMMEDIATE RELEASE January 24, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 5-YEAR NOTES Tenders for $12,005 million of 5-year notes, Series E-2001, to be issued January 31, 1996 and to mature January 31, 2001 were accepted today (CUSIP: 912827W65). The interest rate on the notes will be 5 1/4%. All competitive tenders at yields lower than 5.360% were accepted in full. Tenders at 5.360% were allotted 35%. All noncompetitive and successful competitive bidders were allotted securities at the yield of 5.360%, with an equivalent price of 99.523. The median yield was 5.304%; that is, 50% of the amount of accepted competitive bids were tendered at or below that yield. The low yield was 5.260%; that is, 5% of the amount of accepted competitive bids were tendered at or below that yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $26,689,113 Accepted $12,005,113 The $12,005 million of accepted tenders includes $341 million of noncompetitive tenders and $11,664 million of competitive tenders from the public. In addition, $800 million of tenders was also accepted at the high yield from Federal Reserve Banks for their own account in exchange for maturing securities. The $341 million noncompetitive total includes $50 million awarded to foreign official institutions. RR-826 DEPARTMENT OF THE TREASURY TREASURY ~f.Jl @IN E ~~$ - W S ~~/789~. . . . . . . . . . . . . . . . . . . . . . . . . .. . . ............................ OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE January 24, 1996 STATEMENT OF TREASURY SECRETARY ROBERT E. RUBIN As we have said from the very beginning, the nation's creditworthiness is critical to all of us. I am confident that Congress will enact a straightforward debt limit increase. And we are prepared to work to this end. -30- RR-827 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 24, 1996 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECTED BY FLOODS IN MARYLAND The Bureau of Public Debt took action to assist victims of floods that struck Maryland by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of Maryland affected by the floods. These procedures will remain in effect through February 29, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area. Most financial institutions serve as paying agents for savings bonds. The counties of Allegany, Cecil, Frederick, Garrett and Washington are included in the initial declaration. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect for those areas. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-1048, available at most financial institutions or the Federal Reserve Bank. Bond owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number, approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-208 (RR-828) DEPARTMENT OF THE TREASURY ~~/78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .............................. OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 ADV 11:30 AM. EST Remarks as prepared for delivery January 26, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN U.S. CONFERENCE OF MAYORS As Treasury Secretary with broad responsibilities for economic policy, I am firmly convinced that our economy will fall far short of its potential if we ignore the problems of our cities and distressed rural areas. That's not a social judgment. It is not a moral judgment. It is a hard-headed business judgment about the future economic health of our nation. Right now, the Congressional majority and the Administration are engaged in what is probably what is probably the most significant public policy debate in decades -one about how to best prepare our economy for the coming years and decades. This debate is central to the future of our cities. And in my view the future of our cities is central to the future of our economy, our nation, and all Americans, no matter where they live or work. I think: most of you are familiar with the core differences in the budget debate -education, training, investment in human capital, the environment, health care and taxes. Unfortunately, the issue of the debt limit also has made its way into that debate. The debt limit -- which is about meeting existing obligations, not about deficit reduction, which can only be accomplished through the budget process -- must be separated from the budget debate. In the State of the Union address this week the President again asked Congress for a straightforward extension of the debt ceiling -- that is, an extension that is free of efforts to use the debt ceiling and use threats to the creditworthiness of the nation as a device to create pressure to accomplish other purposes. Also, a debt ceiling increase should be at least one year, so that the nation's creditworthiness is not again subject to question -- as in the Moody's creditworthiness announcement of earlier this week -- in this political election year. RR-829 (more) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 In the final analysis, I am confident, the United States will not fail to meet its legally mandated financial obligations for the first time in our history, interest and principal on debt, the funding of urban initiatives and the like, and that Congress will pass a straightforward extension. But it is very important that all of us get involved in calling for this to be done, and expeditiously. With that, let me return to be the budget debate and the cities. For the past three years, economic conditions have been better than they have been in decades, with growth well over 3 percent per annum, inflation well under 3 percent per annum, unemployment down from 7.1 percent to 5.6 per annum, and 7.8 million new jobs. Alan Greenspan, the Chairman of the Federal Reserve Board, testified last year that the fundamentals of our economy have not looked this strong in 30 years. And he's right. Moreover, while many factors have contributed, a key and indispensable factor was the presidents powerful 1993 deficit reduction budget -- which has reduced the deficit by roughly 50 percent, which in tum fueled the lower long-term interest rates that drove and sustained the recovery. But not everyone, as you know too well, has benefited from our strong economy. A recent Committee for Economic Development report said that a third of the neighborhoods in our 100 largest cities are distressed or in danger. The Census Bureau calculates that well over four in 10 Americans in poverty live in our inner cities. The Organization for Economic Cooperation and Development (OECD) in Paris ranks us at the top of a list of 18 industrialized nations in income disparity. Moreover, the study also tells us that a greater percentage of our children are poor than in almost all other Western industrialized nations. The number of children in this country under the age of 18 who live in poverty rose by roughly half between 1979 and 1993. That is not a recipe for a healthy future for any American. Our responsibility in reviving the cities is clear: we must replace economic distress with economic opportunity, and we must increase investments in human capital and access to financial capital. The Clinton Administration believes it is imperative to empower the residents of our inner cities and distressed rural areas with the education and job skills -- and the opportunity -- to get jobs, build businesses, and regain hope. Let me focus for a moment on financial capital, as befits a Secretary of the Treasury. Treasury has as one of its high priorities to encourage the private sector to bring capital to areas that for too long have been forgotten or ignored. 3 Accomplishing that aim can help create new businesses and jobs, and can even help restore whole neighborhoods. I have seen this approach work, in visiting the South Bronx and South Chicago. It works in rural Iowa, and it can work throughout our nation. To provide access to capital for distressed areas, we must stand by proven programs that are now under threat; we must continue to develop innovative solutions to get capital where it is needed; and the private sector must rise to the challenge in partnership with local communities. The first example is the Community Reinvestment Act. The CRA encourages federally insured financial institutions to serve creditworthy borrowers in neighborhoods which have either been ignored or overlooked in the past. New regulations, developed in cooperation with the lending industry and community representatives, are now going into force, replacing rules that had emphasized paperwork and process rather than on-the-ground action. We believe these reforms deserve a chance to work and should not be undercut; others want to roll back CRA. Second, Treasury's Community Development Financial Institutions Fund provides seed capital through loans, grants and equity investments to community developmentfocused banks, credit unions, microenterprise lenders, and the like. In ~ these entities make loans and investments to help small businesses and build housing, and they help people find jobs and start businesses. The fund also provides incentives to mainstream financial institutions to engage in community development activities. Three years ago this project had broad bipartisan support, but it would have been defunded by the reconciliation bill the President vetoed. Some $50 million has previously been appropriated for the CDFI fund, but that is far, far too little for such a promising program. We can not let the Fund, grounded in an empowerment response to the problems of our distressed communities, be destroyed. Also, in my conversations with mayors and local businessmen around the country, I have noted that cities and businesses can join together in investing in local community development funds, helping to bring jobs and growth to their communities. Third, we are taking new steps to advance micro enterprise lending, an approach the President and Mrs. Clinton have encouraged since their days in Arkansas. It has had remarkable success in low income areas in other countries and might well here too if applied on a broad scale. 4 Microenterprise lending puts money into the hands of individuals -- often very low-income individuals -- who need very limited amounts of capital to get started. Examples include lending someone who wants to start a tailors' shop enough money for a sewing machine, or lending a mechanic money for special tools to take on more complex and profitable repair jobs. President Clinton has asked Treasury to launch a micro enterprise project through the CDFI Fund, including the coordination of existing programs in other parts of the government. Moreover, at the President's direction, we will soon establish a Presidential Award program for microenterprise lenders to compete for recognition just as large American corporations compete for the Baldrige award. Fourth, in 1993 we made permanent the Low Income Housing Tax Credit to encourage investment in housing. As I walked around the South Bronx and talked to community leaders and businessmen, they repeatedly told me of the tax credit's critical role. According to the National Council of Housing Agencies, on average, 100,000 units a year of low income housing has been created with this credit each year since its enactment. This program would have been sunseted in the reconciliation bill the President vetoed. Fifth, as the President announced in his State of the Union address this week and discussed with you yesterday, the administration is taking up an issue long on your agenda. That is, of course, a new targeted tax incentive to encourage companies to clean up abandoned industrial sites and other environmentally damaged properties in distressed areas. This so-called ''brown fields tax credit" holds real prospects for more rapidly getting these contaminated properties in distressed areas productive again. The final point I would like to make about broadening access to capital and promoting growth in our inner cities and other distressed areas, is the critical role of business, particularly in this era of budget stringency. Many of our businesses are already actively involved on an on-going basis in our inner cities and other distressed areas. But I think that it is very much in their long-term self-interest to increase that activity, institutionalize it and put it on an on-going basis. I have started to have discussions about finding ways to accomplish this institutionalization with corporate leaders, both in Washington and when I meet with CEOs outside Washington. The areas we discuss are assisting community development with loans, investments and expertise; mentoring inner city businesses and inner city youth; forging school-to-work links, providing meaningful summer jobs, and helping young people climb the job ladder as their skills progress. 5 To conclude, all of us must rise to the challenge to bring our cities and all Americans into the economic mainstream. If we do not meet that challenge, the United States will fall far short of its full potential in the global economy of the 21st Century, thus, the future of the cities is of vital importance to all Americans, no matter where they work or live. -30- DEPARTMENT OF THE TREASURY OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANlAAVENUE, N.W. - WASHINGTON, D.C. - 20220 _ (202) 622-2960 FOR RELEASE AT 2:30 P.M. January 26, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S 52-WEEK BILL OFFERING The Treasury will auction approximately $18,750 million of 52-week Treasury bills to be issued February 8, 1996. This offering will provide about $1,300 million of new cash for the Treasury, as the maturing 52-week bill is currently outstanding in the amount of $17,455 million. In addition to the maturing 52-week bills, there are $27,849 million of maturing 13-week and 26-week bills. Federal Reserve Banks hold $11,948 million of bills for their own accounts in the maturing issues. These may be refunded at the weighted average discount rate of accepted competitive tenders. ~ Federal Reserve Banks hold $3,885 million of the maturing issues as agents for foreign and international monetary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Foreign and international monetary authorities are considered to hold $411 million of the maturing 52-week issue. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in this auction. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about the new security are given in the attached offering highlights. 000 Attachment 0.-830 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERING OF 52-WEEK BILLS TO BE ISSUED FEBRUARY 8, 1996 January 26, 1996 Offering Amount . $18,750 million Description of Offering: Term and type of security CUSIP number Auction date Issue date Maturity date Original issue date Maturing amount. Minimum bid amount Multiples . 364-day bill 912794 2L 7 February 1, 1996 February 8, 1996 February 6, 1997 February 8, 1996 $17,455 million $10,000 $1,000 Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10% (2) Net long position for each bidder must be reported when the Burn of the total bid amount, at all discount rates, and the net long position are $2 billion or greater. (3) Net long position must be determined as of onehalf~~our prior to the closi.ng time -for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders . Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve bank on issue date PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 26, 1996 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECfED BY FLOODS IN WEST VIRGINIA The Bureau of Public Debt took action to assist victims of floods that struck West Virginia by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of West Virginia affected by the floods. These procedures will remain in effect through February 29, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area. Most financial institutions serve as paying agents for savings bonds. The counties of Brooke, Grant, Greenbriar, Hampshire, Hancock, Hardy, Marshall, Mason, Monroe, Ohio, Pendleton, Pleasants, Pocahontas, Preston, Randolph, Summers, Tucker, Tyler, Webster, Wetzel and Wood are included in the initial declaration. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect for those areas. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-1048, available at most financial institutions or the Federal Reserve Bank. B~md owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number, approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-209 (RR-831) DEPARTMENT TREASURY OF THE TREASURY NEWS ~~/78~q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111 .................................... OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 Monthly Release of U.S. Reserve Assets The Treasury Department today released U.S. reserve assets data for the month of December 1995. As indicated in this table, U.S. reserve assets amounted to $85,832 million at the end of December 1995, up from $85,755 million in November 1995. End of Month Total Reserve Assets Gold Stock 1/ Special Drawing Rights 1/1/ Foreign Currencies ~/ Reserve Position in IMF 2/ 1995 November 85,755 11,050 11,034 49,099 14,572 December 85,832 11,050 11,037 49,096 14,649 1/ 1/ 1/ ~/ Valued at $42.2222 per fine troy ounce. Beginning July 1974, the IMF adopted a technique for valuing the SDR based on a weighted average of exchange rates for the currencies of selected member countries. The U.S. SDR holdings and reserve position in the IMF also are valued on this basis beginning July 1974. Includes allocations of SDRs by the IMF plus transactions in SDRs. Includes holdings of Treasury and Federal Reserve System; beginning November 1978, these are valued at current market exchange rates or, where appropriate, at such other rates as may be agreed upon by the parties to the transactions. RR-832 Far press releases, speeches, public schedules and official biographies, call our 24-hollr fax line at (202) 622-2040 OFFICE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE; N.W.-WASHINGTON, D.C. - 20220 - (202) 622-2960 EMBARGOED FOR 4:30 P.M. EST RELEASE January 26, 1996 Contact: Michelle Smith (202) 622-2960 RUBIN ANNOUNCES MEXICAN REPAYMENT OF $1.3 BILLION Treasury Secretary Robert E. Rubin confinned Friday that Mexico will repay the United States $1.3 billion due on Monday in short-term swaps -- half to Treasury's Exchange Stabilization Fund (ESF) and half to the Federal Reserve System. "We continue to see further evidence that the program is working to restore stability and the basis for growth, and we are confident the United States will be paid back with interest for the assistance we have provided to Mexico under the support program," Secretary Rubin said. In providing assistance to Mexico under the Feb. 21, 1995, agreements, the Administration acted to protect America's interest in exports and jobs, the security of our common border and the stability of other emerging market economies. "Mexico rapidly regained access to international capital markets, and has established the basis for a resumption of growth," Secretary Rubin said. "This program helped avert years of financial tunnoil and lost economic opportunity which Mexico and the rest of Latin America endured following the 1982 crisis." After this repayment, outstanding U.S. support will fall to $10.5 billion, all of it in the form of medium-tenn swaps. Under the program, Mexico has paid about $750 million in interest to date on its swaps to the United States. No additional principal payments are due to the United States until June 1997. Secretary Rubin also announced that Mexico has requested that the implementation period of the program be continued through Aug. 21. 1996, as provided for in the U. S.Mexico Financial Agreements of Feb. 21, 1995. Treasury will consent to this request. -30- RR-833 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 Removal Notice The item identified below has been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to copyright protections. Citation Information Document Type: Transcript Number of Pages Removed: 4 Author(s): Title: NPR "Morning Edition", "Rubin 'absolutely confident' U.S. Won't Default" Date: 1996-01-25 Journal: Volume: Page(s): URL: Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org DEPARTMENT OF THE TREASURY ~/78~q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .................................... OmCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C •• 20220 • (202) 622-2960 FOR IMMEDIATE RELEASE January 29, 1996 Contact: Jon Murchinson (202) 622-2960 BORROWING ADVISORY COMMITIEE MEETING, REFUNDING PLANNED The Treasury Department's Borrowing Advisory Committee will hold an open meeting at 11:30 a.m. Tuesday, January 30, 1996 at the Treasury Department, room 3327, 1500 Pennsylvania Avenue NW. Assistant Secretary (Financial Markets) Darcy Bradbury will announce the Treasury Department's quarterly refunding at 1 p.m. on Wednesday, January 31, 1996 in room 3327 of the Treasury Department. Media without Treasury, White House, State, Defense or Congressional credentials wishing to attend should contact the Office of Public Affairs at (202) 622-2960, with the following information: name, Social Security number and date of birth, by 6 p.m. Monday, January 29 for Tuesday's event and by 6 p.m. Tuesday, January 30 for Wednesday's event. This information can be faxed to (202) 622-1999. -30- RR-834 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 VBLIe DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 29, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $14,083 million of 13-week bills to be issued February 1, 1996 and to mature May 2, 1996 were accepted today (CUSIP: 912794Y57). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.96%5.02% 5.01%- Investment Rate 5.11% 5.17% 5.16% Price 98.746 98.731 98.734 Tenders at the high discount rate were allotted 36%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $45,132,947 Accepted $14,082,927 $40,221,635 1.371,397 $41,593,032 $9,171,615 1.371.397 $10,543,012 3,255,115 3,255,115 284,800 $45,132,947 284,800 $14,082,927 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.97 -- 98.744 RR-835 5.00 -- 98.736 UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt fe:Washington, DC 202?9 FOR IMMEDIATE RELEASE January 29, 1996 C0N':f~§Ttj Otfice . - ~.,,' u ,at Financing L2 biJ- 219 - 3 3 5 0 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $14,003 million of 26-week bills to be issued February 1, 1996 and to mature August 1, 1996 were accepted today (CUSIP: 9127943B8). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.86!!> 4.90!!> 4.90!!> Investment Rate 5.07!!> 5.11!!> 5.11!!> Price 97.543 97.523 97.523 Tenders at the high discount rate were allotted 39!!>. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $45,210,454 Accepted $14,003,196 $37,699,285 1,236,769 $38,936,054 $6,492,027 1, 236« 769 $7,728,796 Type Competitive Noncompetitive Subtotal, Public RR-836 Federal Reserve Foreign Official Institutions TOTALS 3,550,000 3,550,000 2,724,400 $45,210,454 2,724,400 $14,003,196 4.88 -- 97.533 4.89 -- 97.528 DEPARTMENT OF THE TREASURY NEWS TREASURY omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 FOR RELEASE AT 3 PM January 29, 1996 Contact: Jon Murchinson (202) 622-2960 TREASURY ANNOUNCES MARKET BORROWING ESTIMATES The Treasury Department announced on Monday that its net market borrowing for the January - March 1996 quarter is estimated to be $85.3 billion, with a cash balance of $20 billion on March 31. The Treasury also announced that its net market borrowing for the April - June 1996 quarter is estimated to be in the range of $0 to $5 billion, with a cash balance of $35 billion on June 30. These estimates do not include new cash to be raised in the June 2-year and 5-year notes, which will settle on July 1, 1996. In the quarterly announcement of its borrowing needs on October 30, 1995, the Treasury estimated net market borrowing for the January - March quarter to be in a range of $70 billion to $75 billion, assuming a $20 billion cash balance on March 31. The current estimate primarily reflects a shift in outlays from the first quarter of the fiscal year to the second quarter. Given the uncertainty with respect to the timing of final action on several appropriation bills for FY 1996, it is possible that the Treasury's borrowing requirement in the January - March quarter will be reduced from the $85.3 billion that the Treasury announced today. Actual net market borrowing in the October - December quarter was $48.1 billion, while the end-of-quarter cash balance was $20.5 billion. On October 30, the Treasury estimated net market borrowing for the October - December quarter to be $61.5 billion, with a $20.0 billion cash balance on December 31. The difference in net market borrowing was primarily the result of lower than estimated outlays. The regular Treasury quarterly refunding press conference will be held at 1 p.m. on Wednesday, January 31, 1996. -30RR-837 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 TREASURY FINANCING REQUIREMENTS October - December 1995 $Bil. , - - - - - - - - - - - - - , - - - - - - - - - - - - - - - - - - - , $Bil. Uses Sources 150 150 125 125 100 100 State and Local 75 75 50 50 25 25 o o 1 Includes budget deficit, changes In accrued Interest and checks outstanding and minor miscellaneous debt transacttons. Department of the Treasury Office 01 Marl(el Finance January 29. 199Q.1 TREASURY FINANCING REQUIREMENTS January - March 1996 $Bil . - - - - - - - - - - - - - - - - . - - - - ' - - - - - - - - - - - - - - - - - - - , $Bil. Sources Uses 200 200 150 150 State and Local • 100 8 • 1 Deficit 1 Department 01 the Treasury Office of Market Finance Savings Bonds • Net Market. 851/4 BorrOWing Includes budget deficIt, changes In accrued Interest and checks outstanding and minor miscellaneous debt transactions. 2 Issued or announced through January 26. 1996. 3, Assumes a $2) billion cash balance March 31, 1996. 100 Decrease in Cash Balance 3 50 • '12 ======........! 0 January 29 '\99&.2 TREASURY OPERATING CASH BALANCE $Bil.,---------------=::::.:::.:..:.:.:........:~~L---------~-- jl Without New Borrowing JI I 40 I 20 o~---------------------Federal Reserve Account I ..... -20 I -40 I I I I I -60 # 1# _80L---~--~--~--~---L--~--~--~--~----L---L---L---~--~--~ Jan Feb Mar Apr May Jun Jul 1995 y Aug Sep Oct Nov Dec Jan Feb 1996 Mar Assumes refunding of maturing issues. Department of the Treasury January 29,1996-3 Office of Marlc.et Finance $Bil. TREASURY NET MARKET BORROWING 11 .------~~=-=-=----------------------_,$IBil Coupons Over 10 yrs. I:ZI 100 [J 84.6 100 5 - 10 yrs. Y ~ 2 - under 5 yrs 80 • Bills 60 60 40 40 20 o -20 -20 -40L---II---II-I--'V-L---~II-~II~I--~IV~~--~II--~II~1~I~V~~-~II--~II~I~I~V~~~;O 1992 J../ Y Y Departmenl of the Tfeas.UIY Office 01 Markel Finance 1993 1994 1995 1996 Excludes Federal Reserve and Government Account Transactions 7 year note discontinued after April 1993. Issued or announced through January 26. 1996. January 2"9,199£4 NET NEW CASH FROM NONCOMPETITIVE TENDERS IN WEEKLY BILL AUCTIONS 11 $ M i l . r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Discount Rate % 500 6.5 ..-., 400 Net New Cash (left scale) o 26 week -', Discount Rate (right scale) 26 week 13 week . 1 3 week 6.0 300 5.5 200 7""'w-oH 100 5.0 -100 -200 -300 -400 Feb Jan Mar Apr May Jun Jul Aug Sep Oct Nov Dec Y Excludes noncompetitive tenders from foreign offiCial accounts and the Federal Reserve account. p Preliminary Department 01 the Traesurv Offic~ 01 Mar~el Jan P 1996 1995 January 29, 1996-5 Finance NONCOMPETITIVE TENDERS IN TREASURY NOTES AND BONDS 1I $ 9 ; 1 . r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $8;1. CJ2 &5Year - 3.5 f-- - 3.0 2.51- - 2.5 - 2.0 - 1.5 3.5 f-- [3:fZY~k:13, 10 & 30 Year 3.0 % 2.0 f-- 1.5 f-- 1 " 0 2 ~ ;;"' r· ~ ,. 1.0 1.0 I - 4 'V i f 1 0 ~ ~ ~ 0.51- J r- 0.5 , ~ F M A M 1993 J 1994 1995 y' Excludes foreign add·ons from noncompetitive tenders Since October 18, 1995, foreign add-cns have been prohIbited to avoid exceeding the debt hmlt. foreign rollovers are also excluded from noncompetitive tenders p Preliminary Treasury increased the maximum noncompetitive award to any noncompetitive bidder to $5 million effective November 5,1991 Effective February 11, 1992, a noncompetitive bidder may not hold a position In WI tradmg, futures, or forward contracts, nor submit both competItIve and noncompetItive bids for 1tS own account Department of tt1e T reasliry Office of MerKet Fmance January 29 '996·6 SECURITIES HELD IN STRIPS FORM 1994-1996 Privately Held $S "II ,-----------------.:....-------------~ $Sil" - Stri!!!!able Stri!!!!ed As of January 31, 1994: $694.9 billion, $210.3 billion 80 D As of January 31,1995: $760.5 billion, $226.9 billion [0J :j.:: As of January 19,1996: $802.5 billion, $222.6 billion .'~:.::. 80 60 60 40 40 20 20 o Less than 5 years 5-10 years 10-15 years 15-20 years 20-25 years 25-30 years o Years Remaining to Maturity Note: The STRIPS program was established in February 1985. The 11 5/8% note of November 15, 1994, Issued on November 15, 1984, was the first STRIPS-eligible secunty to mature . • Less than $3 million. Oepartment 01 the Traasul)! Office 01 MarKet Finance Jenuary29,1996-7 SECURITIES HELD IN STRIPS FORM 1994-1996 Percent of Privately Held 0/0 r------------------------------------------------------------------------,% 80 _ As of January 31,1994 D AsofJanuary31,1995 80 ~ As of January 19, 1996 60 60 40 40 20 20 o Less than 5 years 5-10 years 10-15 years 15-20 years 20-25 years 25-30 years o Years Remaining to Maturity Note: The STRIPS program was established In February 1985. The 11 5/8% note of November 15, 1994, Issued on November 15, 1984, was the first STRIPS-eligible secunty to mature . Department ollhe Treasury Office of Marlt:el Finance • Less than 1 percent. January 29, 199&-8 TREASURY NET BORROWING FROM NONMARKETABLE ISSUES $Bil. $Bil. 7.8 8 8 6 6 4 4 2 2 0 0 -2 -2 -1.1 -0.3 -4 -4 -1 .1 -6 -8 -10 -1.7 D Savings Bonds D State and Local Series • -2.3 -6 -4.7 -8 -6.7 -7.3 -8.9 Foreign Series -5. -10 -12 -12 -14 ~------------L-------------L-------------~----------~--~_14 II III 1992 IV II III IV II 1993 III IV 1994 II III IV 1995 Ie 1996 e estimate Department 01 the Treasury OffiCE! 01 Mar1<:el Finance January 29, 199&-9 SALES OF UNITED STATES SAVINGS BONDS 1980 - 1995 $Bil. 6 5 ;t. 4 Total Sales 3 2 • Payroll Sales O~~~Lu~~~~~~~~~~~~~~~.u~~~~~ 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 End of Quarter e estimate Department 01 the Treasury Office of Markel Fmance January 29.199&-10 STATE & LOCAL GOVERNMENT SERIES .. . . .•. ., . .. $ B i l . r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $Bil. •..• ...... .... ••• ~ •• 10 • ~ --~~ - 5 ••• .#. #. ~.. # •• ... .... .. .. ..: : ~.. • • 10 .~ 5 Redemptions o 0 $Bil. $Bil. o 0 -5 -5 -10 II III II IV 1991 III 1992 IV II III 1993 IV II III IV II III -10 IV 1995 1994 Note: SLGS sales were suspended effective October 18,1995. Department of the Treasury Office of M81~el January 29, 199&-11 Finance STATE AND LOCAL MATURITIES 1996-1998 $BiI 8 r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $Bil. 8.0 8 6 6 4 4 2 2 ......III 1996 Department of the Treasury O11Jce of Markel Fmance .... 0 IV 1997 1998 January 29.1996-12 QUARTERLY CHANGES IN FOREIGN AND INTERNATIONAL HOLDINGS OF PUBLIC DEBT SECURITIES $ B i l . r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $Bi' 65 Nonmarketable 60 55 50 45 40 .. 65 60 55 50 45 D·· Marketable o Net Auction Awards to Foreign .u • Other Transactions 40 35 30 25 20 15 10 35 30 25 20 15 10 5 o -5 -10 -0.1 -15~-----~-----~----~-----~-----~ " '" 1991 'V II "' 1992 'V II "' 1993 'V II "' 1994 'V II "' IVY 5 0 -5 -10 -15 1995 .2/ Auction awards to foreign offiCial purchasers netted against holdings of matunng securities Y Data through November 30. 1995. Department 01 the Treasury Qthce 01 Ma~et FII"I8.r>ee January 29,199&13 FOREIGN HOLDINGS AS A PERCENT OF TOTAL PRIVATELY HELD PUBLIC DEBT Percent - - - - - - - - - - - - - - - - - - - - - - - - - Percent Quarterly Departrr.ent oi llle Tfaasury Office of Market Flrlance January 29.1996-14 MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES December 31, 1993 I $ Country Billions [Total ! United Kingdom I I Germany Total Foreign I Japan December 31,1994 ! As a % of IAs a % of Prtvate I . 1 $ Billions! I November 30, 1995 IAsa%of IAsa%of Asa%of iAsa%of i I Total ,Private Total Foreign [I $ Billions I Total I Foreign I I Total Private $142.7 22.9% 4.7% $175.7 25.5% 5.5% I $225.1 25.6% 6.8% 68.4 11.0% 2.2% 91.0 13.2% 129.9 14.8% 3.9% 1.5% 54.4 7.9% 2.9% II 1.7% II 553 6.3% 1.7% 27.6 4.0% 0.9% 52.2 5.9% 1.6% 32.4 4.7% 1.0% 35.6 4.1% 1.1% 330 3.8% 1.0% 31.5 3.6% 0.9% II 46.4 7.4% Netherland Antilles 17.1 2.7% Switzerland 32.6 5.2% 0.6% 1.1% Singapore 18.2 2.9% 0.6% 21.9 3.2% 0.7% II I I 4.6 0.7% 0.2% 20.5 3.0% 0.6% I OPEC 26.7 4.3% 0.9% 25.6 3.7% 0.8% i 293 3.3% 09% Canada 22.8 3.7% 0.7% 24.6 3.6% 0.8% I 25.0 2.8% 0.8% Taiwan 28.2 4.5% 0.9% 25.8 3.7% 0.8% 23.6 2.7% 0.7% Spain 31.2 5.0% 1.0% 27.9 4.1% 0.9% 19.7 2.2% 0.6% 0.6% Mainland China II Hong Kong 13.7 2.2% 0.4% 13.8 2.0% 0.4% 18.8 2.1% Mexico 23.2 3.7% 0.8% 7.9 1.1% 0.2% 16.6 1.9% 0.5% Belgium 12.0 1.9% 0.4% 13.1 1.9% 0.4% I 14.7 1.7% 0.4% I France Other Estimated Foreign Total II ! 8.9 1.4% 0.3% [ 9.7 1.4% 0.3% 126.2 20.3% 4.1% j. 116.7 16.9% 3.7% 622.9 100.0% 688.6 100.0% 21.7% Note: RP's are Included I 20.4% In 11 il 9.3 1.1% 0.3% 158.6 18.1% 4.8% 878.2 100.0% 26.4% "other". Detail may not add to totals due to rounding Source: Treasury Foreign Portfolio Investment Survey benchmark as of end-year 1989 and monthly data coliected under the Treasury International Capital reporting system. January 29.1996-15 Department of the Treasury QttlCe of Maril.el Fln.ence NET AWARDS TO FOREIGN OFFICIAL ACCOUNTS.!! $BiI. , . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $Bil. 9.3 10 6.1 6.0 5 4.1 2.1 3.6 4.5 10 8.8 4.7 6.4 6 .2 3.0 3.9 3.8 5 o 0 -5 -5 -5.7 -10 -10 Notes -15 c::J 5 years and over c:::J 2-3 years - -15 Bills -20 L---II~II~I~I~V-L~~II~I~II~I~V~~~II~II~I~I"V~~~II~II~I'luV~-'-'II~~~"~ IY -20 1996 1991 1992 1993 1994 Quarterly Totals y Department of the Treasury Office 01 Marl<el Finance Noncompetitive awards to foreign offiCial accounts held in custody at the Federal Reserve In excess of foreign cuslody account holdings of maturing securities Foreign add-ons prohibited since October 18,1995 to aVOid exceeding the debt limit. Y Through January 26, 1996 January 29 1995-16 SHORT TERM INTEREST RATES Quarterly Averages %.-----------------------------------------------------------------~% Through 10 10 8 8 6 6 3 Month Treasury Bill 4 1985 1986 1987 4 1988 1989 1990 1991 1992 1993 1994 1995 Oepartmanl 01 the T masury Office 01 Mar1<et Fu,ance 1996 January29 1996-17 SHORT TERM INTEREST RATES Weekly Averages %.-------------------------------------------------------------------,0/0 9 9~------------------~ • Prime Rate 8 8 Through 7 January 24 Federal Funds 1 Commercial Paper • 6 ...... ~ • 5 3 Month Treasury Bill Apr May Jun Jul Aug 1995 7 Sep Oct Nov Dec 5 Jan 1996 Department 01 ttle Treasury Office 01 Markel Finance January 29.1996-18 LONG TERM MARKET RATES ~or-______________--__--____----__Q_u_a_rt_e_r~IY~A_v_e_ra~g~e_s~____________-----------------~o 12 12 11 11 New Aa Corporates • 10 Through January 24 - 9 8 ! ~ ff =- 9 -- 8 ~ 7 7 6 6 5~--~----~----~---J----~----~---J-----L----~ 1985 1986 1987 1988 1989 1990 1991 1992 1993 __~________~5 1994 Department olll1e Treasury 1995 1996 January 2e 199&-19 Office 01 MarKel Finance INTERMEDIATE TERM INTEREST RATES Weekly Averages' .... ~or---------------------------------------------------------------------------- 8 '--\ \ .... _ , .,." , -, FHLMC 30-Year Conventional ... , "' ~' \' ,-, .... .... Through January 24 " 7 .... _-- 8 ~ ' ... ~ ' ........ - 7 6 6 Treasury 5-Year 5 L--A-p-r-----M-a~y----J-u-n--~--J-UI-----A~u-9----~s~e-p----~O-c~t--~N70-v----~D~e-C----J~a-n~ 5 1995 • Salomon 1D-yr. AA Industrial Department 01 the Treasury Qf1ice of Markel Flnan(;.9 1996 IS a Thursday rate. January 29 199&20 MARKET YIELDS ON GOVERNMENTS %r-----~----,-----,-----_r----_r----_r----_T----~----~----~% 6.0 6.0 5.8 5.8 5.6 5.6 .( 5.4 5.4 5.2 5.2 • 5.0 5.0 January 29, 1996 4.8 4.8 4.6 5.8 5.8 5.6 5.6 4.6 4.4 '--____.l....-_ _ _ _..L--_ _ _ _...l.-____....l..-____-I......_ _ _ _- L____--L____-.L____---L____- . l 4.4 o 2 3 4 5 6 7 8 9 10 Years to Maturity Department of 1M Treasury january 30,199&-21 Office of Market Finance PRIVATE HOLDINGS OF TREASURY MARKETABLE DEBT BY MATURITY $Bil. .-------------------------------------------------------------..... 2800 2600 2400 2200 2000 1800 1600 1400 D D D D Over 10 years II Bills 2-10 years 1-2 years 1 year & under 1200 1000 800 600 400 L---------- 200 o 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 As of December 31 Department of the Treasury Office of Mari(et FIMnce January 29.1996-22 PRIVATE HOLDINGS OF TREASURY MARKETABLE DEBT Percent Distribution Coupons D DOver 10 years D 2·10 years 1·2 years o 1 year & under • Bills 100% 14 80 34 60 40 20 o 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 As of December 31 Department of the Treasury January 29. lG96-23 Office of Mar'Ket Finance AVERAGE LENGTH OF THE MARKETABLE DEBT Privately Held years--------------------------------------------------------' . - June 1947 Months 10 Years 10 5 Months December 31,1995 66 5 Years, 3 Months 9 8 7 \ 64 62 60L-~~~~~~~~~~~~ JFMAMJJASONO 6 5 4 3 December 1975 2 Years 5 Months 1 2LLLULULULULU~~~~~~~~LLLLLLLLLLLULW~JJJJ~ 19454749 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 Department 01 tI'le Treasury Office 01 Mar'Ket Fmance Januflry 29,1996·24 MATURING COUPON ISSUES February - June 1996 (in millions of dollars) December 31,1995 Held by Maturing Coupons 87/8% 77/8% 45/8% 71/2% 45/8% 73/4% 51/8% 93/8% 75/8% 51/2% 73/8% 4114% 75/8% 57/8% 77/8% 6 % Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note 02/15/9621 02/15/96 02/15/96 02/29/96 02/29/96 03/31/96 03/31/96 04/15/96 04/30/96 04/30/96 05/15/96 05/15/96 05/31/96 05/31/96 06/30/96 06/30/96 Total Federal Reserve & Government Accounts 8,575 9,055 19,537 9,622 18,949 9,081 19,579 7,782 9,496 18,806 20,086 19,264 9,617 18,927 Private Investors Foreign 1l Investors 7,959 7,628 15,709 8,366 18,501 7,962 17,599 6,995 8,570 18,006 18,012 17,036 9,224 18,174 9,358 19,859 616 1,427 3,828 1,256 448 1,119 1,980 787 926 800 2,074 2,228 393 753 412 1,765 18,094 374 679 630 435 2,479 555 1,955 647 786 2,685 1,155 3,557 1,312 4,574 574 4,784 228,005 20,812 207,193 27,152 9,770 Totals V F.R.S. custody accounts for foreign oHicial institutions; included in Private Investors. Y Includes $125 million of foreign targeted Treasury note. Oepanmenl 01 the Treasury OHlce 01 Markel Finance January 79, 1996-25 TREASURY MARKETABLE MATURITIES Privately held, Excluding Bills 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 O~====~~~==~~~~~~====~==============r=============~~ 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 o J F M _ A M Secuntles Issued pnor to 1994 ~ New issues calendar year 1994 Department of the Treasury Office of Market Finance J o o J A New Issues calendar year 1995 Issued or announced through January 26, 1996 January 29. 1996-26 TREASURY MARKETABLE MATURITIES $~~ r-=-:;;;-;:--_-r-_ _ _~-===_---TP-riv-a-t.:..el.:...y-h.:..:e..:.;:.;ld, 1998 26 5 26 24 22 20 1S 16 14 12 10 S 6 11 9 11 2S 7 124 116 11 2 Excluding Bills $B il 2101al6f4t21otal6t4t2toat64, 2'0 tt- 27 6 10 30 2S 26 24 22 20 1S 16 14 12 10 2002 21 7 I 107 J ~ 2003 I- 24 • 275 , ~ 238 i- - L- I l- I- a lfl- 6 I- IlI- 4 2 0 24 22 20 1a 16 14 12 10 a 6 4 2 0 IlIlII- 2001 --- .. J I F 135 131 M A I 2 6 f- F 164 157 124 I- ft- r-r-It- 1 M Department of the Treasury Office 01 Market Fmance 2004 lf- 2441 I- 120120 I 30 J J •A 1 S 0 N _ Secuntles Issued prior to 1994 b3J New Issues calendar year 1994 D F J o o M A M J A SON J D New Issues calendar year 1995 Issued or announced through January 26, 1996 January 29. 1996·27 TREASURY MARKETABLE MATURITIES Privately held, § I I l $Ji $Bi :l~ !j jl. gE Ex_C.:..:lu.....:d.....:in--'g~B_ill_sr-_ _ _ _ _ _ _ _ _r--_ _ _ _..... I 2r j WI I ""12T 2006 I .27 rI 2014 ,i.i I II I I II I ""I II II 2019 t- '--- - r- 1a a 1a 7 '- itl- Il- I- I• Securities Issued pnor to 1994 EIJ New Issues calendar year 1994 o o J F M A M J J A SON New issues calendar year 1995 Issued or announced through January 26, 1996 D TREASURY MARKETABLE MATURITIES Privately held, Excluding Bills $BII..--------,--------------------,----------n$B lit--24 22 20 18 16 14 12 10 8 6 4 2 0 2020 36 2021 207 22 20 '" 16 14 12 10 " t--t--t--t--t--t--t--t--t--t--- 2023 219 174 r-- 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 26 24 22 20 18 16 14 12 10 8 6 :!~ 32.0 2024 I 0 110 I ~1 II ITi II I 2025 "" 115 107 110 1! ~ I 0 2022 ttt16 t14 t12 t10 tt6 tt- 22 20 I 2026 '" 100 " t--- J F M A M J _ J A SON 0 Securities issued pnor to 1994 IkZJ New Issues calendar year 1994 o o J F M A M J J A SON 0 New Issues calendar year 1995 Issued or announced through January 26, 1996 Department 01 the Treasury Office 01 Marl<et F,nance January 29,1996-29 SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED IN FEBRUARY 1996.Y Monday Tuesday Wednesday 7 5 6 12 13 14 19 20 21 Auction 3 year;)! Holiday 26 27 Auction 2 year~ Auction 10 year;V Announce 2 year 5 year 28 Auction 5 year'!! Friday Thursday 1 8 Auction 52 week Y Auction 30 year;V 2 9 15 16 22 23 Announce 52 week 29 Auction 52 week~ Y Does not Include weekly bills 51 For settlement February 8 ;V For settlement February 15 settlement February 29 9/ For settlement March 7 ~For Department 01 the Treasury OffIce 01 Market Finance January 31,1996-30 SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED IN MARCH 1995J/ Monday Tuesday Wednesday Thursday Friday 1 4 5 6 7 8 11 12 13 14 15 18 19 20 Announce 2 year 5 year 21 22 27 28 25 26 Announce 52 week Auction 5 year.?! and 52 week]! Auction 2 year3t 29 j/ Does not include weekly bills 1 ~ For settlement April 4 .?! For settlement April Departmel'\t ot the T leasury Office 01 Market Finance Januey 31,199&-31 SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED IN APRIL 1996J/ Monday Tuesday Wednesday Thursday Friday 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19 22 Announce 52 week 25 24 23 Auction 5 year.?! Auction 2 year3t 29 Announce 2 year 5 year 26 Auction 52 week]! 30 j/ Does not Include weekly bills .?! For settlement April 30 ~ Oepartment of the Treasury OffICe 01 Man<:el Finance For settlement May 2 JanusI)' 31. 1996-32 PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE January 30, 1996 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECTED BY FWODS IN -OHIO AND VIRGINIA The Bureau of Public Debt took action to assist victims of floods that struck Ohio and Virginia by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of Ohio and Virginia affected by the floods. These procedures will remain in effect through February 29, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area Most financial institutions serve as paying agents for savings bonds. Included in the initial declaration in Ohio are the counties of Belmont, Columbiana, Jefferson, Meigs, Monroe, and Washington; and included in Virginia they are Alleghany, Bath, Botetourt, Shenandoah, and Warren. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect for those areas. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-I048, available at most financial institutions or the Federal Reserve Bank. Bond owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number, approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-21 0 (RR-838) DEPARTMENT OF THE lREASURY ~~Itrm '$-~!J ~~'\- . TREASURY NEW S ~/78f9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ................................ OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622-2960 For Immediate Release T ext as Prepared for De Ii very January 30. 1996 REMARKS TO THE TREASURY BORROWING ADVISORY COMMITTEE OF THE PUBLIC SECURITIES ASSOCIATION BY ASSISTANT SECRETARY OF THE TREASURY FOR ECONOMIC POLICY JOSHUA GOTBAUM It is a pleasure to be able to meet with you this morning. These are early days for me at Treasury but I am well-aware of the high regard in which you are held by Secretary Rubin and the rest of the Treasury team. We value your opinions and benefit from the perspectives that you can provide on financial market developments. Although the U.S. economy still faces challenges. macroeconomic fundamentals have improved significantly. Inflation is at its lowest levels in a generation; business investment in equipment is very strong; and the economy has created 7.8 million jobs since January 1993. On the budget side. since the passage of the President's 1993 economic plan. the deficit as a share of GDP has been cut in half. Although there are important differences between the Administration and Congress over how best to continue this progress. all the players agree on the importance of continued fiscal discipline and on its benefit to our economy. Let me return to the on-going economic expansion. The economy will soon complete its fifth year of growth. From a relatively slow start. the expansion developed momentum following the passage of deficit-reduction legislation and an ensuing decline in interest rates. As growth became self-reinforcing. propelled both by consumer spending and strong business investment. the economy pushed closer to a zone of relatively full utilization of resources. Gro\V1h has continued. though moderated. and the economy gives no sign of shifting onto an inflationary path. A key question in the past couple of years has been how much and how fast the economy can grow without generating inflationary pressures. Early in the expansion. many argued that the natural rate of unemployment was 6 to 6 1/2 percent. With the unemployment rate no\\ running closer to 5 1/2 percent for more than a year and inflationary pressures still largely absent. many observers have raised questions about the economy's current "speed limit". RR-839 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 Wherever the precise houndaries are set. ho\\ewr. it is clear that the economy has moved closer to full use of its res()urces: as a rL'sult. SUIl1L' moderation in the pace of growth is both expected and prohahly appropriate. Otherwise. past experience suggests that intlationary pressures would eventually emerge and could prejudice continuation of the expansion itself. Our view of the economic scene has been clouded by recent events - or should I say "snow blinded". As a result of disputes in the budget negotiations. the Federal government has been shut down twice. This led to a disruption of the flow of statistical information. which is only now coming back on stream. Furthermore. the recent blizzard imposed both direct economic and psychological effects in the East. Without the usual statistics and with many consumers shut in or shoveling out. anxiety over economic prospects is bound to rise a little. However, those who have followed the economy through episodes of severe weather on previous occasions will recall that many sales typically are postponed. not lost forever. Some bounce back is to be expected. It is also inevitable that. as the economy shifts to a lower rate of growth and approaches the zone of full resource use. economic signals would be mixed. Some statistics suggest a slower pace of activity. some do not. Some regions forge ahead rapidly. others grow more slov"ly. When the signals are mixed. as they are now and may be for a time in the future. there is always room for doubt. We are still "digging out"". and do not yet have the full statistical picture. Nonetheless. the weight of evidence suggests to us that the economy is still on a path of low intlation and moderate economic grO\vth. • It appears. to us and others. that growth slowed down in the fourth quarter of last year from a 3 percent pace in the third. Data are still incomplete so there is a lot of guess work in any fourth-quarter estimate. For example, employment and workhours point to a stronger gro\\-1h rate than the consumer spending side of the equation. How the quarter as a whole fits together remains to be seen. • In the manufacturing sector. the record for the fourth quarter is fairly complete. Growth of output in that cyclically-sensitive part of the economy slowed from a 2.6% annual rate in the third quarter to 1.7% in the fourth. partly (it appears) as a result of continued inventory overhang. However. the manufacturing sector did continue to \!,row. This - coupled \vith the likelihood of continued gains in output of services ;uggest a moderate rise in GOP o\'erall. • The intlation picture remains very encouraging, Consumer prices in November \vere nat. their best performance in . E2 years, Consumer prices seem certain to have finished 19~)5 with an increase of less than .3 percent for a fourth straight year - an experience we ha\"e Ilnt enjnyed since the mid-Jl)60' s, 2 • Nonetneless. intlation measures are \ ()Lltile and it is important not to make ton much of a single month's performance. \\hether encouraging or otherwise. Special factors can always exert a he~l\y impact on monthly readings. particularly in the case of the producer price index. I t is also \\orth recalling. as we enter the new year. the tendency in recent years to get some fairly high monthly inflation readings early in the year which are then washed out aQainst later . ' - lower . .readil1}.!s ... .in .the .year. • The fundamentals underscore the low inflation premise. The economy has slowed. and the industrial capacity utilization rate - less than 83 percent in December - was down more than .2 percentage points from its expansion high of a year ago. Overall, one must conclude that the threat of inflation has abated very substantially. Although some observers have suggested that the economy may have weakened a little more than government shutdmvns and severe \veather can explain, there are many positives in the current picture. Most private economic forecasters expect the pattern of moderate real growth and low inflation to continue through this year and thereafter. We see no reason to disagree. -30- 3 TREASURY OFFICE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960 Text as prepared for delivery January 30, 1996 STA TEMENT OF TREASURY DEPUTY SECRETARY LA WRENCE H. SUMMERS Good afternoon. I appreciate the opportunity to discuss with you a matter that is of extreme importance to our nation's financial health and security: the need for action on a clean bill increasing the debt limit. It is time to end the debt limit impasse and get on with the nation's business. As Secretary Rubin stated in his testimony of December 13, before the Banking Committee, the Department of the Treasury's ability to continue to finance Government operations without an increase in the debt limit is limited. As the Secretary wrote to Congressional leadership on January 22, beyond a handful of measures that Treasury can take in mid-February, there are simply "no legal and prudent options" left that would allow Treasury to continue to meet government obligations beyond March 1 at the latest, and thereby avert serious risks to our nation's economy and financial system. The United States has long been the bedrock of the international financial system and global economy. Never in our history has the United States defaulted or been unable to meet its financial obligations. A long list of private and public sector authorities have warned of the many dangers that our nation will face if we enter this unchartered territory. RR-840 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 First, failure by the U.S. government to pay interest or principle on its debt would have severe consequences for the United States payments system. Treasury securities are viewed as cash equivalents; millions of people and institutions will be left short of liquidity if the United States fails to make required payments. The accumulated effects of such failures as they rebound through our economy could be extremely dangerous. Second, failure by the U.S. government to meet obligations would raise the risk of holding U.S. government securities, thereby raising interest rates that the United States will have to pay to borrow in the future. Higher interest rates would mean higher costs for U.S. taxpayers, making it that much more difficult to accomplish the overriding goal of balancing the United States budget. Moreover, since the vast majority of American, and even international borrowing is priced off of interest rates on U.S. government securities, public and private interest rates generally would rise, both in the United States and abroad. Such higher rates would represent a significant drag on our efforts to sustain economic expansion. Higher interest rates would also make it that much more expensive for working Americans to obtain a mortgage for a new home, or finance purchases with a credit card, or take out a loan for education or investment. Just about all Americans would feel the crunch. Third, a default or failure by the United States to meet its obligations could cause severe international financial difficulties. Investors would lose confidence in United States instruments. Exchange markets could experien'ce bouts of instability and turbulence. Foreign economies could be damaged due to currency and interest rate shocks. The global economy could suffer, harming the exports on which our own economic expansion hinges. Fourth, a failure to raise the debt limit would jeopardize the U.S. governments' ability to meet very basic obligations to working Americans. Millions of Americans rely on government payments in the form of Social Security, or military pay checks, or veterans' benefits. Put simply, if the debt limit is not raised quickly, these ordinary Americans might suffer the consequences. Let me emphasize once again that aside from a limited numher of actions that we can take in mid February, there are no other measures that Treasury can take to extend its ability to fund government operations beyond March I at the latest. Suggested actions such as selling the nation's gold reserves, or delaying tax refunds to American taxpayers, have all been carefully studied. They are all unacceptable. There is therefore no way of avoiding the fact that if a clean debt limit bill is not enacted by March I at the very latest, the United States will join Myanmar, Angola, Argentina, Venezuela, BraziL Vietnam, and Russia on the short-list of nations that have defaulted on debt in their own currency over the past quarter century. This is simply not the way to run the finances of a great nation. In conclusion, I would like on behalf of the Treasury Department to thank the members of Congress -- those who sit on the Banking Committee and others -- who have understood the dangers of default, and have in the best interest of our nation sought to move a clean debt limit bill through the Congress. I urge you to continue in this very important task. I am now happy to respond to your questions. 3 Monthly Treasury Statement of Receipts and Outlays , of the UnHed States Government For Fiscal·Year 1996 Through December 31, 1995, and Other Periods I '-.1 ~ \..j I / Highlight Military active duty pay, veterans benefits, and supplemental security income payments for January 1, 1996, were accelerated to December 29, 1995. This issue includes the semi-annual interest payment to trust funds investing in government securities. RECEIPTS, OUTLAYS, AND SURPLUS/DEFICIT THROUGH DECEMBER 1995 B L L I o N S 400 350 Summary, page 2 300 Receipts, page 6 Contents 250 200 Outlays, page 7 Means of financing, page 20 150 Receipts/outlays by month, page 26 100 50 Federal trust funds/securities, page 28 Receipts by source/outlays by function, page 29 o--I4=---L---"'--50 -1 00 -ld=======::;z:::====:::;========r' Compiled and Published by Department of the Treasury Financial Management Service Explanatory notes, page 30 Introduction of receipts are treated as deductions from gross receipts; revolving and manag&ment fund receIpts. reimbursements and refunds of monies previously expended are treated as deductions from gross outlays; and interest on the public debt (publIC Issues) IS recognized on the accrual basis. Major information sources Include accounting data reported by Federal entities. disbursing officers. and Federal Reserve banks. The Monthly Treasury Statement of Receipts and Outlays of the United States Government (MTS) IS prepared by the FinanCial Management Service. Department of the Treasury, and after approval by the Fiscal Assistant Secretary of the Treasury. is normally released on the 15th workday of the month follOWing the reporting month. The publication IS based on data provided by Federal entllieS. disbursing officers. and Federal Reserve banks Triad of Publications The MTS is part of a triad of Treasury financial reports. The Daily Treasury Statement is published each working day of the Federal Government. It provides data on the cash and debt operations of the Treasury based upon reporting of the Treasury account balances by Federal Reserve banks, The MTS is a report of Government receipts and outlays, based on agency reporting. The US. Govemment Annual Report is the official publication of the detailed receipts and outlays of the Government. It is published annually in accordance with legislative mandates given to the Secretary of the Treasury, Audience The MTS IS published to meet the needs of Those responsible for or interested In the cash positIOn of the Treasury; Those who are responsible for or interested in the Government's budget results; and Individuals and businesses whose operations depend upon or are related to the Government's financial operations. Disclosure Statement ThiS statement summarizes the financial activities of the Federal Government and off-budget Federal entities conducted in accordance with the Budget of the U.S. Government. Ie .. receipts and outlays of funds. the surplus or deficit. and the means 01 financing the deficit or disposing of the surplus. Information is presented on a modilled cash basis: receipts are accounted lor on the basis of collections; refunds Data Sources and Information The Explanatory Notes section of this publication provides information conceming the flow of data into the MTS and sources of information relevant to the MTS, Table 1. Summary of Receipts, Outlays, and the Deficit/Surplus of the U.S. Government, Fiscal Years 1995 and 1996, by Month [$ millions) Period FY 1995 October November December January February March April May June July August September Year-to-Date "_' •••• ,,, _••• , , _••• , . _•• , FY 1996 October November December Year-to-Date • _, , , ... , , _• , , ... , • - , . , , , , . Outlays Receipts Deficit/Surplus (-) 89,024 87,673 130,810 131,801 82,544 92.532 165,392 90,405 147,868 92.749 96,560 143.219 120,365 124,915 135,613 116,166 120,899 143,074 115.673 129,958 135,054 106,328 130,411 135.972 31,342 37.242 4.803 -15,635 38.355 50,543 -49.720 39.553 -12,814 13,579 33,851 -7,247 1,350,576 1,514,428 163,852 95,593 90,008 138,271 118.352 128,458 132,984 22.758 38.450 -5.286 323,872 379,794 55,922 2 Table 2. Summary of Budget and Off-Budget Results and Financing of the U.S. Government, December 1995 and Other Periods [$ millions] Prior Fiscal Year to Date (1995) Budget Estimates Full Fiscal Year 1 Current Fiscal Year to Date This Month Classification Budget Estimates Next Fiscal Year (1997) 1 Total on-budget and off-budget results: Total receipts ........................................... 138,271 323,872 1,414,641 307,507 1,473,929 On-budget receipts ................................... Off-budget receipts .................................. 110,322 27,949 246,173 77,698 1,046,796 367,845 231,327 76,179 1,088,626 385,303 1,000 2,000 Total outlays ............................................ 132,984 379,794 1,578,481 380,894 1,654,983 On-budget outlays ................................... .............................. Off-budget outlays 121,753 11,231 315,671 64,123 1,273,064 305,417 319,086 61,808 1,337,953 317,030 ........................ +5,286 -55,922 -162,840 -73,387 -179,054 .. ............. .. ............. -11,431 +16,717 -69,497 +13,575 -225,268 +62,428 -87,759 +14,372 -247,327 +68,273 ............. -5,286 55,922 162,840 73,387 179,054 Means of financing: Borrowing from the public ........................... Reduction of operating cash, increase (-) ......... By other means ...................................... -18,358 5,611 7,461 33,335 17,454 5,133 195,312 -10,000 -22,472 59,669 9,362 4,356 213,415 Reduction in corporate subsidies Total surplus (+) or deficit (-) ...................... On-budget surplus (+) or deficit (-) Off-budget surplus (+) or deficit (-) Total on-budget and off-budget financing ... No Transactions. Note: Details may not add to totals due to rounding. 'These figures are based on the Mid-Session Review of the FY 1996 Budget. released by the Office of Management and Budget on July 31. 1995. Figure 1. Monthly Receipts, Outlays, and Budget Deficit/Surplus of the U.S. Government, Fiscal Years 1994 and 1995 $ billions 180,-------------------------------------------------~ 160 140 120 100 80 60 40 20 Outlays \. ..................... ,:" .................. O~~~~~~~~~~~~~~~~~~~~~~~~ , __~ -20 -40 -60 Deficit(-)/Surplus -80-ri----r----rI----r----r'----r----r,----r----r,----r----r,----r----r'----r----,II Oct. Dec. Feb. Apr. Jun. Aug. Oct. FY FY 95 96 3 Dec. -34,361 Figure 2. Monthly Receipts 01 the U.S. Government, by Source, Fiscal Years 1995 and 1996 $ billions 20 o-~~~--~~~~~~~~J-.--r~--'-~ Oct. Dec. Feb. Apr Jun. Dec. Aug. FY 96 FY 95 Figure 3. Monthly Outlays of the U.S. Government, by Function, Fiscal Years 1995 and 1996 $ billions 180~------------------------------------------------~ 160 Total Outlays 1 Social Security & Medicare Dec. Feb. Apr. Jun. FY 95 Aug. Oct. FY 96 4 Dec. Table 3. Summary of Receipts and Outlays of the U.S. Government, December 1995 and Other Periods [$ millions] This Month Current Fiscal Year to Date 53.179 38.021 144,542 41,895 134,809 36,468 619,975 164,193 27,949 9,175 223 416 4,870 1,383 1,439 1,618 77,698 24,893 4,377 1,097 14,477 3,891 4,817 6,183 76,179 24,578 4,552 1,122 14,497 3,513 5,421 6,366 367,845 105,894 28,390 4,451 57,456 16,225 20,999 29,213 Total Receipts ................................................ . 138,271 323,872 307,507 1,414,641 (On-budget) ............................................•..••• 110,322 246,173 231,327 1,046,796 (Off-budget) ................................................ . 27,949 77,698 76,179 367,845 Classification Comparable Prior Period Budget Estimates FuJI Fiscal Year' Budget Receipts Individual income taxes Corporation income taxes Social insurance taxes and contributions: Employment taxes and contributions (off-budget) Employment taxes and contributions (on-budget) Unemployment insurance .... Other retirement contributions Excise taxes Estate and gift taxes Customs duties Miscellaneous receipts .. Reduction in corporate subsidies ..................... . 1,000 Budget Outlays Legislative Branch The Judiciary Executive Office of the President Funds Appropriated to the President Department of Agriculture ............................... . Department of Commerce ........................ . Department of Defense-Military ................. . Department of Defense-Civil Department of Education ....................... . Department of Energy ......................... . ............. . Department of Health and Human Services Department of Housing and Urban Development .............. . Department of the Interior ..................... . Department of Justice .................. . Department of Labor ................. . ............ . Department of State Department of Transportation .......... . Department of the Treasury: Interest on the Public Debt .. Other ............ .. Department of Veterans Affairs .............. . Environmental Protection Agency ...................... . General Services Administration ............................... .. National Aeronautics and Space Administration ............. . Office of Personnel Management .......................... . Small Business Administration ............. . Social Security Administration .......................... . Other independent agencies: Resolution Trust Corporation Other .......... . Allowances .................. .. Undistributed offsetting receipts: Interest ............ . Other .................. . 158 226 14 194 4,240 250 23,988 2,593 1,891 1,498 25,767 2,701 500 837 2,431 439 3,121 506 619 42 2,118 16.590 884 61,520 7,960 6.283 4,376 77,013 6,138 1,619 2,630 7,768 1,311 9,558 903 656 61 5,463 19,938 909 64,966 7,848 8,159 4,756 72,648 7,723 2,021 2,475 6,507 1,993 9,999 2,952 3,339 188 10,681 56,348 4.051 249,543 31.934 30,324 15,580 324,928 21,388 7,264 13,760 33,809 5,539 37,457 60,676 1,146 4,416 435 477 973 3,576 76 32,777 108,313 62 9,297 1,458 1,205 3,220 10,570 331 91.133 101,964 1,062 9,265 1,450 451 3,190 9,988 274 86,996 349,259 21,812 37,707 6,507 494 13,681 42,992 310 380,481 -638 1,368 -2,423 4,320 -3,974 5,599 -1,214 14,118 -550 -40,465 -2,683 -46,616 -8,013 -44,555 -7,842 -95,851 -40,348 Total outlays .................................................. . 132,984 379,794 380,894 1,578,481 (On-budget) ................................................ .. 121,753 315,671 319,086 1,273,064 (Off-budget) ............................................... .. 11,231 64,123 61,808 305,417 Surplus (+) or deficit (-) .................................. .. +5,286 -55,922 -73,387 -162,840 (On-budget) ................................................. . -11,431 -69,497 -87,759 -225,268 (Off-budget) ................................................ . +16,717 +13,575 +14,372 +62,428 'These figures are based on the Mid-Session Review of the FY 1996 Budget, released by the Office of Management and Budget on July 31, 1995. Note: Details may not add to totals due to rounding. 5 Table 4, Receipts of the U,S, Government, December 1995 and Other Periods [$ millions] Classification IndiVidual income taxes: Withheld Presldenllal Election Campaign Fund Other Gross Receipts 1 Current Fiscal Year to Date This Month I (Deduct) Refunds I Receipts Gross Receipts Refunds (Deduct) I Receipts (' ') 3.227 Gross Receipts I (Deduct) Refunds I Receipts 129.042 2 9,410 137,460 1 11.118 50.597 Prior Fiscal Year to Date ......................... 53,824 646 53,179 148,580 4,037 144,542 138,454 3,645 134,809 Corporation income taxes .................................... 38,954 932 38,021 46,823 4,928 41,895 40,811 4,343 36,468 23.500 212 -1 66,434 178 -1 643 65.791 178 -1 50.962 -110 2 Total-Individual income taxes Social insurance taxes and contributions: Employment taxes and contributions: Federal old-age and survivors Ins. trust fund: Federal Insurance Contributions Act taxes Self-Employment Contributions Act taxes Deposits by States Other Total-FOASI trust fund Federal disability Insurance trust fund: Federal Insurance Contributions Act taxes Self-Employment Contributions Act taxes Receipts from railroad retirement account DepoSits by States Other Total-FDI trust fund Federal hospital insurance trust fund: Federal Insurance Contributions Act taxes Self-Employment Contributions Act taxes Receipts from Railroad Retirement Board Deposits by States Total-FHI trust fund Railroad retirement accounts: Rail industry pension fund Railroad Social Security equivalent benefit Total-Employment taxes and contributions Unemployment insurance: State taxes deposited in Treasury Federal Unemployment Tax Act taxes Railroad unemployment taxes Railroad debt repayment Total-Unemployment insurance 23.500 212 -1 ..) ( 50.962 -110 2 (' ') (' ') (" ') (' ') (") 23.711 23.711 66.611 643 65.968 50.854 50.854 4.200 38 4.200 38 11.802 48 119 11.682 48 24.841 484 24.841 484 (' ") (' ') 4.238 4.238 11.850 119 11.730 25.325 25,325 8.837 83 8,837 83 23,914 100 -13 23,927 100 23,564 90 23,564 90 (' ') ("") 8,920 8.920 24.015 -13 24.028 23,654 23,654 152 138 36 116 138 456 446 37 420 446 467 464 7 460 464 37.160 36 37.123 103.377 786 102,591 100.764 7 100,758 185 43 5 185 38 3,597 781 6 8 3.597 774 6 3,790 768 6 11 ) 3,790 757 6 223 4,384 8 4.377 4,564 11 4,552 ( ("") 228 5 .. Other retirement contributions: Federal employees retirement - employee contributions Contributions for non-federal employees 411 5 411 5 1,079 19 1,079 19 1,098 24 1,098 24 Total-Other retirement contributions 416 416 1,097 1,097 1,122 1,122 Total-Social insurance taxes and contributions ........................................ 37,803 41 37,762 108,859 794 108,065 106,451 18 106,432 2.613 447 1.802 52 -58 6 96 2.672 441 1,706 52 8.015 1,363 5,287 155 240 6 97 7,775 1,357 5,190 155 7,281 1,376 5,993 169 316 6 1 6,965 1,371 5,992 169 ..................................... 4,914 44 4,870 14,820 343 14,477 14,820 323 14,497 Estate and gift taxes .............................. , .......... 1,411 29 1,383 3,992 101 3,891 3,616 103 3,513 ............................................... 1,532 94 1,439 5,124 306 4,817 5,761 340 5,421 .. 1.388 230 5.261 925 3 5,261 922 5,377 995 6 5,377 989 Excise taxes: Miscellaneous excise taxes' Airport and airway trust fund Highway trust fund Black lung disability trust fund Total-Excise taxes Customs duties Miscellaneous Receipts: DepoSits of eamlngs by Federal Reserve banks All other Total - 1.388 230 ( Miscellaneous receipts ........................ 1,618 (0 0) 1,618 6,186 3 6,183 6,372 6 6,366 ........................................ 140,056 1,785 138,271 334,384 10,512 323,872 316,285 8,779 307,507 1,785 110,322 255,923 9,750 246,173 240,106 8,779 231,327 27,949 78,461 763 77,698 76,179 Total Receipts Total On-budget ...................................... 112,108 Total - Off-budget ...................................... 27,949 'Includes amounts for tne windfall prohts tax pursuant to P L 96-223 No Transactions ) (' ') Less than $500.000 Note Details may not add to totals due to rounding 6 76,179 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods [$ millions] This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross !APPlicablel Outlays Outlays Receipts Gross !APPlicable I 0 II Outlays Receipts u ays Gross IAPPlicable lOti Outlays Receipts u ays Classification Legislative Branch: Senate. House of Representatives Joint items Congressional Budget Office Architect of the Capitol Library of Congress Government Printing Office Revolving fund (net) General fund appropriations General Accounting Office United States Tax Court ................... . Other Legislative Branch agencies .................... . Proprietary receipts from the public ........................ . Intrabudgetary transactions .......... . Total-Legislative Branch ............................... . The Judiciary: Supreme Court of the United States ............ . Courts of Appeals, District Courts, and other judicial services Other 39 66 6 6 2 13 21 2 12 21 -50 6 52 -50 6 52 2 2 2 2 Total-Agency for International Development ... Overseas Private Investment Corporation Peace Corps Other Total-International Development Assistance International Monetary Programs Military Sales Programs: Special defense acquisition fund Foreign military sales trust fund Kuwait civil reconstruction trust fund Proprietary receipts from the public Other Total-Funds Appropriated to the President ......... .. -24 19 78 35 22 93 35 22 93 8 7 8 7 8 8 9 103 176 20 5 2 2 105 192 19 5 54 -2 2 9 6 -6 -4 9 903 -1 -4 506 912 7 7 7 7 6 589 24 588 24 629 22 628 22 226 621 619 658 656 3 3 4 7 4 7 8 12 22 14 14 42 8 12 22 42 8 14 39 61 14 39 61 -6 83 171 2 87 659 493 12 1 659 493 12 192 2,062 1,670 13 2 -11 7 7 6 11 47 239 1,259 oJ 314 10 212 314 10 212 oJ r oJ 535 160 22 160 22 41 52 35 -1 510 3 3 217 218 (0 oJ 6 (* *) 36 4 86 49 136 -49 1,123 3,943 8 91 102 2,062 1,670 13 16 -16 3,837 6 106 246 173 201 535 246 173 201 621 621 424 65 424 65 405 80 405 80 41 52 35 123 155 110 123 155 110 173 188 130 173 188 130 74 87 12 -87 9 185 65 -185 326 91 235 951 194 757 7 20 -14 13 6 6 21 46 22 84 13 -63 46 22 57 19 240 1,575 278 1,297 1,788 198 63 -28 3,851 56 3,384 rOJ (0 Agency for International Development: Sustainable development assistance program Assistance for eastern europe and the baltic States .. Assistance for the new independent States of the .......... . former soviet union Development fund for Africa ............... . Operating expenses Payment to the Foreign Service retirement and .......... . disability fund Other. Proprietary receipts from the public Intrabudgetary transactions -24 19 78 1 286 Total-Multilateral Assistance 372 158 30 83 171 2 2 Total-International Security Assistance oJ 38 78 104 192 19 5 52 372 159 Total-Executive Office of the President International Development Assistance: Multilateral Assistance: Contribution to the International Development ........... . Association International organizations and programs Other rO) (0 Executive Office 01 the President: Compensation of the President and the White House Office Office of Management and Budget ............. . Other ....................................... . Funds Appropriated to the President: International Security Assistance: Foreign military loan program ............ . Foreign military financing program Economic support fund .................. . Peacekeeping Operations Other Proprietary receipts from the public 39 66 103 176 20 5 40 78 227 Total-The Judiciary (0 0) (0 4 16 351 111 198 3 17 1,428 (0 oJ rOJ 1,706 1,880 7 20 3,851 r oJ -1,706 6 6 2,074 -14 1,428 194 48 (0 4,329 6 6,909 4,791 oJ 45 59 10 176 45 49 -176 1,080 186 895 11 65 -54 57 19 251 1,537 63 70 -13 3,384 3,350 -3,350 5 3,777 5,463 rOJ -4,329 6 5 2,118 9,240 (<0) Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] Classification This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross jAPPlicable j Outlays Outlays Receipts Gross jAPPlicablel 0 tl Outlays Receipts u ays Gross IAPPlicablel Receipts Outlays Outlays Department of Agriculture: Agricultural Research Service Cooperative State Research Education and Extension Service Cooperative state research activities Extension Service Other Animal and Plant Health Inspection Service Food Safety and Inspection Service Agricultural Markeling Service Farm Service Agency Salaries and expenses Conservation programs Federal crop Insurance corporation fund Commodity Credit Corporation Price support and related programs National Wool Act Program Agricultural credit Insurance fund Other Total-Farm Service Agency Natural Resources Conservation Service: Conservation operations Watershed and flood prevention operations Other Rural Utilities Service: Rural electrification and telephone fund Rural development insurance fund Other Rural housing and Community Development Service: Rural housing insurance fund Other Foreign Agricultural Service Food and Consumer Service: Food stamp program State child nutrition programs Women, infants and children programs Other Total-Food and Consumer Service Forest Service: National forest system Forest and rangeland protection Forest service permanent appropriations Other Total-Forest Service Department Economic Bureau of Promotion 57 181 181 179 179 31 25 1 35 38 90 31 25 1 35 38 90 97 93 6 110 124 292 97 93 6 110 124 292 112 104 9 125 115 302 112 104 9 125 115 302 218 99 255 174 218 99 81 239 1.753 694 334 239 1,753 360 239 1,773 215 239 1,773 -226 1,072 707 365 4.716 1,546 3,171 1,265 ..10) 124 -114 30 303 -273 7,572 2 179 401 6,307 2 -222 1,655 1,006 650 7,434 2,183 5,251 9,980 2,107 7,873 49 19 9 141 63 30 141 63 30 126 81 24 ( ) -207 -38 75 491 177 200 997 146 65 -506 32 135 266 184 100 536 140 55 -270 44 45 48 83 -13 210 -161 83 -13 481 252 105 623 -143 252 105 649 279 304 674 -26 279 304 2,137 858 291 6 2,137 858 291 6 6,374 2,122 945 82 6,374 2,122 945 82 6,528 1,912 900 161 6,528 1,912 900 161 3,292 3,292 9,524 9.524 9,500 9,500 108 23 89 68 108 23 89 68 355 103 312 221 355 103 312 221 329 275 341 205 329 275 341 205 288 288 992 992 1,149 1,149 42 -78 -45 93 122 -45 84 -227 -45 4,240 20,840 4,250 16,590 23,710 3,772 19,938 27 31 25 113 77 69 2 111 77 69 81 107 92 4 77 107 92 464 136 39 3 518 96 36 7 7 461 136 32 8 511 96 28 10 628 650 16 635 31 -32 28 32 4 78 5,870 1,630 28 31 25 125 40 7 2 2 123 40 4 Total-SCience and Technology 171 4 167 638 Other Proprietary receipts from the publiC Intrabudgetary transactions Offsetting governmental receipts 12 ..) 12 -10 31 10 266 16 Total-Department 01 Commerce ( ....................... 126 81 24 243 68 21 01 Commerce: Development Administration the Census of Industry and Commerce Science and Technology: National Oceanic and Atmospheric Administration National Institute of Standards and Technology Other 441 37 29 96 -45 ....................... .. ( 49 19 9 46 Other Proprietary receipts from the public Intrabudgetary transactions Total-Department 01 Agriculture 57 .. ( 8 ) 250 .. ( 9 227 ) 929 45 ..) ..) 9 251 .. .. ( ) 30 ( 884 958 .. ( ) ( ( 113 -251 28 -30 ( ) 50 ..) 909 Table 5" Outlays of the U"S" Government, December 1995 and Other Periods-Continued [$ millions] Classification Department of Defense-Military: Military personnel: Department of the Army ...... Department of the Navy Department of the Air Force ................... This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross IAPPlicable] Outlays Receipts Outlays Gross IAPPlicable I Receipts Outlays Outlays Gross IAPPlicable lOti Outlays Receipts u ays 3,005 2,664 2,339 3,005 2,664 2,339 6,180 6,040 4,748 6,180 6,040 4,748 6,158 6,599 4,951 6,158 6,599 4,951 8,009 8,009 16,968 16,968 17,707 17,707 1,583 2,064 2,027 1,590 1,583 2,064 2,027 1,590 4,908 4,775 '5,664 4,596 4,908 4,775 5,664 4,596 5,368 5,503 6,217 4,691 5,368 5,503 6,217 4,691 7,265 7,265 19,943 19,943 21,780 21,780 638 1,728 1,229 329 638 1,728 1,229 329 1,668 4,796 '3,427 899 1,668 4,796 3,427 899 1,813 5,899 5,032 1,089 1,813 5,899 5,032 1,089 3,924 3,924 10,791 10,791 13,833 13,833 Research, development, test, and evaluation: Department of the Army .............. Department of the Navy ............. Department of the Air Force ........... Defense agencies ............. .................... 422 727 1,040 716 422 727 1,040 716 1,234 2,021 2,964 2,020 1,234 2,021 2,964 2,020 1,213 2,029 3,435 1,969 1,213 2,029 3,435 1,969 Total-Research, development, test and evaluation 2,905 2,905 8,239 8,239 8,646 8,646 106 42 107 379 106 42 107 379 269 172 330 1,010 269 172 330 1,010 186 157 352 702 186 157 352 702 635 635 1,781 1,781 1,398 1,398 98 87 107 11 98 87 107 5 290 325 255 35 290 325 255 20 265 231 267 41 265 231 267 31 11 31 84 219 84 219 -17 49 661 r"J '2,334 -33 2,334 -34 744 3 r 'J ("'J (" "J r "J (" "J 2 1 -75 2 15 2 -37 7 9 3 6 ("") (" ") (" ") (" ") -37 52 ........... .................. .................. Total-Military personnel Operation and maintenance: Department of the Army Department of the Navy Department of the Air Force Defense agencies ............... ........... ............. ............ Total-Operation and maintenance ... ................ Procurement: Department of the Army Department of the Navy Department of the Air Force Defense agencies Total-Procurement .............. ................... ........... Military construction: Department of the Army Department of the Navy Department of the Air Force Defense agencies ............................ ......................... ................. Total-Military construction Family housing: Department of the Army ............... ................... Department of the Navy ............ Department of the Air Force ........... Defense agencies ............ ............ Revolving and management funds: ............ Department of the Army ... Department of the Navy .. ............. ................... Department of the Air Force Defense agencies: Defense business operations fund ..................... Other ........ ....................... Trust funds: .................... Department of the Army .................... Department of the Navy Department of the Air Force ......................... ...................... Defense agencies Proprietary receipts from the public: Department of the Army ........... Department of the Navy ........... Department of the Air Force ............. ................ ............ Defense agencies Intrabudgetary transactions: Department of the Army .... Department of the Navy .... Department of the Air Force ............. Defense agencies Offsetting governmental receipts: .................. Department of the Army ................... Defense agencies Total-Department of Defense-Military ............. 7 11 31 661 ("J ("J ("J -75 14 20 26 36 -14 -20 -26 -36 17 58 -6 354 17 58 -6 354 2 24,093 ("') 105 9 2 8 2 186 43 '262 -1 22 678 128 (' ") (" ") 62,039 2 -2 ("') (" ") 519 61,520 10 -17 49 2 52 102 416 99 -25 65,599 744 1 (" ") 216 96 198 109 -186 -43 -262 22 678 '128 -2 23,988 15 -216 -96 -198 -109 102 416 99 -25 (" ") (" ") 633 64,966 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] This Month Classification Gross Outlays Department of Defense-Civil Corps of Engineers Construction. general Operation and maintenance. general Other Propnetary receipts from the public IApplicable j Receipts 331 MIlitary retirement: Payment to military retirement fund Military retirement fund Intrabudgetary transactions Education benefits Other Propnetary receipts from the public Total-Department of Defense-Civil ................... Gross jAPPlicablej Outlays Receipts Outlays 11 11 320 1,005 2,257 306 438 371 37 295 402 308 37 37 967 1.114 11,470 6,747 11,470 6 17 4 10,699 6,989 -10.699 -10 17 -4 42 7,960 7.885 10,699 6,989 -10,699 -10 18 1 11 7 -1 13 2,593 8,002 r·) 2,606 Gross jAPPlic.ablej Outla s Receipts y Outlays 295 402 308 2,257 11 7 Prior Fiscal Year to Date 121 131 80 -11 121 131 80 Total-Corps of Engineers Outlays Current Fiscal Year to Date 32 306 438 371 32 32 1.082 4 11,470 6,747 11,470 6 16 4 37 7,848 Department of Education: Office of Elementary and Secondary Education: Education for the disadvantaged Impact aid ................. School improvement programs Other 476 14 82 14 476 14 82 14 1,699 73 273 60 1,699 73 273 60 1,566 555 384 25 1,566 555 384 25 Total-Office of Elementary and Secondary Education 586 586 2,104 2,104 2,531 2,531 6 6 27 27 50 50 237 167 10 118 237 167 10 118 698 548 22 395 698 548 22 395 889 471 32 446 889 471 32 446 22 -22 1,593 161 38 189 340 -1 6 1,841 195 48 39 1,440 -2 27 -22 1,841 195 48 39 1,440 -2 22 2,299 3,567 27 3,540 109 105 3 82 110 -3 13 109 105 -13 24 6,283 8,199 40 8,159 Office of Bilingual Education and Minority Languages Affairs Office of Special Education and Rehabilitative Services: Special education Rehabilitation services and disability research ... Special institutions for persons with disabilities Office of Vocational and Adult Education Office of Postsecondary Education: College housing loans '" Student financial aSSistance Higher education Howard University Federal direct student loan program Federal family education loans Other Total-Office of Postsecondary Education Office of Educational Research and Improvement Departmental management Proprietary receipts from the public Total-Department of Education ........................ Department of Energy: AtomiC energy defense activities Energy programs: General sCience and research activities Energy supply, Rand D activities Uranium supply and enrichment activities Fossil energy research and development Energy conservation Strategic petroleum reserve Clean coal technology Nuclear waste disposal fund Other Power Marketing Administration Departmental administration Propnetary receipts from the public Intrabudgetary transactIOns Offsetting govemmental receipts ............................ -5 377 38 17 17 10 278 10 278 ( ( ..) 1,593 161 38 189 340 -1 714 2,321 25 29 -1 82 110 1,891 6,307 1,344 1,344 3,332 3,332 3,171 3,171 92 307 9 51 58 27 92 307 9 51 58 27 279 889 28 131 159 57 279 889 28 131 159 57 508 843 26 113 130 59 508 843 26 113 130 59 21 53 65 197 ..) 65 197 80 277 (00) 80 277 619 1,806 (0.) 1,806 2.038 (OO) 2,037 -77 30 -90 -327 369 89 397 -28 89 -440 -381 482 115 487 5 -4 115 -418 -140 -5 911 4,756 ..) 719 5 25 29 1,896 21 53 619 Total-Energy programs Total-Department of Energy 5 377 38 92 30 5 r .) ..) ( 169 90 -327 ..) ( 1,758 260 10 .. ( 440 -381 ) 1,498 ( 5,214 (OO) (OO) 838 4,376 418 140 5,666 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] Classification Department of Health and Human Services: Public Health Service: Food and Drug Administration Health Resources and Services Administration Indian Health Services ... Centers for Disease Control and Prevention .. . . . . . . . . . . . National Institutes of Health ..... . . . . . . . . . . . . Substance Abuse and Mental Health Services Administration Agency for Health Care Policy and Research .. Assistant secretary for health Federal hospital insurance trust fund: Benefit payments .... ................. Administrative expenses . Interest on normalized tax transfers ............. ................ ........... Total-FHI trust fund ... Federal supplementary medical insurance trust fund: Benefit payments .......... Administrative expenses .. Total-FSMI trust fund Current Fiscal Year to Date Prior Fiscal Year to Date Gross IAPPlicablel Outlays Outlays Receipts Gross IAPPlicablel Outlays Receipts Outlays Gross .!APPlicable/ 0 tl Outlays Receipts u ays 66 162 152 126 751 ........... Other ............. Total-Health Care Financing Administration ..... Administration for children and families: Family support payments to States .. Low income home energy assistance ............ Refugee and entrant assistance Payments to States for the job opportunities and basic skills training program ... State legalization impact assistance grants Payments to States for the child care and development block grant SOCial services block grant . Children and families services programs Payments to States for foster care and adoption assistance .... .............. . ............. Other ............. .............. Total-Administration for children and families Administration on aging Departmental management Proprietary receipts from the public ... Intrabudgetary transactions: Payments for health insurance for the aged: Federal hospital insurance trust fund Federal supplementary medical insurance trust fund Payments for tax and other credits: Federal hospital insurance trust fund Other .............. Total-Department of Health and Human Services .. ( ) 66 162 152 126 751 197 541 473 446 2,663 196 541 473 446 2,663 205 603 481 455 2,510 204 603 481 455 2,510 159 11 51 549 32 175 549 32 175 586 25 88 586 25 88 1,478 5,077 5,076 4,953 4,951 6,702 3,448 6,702 3,448 22,024 11,160 22,024 11,160 21,488 9,152 21,488 9,152 10,274 28 10,274 28 29,016 237 29,016 237 26,232 301 26,232 301 10,302 10,302 29,254 29,254 26,533 26,533 6,013 19 6,013 19 17,010 302 17,010 302 15,530 396 15,530 396 6,032 6,032 17,312 17,312 15,926 15,926 130 130 144 144 10 10 26,614 26,614 79,893 79,893 73,108 73,108 1,235 93 27 1,235 93 27 4,492 215 75 4,492 215 75 4,364 354 105 4,364 354 105 81 -1 81 -1 215 -2 215 -2 222 136 222 136 83 212 532 83 212 532 262 599 1,225 262 599 1,225 217 726 1,200 217 726 1,200 339 6 339 6 895 27 895 27 733 3 733 3 2,607 2,607 8,006 8,006 8,059 8,059 38 20 38 20 -1,542 172 79 172 79 -5,053 214 95 214 95 -4,628 -3,448 -11,170 -11,170 -9,151 -9,151 10 10 -1 -1 77,013 77,278 159 11 51 1,478 Total-Public Health Service ...... Health Care Financing Administration: Grants to States for Medicaid Payments to health care trust funds This Month .. ( ) 1,542 -3,448 27,308 1,542 11 25,767 5,053 82,068 5,054 4,628 4,629 72,648 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] Classification Department of Housing and Urban Development: Housing programs PubliC enterprise funds Credit accounts Federal housing administration fund HouSing for the elderly or handicapped fund Other Rent supplement payments Homeownershlp assistance Rental houSing assistance Rental hOUSing development grants Low-rent public hOUSing Public hOUSing grants College hOUSing grants Lower Income hOUSing assistance Section 8 contract renewals Other Total-Housing programs PubliC and Indian HOUSing programs: Low-rent public hOUSing-Loans and other expenses Payments for operation of lOW-Income housing prOlects Community Partnerships Against Crime Other Total-Public and Indian HOUSing programs Government National Mortgage ASSOCiation: Management and liquidating functions fund Guarantees of mortgage-backed securities Total-Government National Mortgage Association Community Planning and Development: Community Development Grants Home Investment partnerships program Other Total-Community Planning and Development Management and Administration Other Propnetary receipts from the public Offset ling governmental receipts Total-Department of Housing and Urban Development ............................................. Department of the Interior: Land and minerals management· Bureau of Land Management: Management of lands and resources Other Minerals Management Service Office of Surface Mining Reclamation and Enforcement Total-Land and minerals management Water and sCience Bureau of Reclamation Construction program Operation and maintenance Other Central utah prOject United States Geological Survey Bureau of Mines Total-Water and sCience Fish and Wildlife and parks. United States Fish and Wildlife Service National Biological Survey National Park Service Total-FIsh and wildlife and parks This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross jAPPlicable j Outlays Outlays Receipts Gross jAPPlic.ablej Outla s Outlays Receipts y Gross jAPPlicable! Outlays Receipts Outlays 11 5 6 39 23 17 39 27 12 329 355 56 -27 -56 61 4 8 51 2.650 253 156 14 27 160 3.592 125 -942 128 156 14 27 160 1.496 308 140 31 31 172 1.461 168 (00) 35 140 140 31 31 172 ("") 64 327 2 849 487 26 308 1.030 5 1.739 989 75 308 1,030 5 1,739 989 75 317 958 5 2.473 1,159 31 317 958 5 2,473 1.159 31 1,803 7.445 3,740 3.705 7,160 1,656 5,504 3 230 186 44 243 197 46 239 18 7 676 55 20 676 55 20 665 38 2 795 948 (00) 61 4 8 51 64 327 2 849 487 26 2,219 3 416 r 0) 239 18 7 (00) 665 38 2 197 266 (00) 266 981 16 41 -25 49 181 -132 115 181 -66 16 41 -25 49 181 -132 115 181 -66 425 108 30 8 425 108 22 1,215 298 89 27 1,215 298 61 1,070 300 72 34 1,070 300 38 563 8 555 1,601 27 1,574 1.442 34 1.409 229 11 44 229 11 -44 116 15 2-14 83 4 14 4 116 15 -4 451 2,701 10,316 4,178 6,138 9,795 2,072 7,723 60 11 11 169 48 122 169 48 122 168 191 199 83 4 3,152 60 11 11 186 751 168 191 199 20 20 114 114 90 90 103 103 453 453 648 648 26 16 27 26 16 12 30 6 64 55 60 1 108 32 99 61 102 23 108 42 6 99 61 72 23 108 36 36 320 435 36 399 37 13 2 37 11 64 55 90 1 108 38 119 17 102 357 106 5 87 106 5 87 294 18 327 294 18 327 273 25 359 273 25 359 198 198 639 639 657 657 15 (00) (0 0) 12 30 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] This Month Current Fiscal Vear to Date Gross IAPPlicablel Receipts Outlays Outlays Gross IAPPlicable! 0 tl Outlays Receipts u ays Prior Fiscal Vear to Date Classification Department of the Interlor:-Contlnued Bureau of Indian Affairs: Operation of Indian programs ............................ . Indian tribal funds ........................................ . Other ...................................................... . 127 11 21 ....................... . 158 Territorial and international affairs .......................... . Departmental offices ........................................ . Proprietary receipts from the public ........................ . Intrabudgetary transactions ................................. . Offsetting governmental receipts ........................... . 4 7 Total-Bureau of Indian Affairs Total-Department of the Interior Department of Justice: Legal activities .............................................. . Federal Bureau of Investigation ............................ . Drug Enforcement Administration ........................... . Immigration and Naturalization Service ..................... . Federal Prison System ...................................... . Office of Justice Programs ................................. . Other ........................................................ . Intrabudgetary transactions ................................. . Offsetting governmental receipts ........................... . Total-Department of Justice •.................••....... Department of Labor: Employment and Training Administration: Training and employment services ....................... . Community Service Employment for Older Americans ." Federal unemployment benefits and allowances ........ . State unemployment insurance and employment service operations ................................................ . Payments to the unemployment trust fund ............. . Advances to the unemployment trust fund and other funds ..................................................... . Unemployment trust fund: Federal-State unemployment insurance: State unemployment benefits ........................ . State administrative expenses ....................... . Federal administrative expenses ..................... . Veterans employment and training .................. . Repayment of advances from the general fund .... . Railroad unemployment insurance ..................... . Other .................................................... . 292 75 2 127 11 19 72 2 157 440 4 128 31 7 54 -17 -54 -17 573 73 182 152 59 131 248 76 33 11 4 2 381 17 153 4 436 554 2 551 128 31 -337 -52 272 488 -95 ) (") 377 1,619 2,548 538 449 225 388 667 255 122 182 152 59 131 237 76 33 577 577 513 185 434 762 219 140 -8 159 513 185 434 729 219 140 -8 -159 192 2,630 2,638 -1 .. ( 1,996 33 272 77 77 500 -1 Outla s y 381 17 156 .. ( I 292 75 68 337 -52 Gross IAPPlic.able Outlays Receipts ) 526 32 -488 -95 ..) ( 2,021 538 449 225 388 635 255 122 -6 -6 32 -32 43 837 2,822 308 33 26 308 33 26 1,011 92 74 1,011 92 74 1,117 96 65 1,117 96 65 -66 -66 44 44 37 37 1,772 337 1,772 337 4,906 800 18 38 4,906 800 18 38 4,614 802 24 46 4,614 802 24 46 880 131 -131 163 2,475 1 1 16 16 6 2 6 2 16 16 5 5 14 5 14 5 Total-Unemployment trust fund .................... . 2,133 2,133 5,783 5,783 5,506 5,506 Other ...................................................... . 7 7 18 18 21 21 Total-Employment and Training Administration ...... . 2,440 2,440 7,023 7,023 6,841 6,841 Pension Benefit Guaranty Corporation ..................... . Employment Standards Administration: Salaries and expenses .................................. .. Special benefits ........................................... . Black lung disability trust fund .......................... .. Other ...................................................... . Occupational Safety and Health Administration ............ . Bureau of Labor Statistics ................................. . Other ........................................................ . Proprietary receipts from the public ........................ . Intrabudgetary transactions ................................. . 89 -135 247 246 219 15 70 43 10 21 12 35 47 199 133 40 62 50 109 47 199 133 40 62 50 109 58 -717 144 40 70 50 95 -79 -79 -140 -140 -163 Total-Department of Labor .....................•....... 2,655 2,431 7,770 7,768 6,637 15 70 43 10 21 12 35 224 .. ( ) 224 13 .. ( ) 129 91 58 -717 144 40 70 50 95 -1 -1 -163 130 6,507 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] Classification Department of State: Administration of Foreign AHalrs DiplomatiC and consular programs AcquIsition and maintenance of buildings abroad Payment to Foreign Service retirement and disability fund Foreign Service retirement and disability fund Other This Month Current Fiscal Year to Date Prior Fiscal Year to Data Gross jAPPlic,ablej Outlays Outlays Receipts Gross jAPPlic,ablej Outla s Outlays Receipts y Gross jAPPlicablej Outlays Receipts Outlays 139 42 139 42 426 145 426 145 436 142 436 142 25 37 30 25 37 30 25 112 94 25 112 94 129 110 76 129 110 76 Total-Administration of Foreign AHairs 274 274 803 803 893 893 International organizations and Conferences Migration and refugee assistance Other Proprietary receipts from the public Intrabudgetary transactions OHsetting governmental receipts 100 81 19 100 81 19 315 169 58 315 169 58 1,021 220 41 1,021 220 41 -34 -34 -34 -34 -182 -182 439 439 1,311 1,311 1,993 1,993 1,477 15 25 1,477 15 25 4,953 43 71 4,953 43 71 4,934 46 52 4,934 46 52 1,517 1,517 5,067 5,067 5,033 5,033 29 76 76 64 64 ..) 253 18 308 60 3 308 58 344 52 3 344 48 ) 271 368 3 366 396 3 392 104 194 26 104 194 26 444 541 65 444 541 65 144 488 419 144 488 419 324 324 1,050 1,050 1,050 1,050 294 294 1,035 1,035 423 423 145 190 17 145 190 17 427 529 51 427 529 51 (00) (00) 533 638 53 708 533 638 53 708 1,932 Total-Department of State .............................. Department of Transportation: Federal Highway Administration: Highway trust fund: Federal-aid highways Other Other programs Total-Federal Highway Administration National Highway TraHic Safety Administration Federal Railroad Administration: Grants to National Railroad Passenger Corporation Other Total-Federal Railroad Administration Federal Transit Administration: Formula grants Discretionary grants Other Total-Federal Transit Administration Federal Aviation Administration: Operations Airport and airway trust fund: GrantS-in-aid for airports Facilities and equipment Research, engineering and development Operations 29 253 18 ( 271 ( .. 351 351 1,007 1,007 1,932 ("0) -1 (00) -1 (00) (00) (00) Total-Federal Aviation Administration 645 644 2,043 2,042 2,355 (00) 2,355 Coast Guard: Operating expenses Acquisition, construction, and improvements Retired pay Other 234 15 47 19 (00) 234 15 47 18 611 91 133 15 611 91 133 14 625 86 132 64 625 86 132 63 314 (00) 314 849 848 907 906 44 5 1 39 -10 128 40 90 39 -1 153 99 Total-Airport and airway trust fund Other Total-Coast Guard Mantlme Administration Other Proprietary receipts from the public Intrabudgetary transactions Offsetting governmental receipts Total-Department of Transportation -9 (00) .. ( ) 39 .. ) ( ................... 3,134 5 -5 13 3,121 14 9,623 1 112 99 -1 11 -11 59 9,999 41 (00) (00) 19 -19 65 9,558 10,058 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] This Month Classification l Gross IAPPlicable Outlays Receipts Department of the Treasury: Departmental offices: Exchange stabilization fund .................. .. Other ........................................... . 77 10 Outlays Current Fiscal Year to Date Prior Fiscal Year to Date Gross lAPPlicabl1 0 tl u ays Outlays Receipts Gross jAPPlicable lOti Outlays Receipts u ays 18 67 18 -324 109 22 -346 109 -559 65 52 587 105 36 28 54 587 199 83 22 54 587 199 83 22 5 -564 65 Financial Management Service: Salaries and expenses ................................... . Payment to the Resolution Funding Corporation Claims. judgements. and relief acts ..................... . Net interest paid to loan guarantee financing accounts Other ..................................................... .. 11 11 54 -14 12 54 -14 12 52 587 105 36 28 Total-Financial Management Service ................. . 63 63 808 808 946 946 Federal Financing Bank .................................... .. Bureau of Alcohol. Tobacco and Firearms: Salaries and expenses ................................... . Internal revenue collections for Puerto Rico ............. . United States Customs Service ............................ . Bureau of Engraving and Printing .......................... . United States Mint .......................................... . Bureau of the PubliC Debt ..................... .. ........ .. 556 556 336 336 337 337 20 22 137 -3 49 44 20 22 137 -3 -41 44 49 60 413 49 60 413 73 -140 73 90 56 448 -8 -48 74 90 56 448 -8 -48 74 87 316 121 87 316 121 277 887 310 887 310 395 952 340 395 952 340 57 57 203 203 51 51 155 .. 155 575 575 639 639 ( ) (* .) ( ( Total-Internal Revenue Service ....................... . 737 737 2.251 United States Secret Service ............................... . Comptroller of the Currency ................................ . Office of Thrift Supervison ................................ .. 42 30 10 2 42 27 1 9 122 87 52 Interest on the public debt Public issues (accrual basis) ............................. . Special issues (cash basis) .............................. .. 20.563 40.113 20.563 40.113 60,676 Internal Revenue Service: Processing. assistance. and management ............... . Tax law enforcement ..................................... . Information systems ...................................... . Payment where earned income credit exceeds liability for tax .................................................. .. Health insurance supplement to earned income credit .. Refunding internal revenue collections. interest ..... . Other .............................................. .. Total-Interest on the public debt ......... . Other ........................................................ . Proprietary receipts from the public ........................ . Receipts from off-budget federal entities .................. . Intrabudgetary transactions ................................. . Offsetting governmental receipts ........................... . Total-Department of the Treasury .................... . 90 .. 2 217 277 .. ) 1 2,251 2.379 122 82 48 137 105 37 60.832 47.481 60.832 47.481 56.278 45.685 56.278 45.685 60.676 108.313 108.313 101.964 101.964 7 -264 21 973 21 -973 12 264 -226 -70 -2.554 299 -2.554 -299 -2.041 70 437 61,822 109,895 1,521 108,375 103,992 7 -226 62,259 2 77 15 ) 6 4 2.379 10 3 137 95 34 693 12 -693 255 -2.041 -255 966 103,026 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] Classification Department of Veterans Affairs: Veterans Health Administration: Medical care Other This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross !APPlicable! Outlays Receipts Outlays Gross !APPlicable! Outlays Outlays Receipts Gross IAPPlicablel Outlays Receipts OutlaYI 1,192 52 19 1,192 33 3,642 154 305 215 31 4,500 336 11 3,642 102 3,802 172 176 130 -7 4.500 336 11 196 129 59 4,386 332 18 255 4 -53 -5 285 5 30 8 5,347 5,449 ( 163 271 151 352 52 Veterans Benefits Administration' PubliC enterprise funds: Guaranty and Indemnity fund Loan guaranty revolving fund Other Compensation and pensions Readjustment benefits Post-Vietnam era veterans education account Insurance funds National service life United States government life Veterans special life Other 2,911 146 5 51 35 -31 2,911 146 5 80 1 10 -3 80 1 -65 -3 255 4 28 -5 81 Total-Veterans Benefits Administration 3,288 3,131 5,680 333 40 93 163 271 75 157 ................. 4,662 1 128 182 99 43 ..53) -53 ( ( 52 -52 -4 169 -4 -169 -4 -3 4,416 9,906 9,297 9,923 1 128 182 99 43 -18 39 398 617 309 142 39 398 617 309 142 -46 202 348 507 324 369 246 ..) ( ..) ( General Services Administration: Real property activities Personal property activities Other Proprietary receipts from the public 453 460 -24 41 ................ National Aeronautics and Space Administration: Human space flight SCience, aeronautics and technology Mission support Research and development Space flight, control and data communications Construction of facilities Research and program management Other Total-National Aeronautics and Space Administration ___ , , ... , , ... , , ... - __ .. - -... - - - -... - -, -..... Office of Personnel Management: Government payment for annuitants, employees health and hfe Insurance benefits Payment to CIVil service retirement and disability fund CIVil service retirement and disability fund Employees life Insurance fund Employees and retired employees health benefits fund Other Intrabudgetary transactions' CIVil service retirement and disability fund: General fund contnbutlons Other ............... ..) -17 18 ............... 130 85 38 ..17) -4 Total-Environmental Protection Agency Total-Office of Personnel Management ..) ( ( Environmental Protection Agency: Program and research operations Abatement, control, and compliance Water infrastructure financing Hazardous substance superfund Other Proprietary receipts from the public Intrabudgetary transactions Offsetting governmental receipts Total-General Services Administration 27 25 31 40 93 Construction Departmental administration Proprietary receipts from the public: National service life United States government life Other Intrabudgetary transactions Total-Department of Veterans Affairs 78 59 18 ..) ..) ( ..) ( 46 132 93 40 435 1,505 460 -24 41 1,134 -61 139 47 1,458 1,501 394 -110 168 7 1,134 -61 139 -7 7 1,205 453 36 19 4.386 332 18 344 5,105 .. ( ) 151 352 ..68 -68 ) ("") 176 -176 -3 658 9,265 (" .) 2 202 348 507 324 369 -49 -250 -2 51 1,450 2 394 -110 168 -2 2 451 49 -2 64 80 ( 2 3,802 102 285 5 -49 8 -250 ..) ..) 608 ..) ( 70 ( ( (0 0) 477 1,212 487 229 166 59 11 19 487 229 166 59 11 19 1 1 1,333 991 492 207 124 67 2 3 1,333 991 492 207 124 67 2 3 216 349 332 1,277 857 74 82 3 973 973 3,220 3,220 3,190 3,190 291 291 725 725 870 870 3,258 138 -105 -3 9,780 541 3,925 -13 9,780 -135 218 -13 9,393 540 3,767 17 -2 -7 -7 -8 3,576 14,952 10,570 14,579 477 r .) 3,258 276 1,291 -3 r .) 139 1,396 -2 5,111 1,535 16 676 3,706 4,382 216 349 332 1,2n 857 74 82 3 676 3.915 9,393 -136 -148 17 -8 4,591 9,988 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] This Month Classification Small Business Administration: Public enterprise funds: Business loan fund ... . ............................ . Disaster loan fund ........................................ . Other ..................................................... . Other ....................................................... ,. Total-Small Business Administration Current Fiscal Year to Date Gross [APPlicable [ Outlays Outlays Receipts 76 25 30 31 -6 46 Gross Outlays 248 158 Prior Fiscal Year to Date I Applicable I I Receipts Out ays 152 69 Gross IAPPIIc.ableJ Outla s Outlays Receipts y 125 81 66 4 44 107 2 1 (") 3 96 90 4 -1 173 6 37 (") 37 111 (") 110 121 (") 121 139 83 78 520 190 331 426 152 274 979 979 654 185 6.415 654 185 6.415 70.354 237 70.354 237 2 Social Security Administration: Payments to Social Security trust funds .................. . Special benefits for disabled coal miners .................. . Supplemental security income program .................... . Office of the Inspector General ............................ . 12 56 4.246 12 56 4.246 170 170 6.592 6.592 (") (") 2 2 Federal old-age and survivors insurance trust fund (offbudget): Benefit payments ......................................... . Administrative expenses .................................. . Payment to railroad retirement account ................. . Quinquennial military service credit adjustment .......... . 24.647 287 24.647 287 73.376 516 73.376 516 129 129 129 129 Total-FOASI trust fund ............................... . 25.064 25.064 74.021 74.021 70.591 70.591 3.513 56 3.513 56 10.339 222 10.339 222 9.651 230 9.651 230 9.881 9.881 Federal disability insurance trust fund (off-budget): Benefit payments ......................................... . Administrative expenses .................................. . Payment to railroad retirement account ................. . Quinquennial military service credit adjustment .......... . Total-FDI trust fund ................................. .. Proprietary receipts from the public: On-budget ................................................. . Off-budget ................................................ . Intrabudgetary transactions: On-budget: Quinquennial adjustment for military service credits from FOASI and FDI: ........................ . Off -budgetJ ................................................ . Total-Social Security Administration Other independent agencies: Board for International Broadcasting .... . ................. . Corporation for National and Community Service ......... . Corporation for PubliC Broadcasting ...................... .. District of Columbia: Federal payment .......................................... . Other.. ..... .. .............................. . Equal Employment Opportunity Commission ............... . Export-Import Bank of the United States .................. . Federal Communications Commission ...................... . 203 203 203 203 3.773 3.773 10.764 10.764 30 -30 83 -83 (") (") (") (") -332 -12 -332 -979 32,777 91,216 (") (") 40 40 -5 13 79 12 -5 13 -201 12 -332 -12 32,807 30 -332 -979 -654 91,133 87,073 (") (") 91 275 91 275 59 98 286 84 714 7 379 -13 44 -188 143 930 140 315 -659 -136 423 379 (") 280 1 ..77 ( -1 12 44 (") 134 150 322 20 -82 -71 (' 'J 271 ) -77 (") -654 77 86,996 59 98 286 714 11 12 -1 57 575 31 (") 82 15 57 493 16 541 16 695 1.373 30 320 -832 -15 375 Federal Deposit Insurance Corporation: Bank insurance fund .................................... .. Savings association insurance fund ...................... . FSLlC resolution fund .................................... . Affordable housing and bank enterprise ................. . ("J Total-Federal Deposit Insurance Corporation 101 234 -133 1.014 1.386 -371 1.253 1.723 -470 98 108 19 12 17 80 108 19 12 204 477 60 34 21 75 129 477 60 34 21 183 693 65 78 105 693 65 65 13 Federal Emergency Management Agency: Public enterprise funds ................................... . Disaster relief ..................................... .. Emergency management planning and assistance ...... . Other ..................................................... .. Federal Trade Commission ........... . ................... .. Interstate Commerce Commission .......................... . Legal Services Corporation ................................ .. National Archives and Records Administration ............. . National Credit Union Administration: Credit union share insurance fund ...................... .. Central liquidity facility ..................... . Other ........ .. .................... . 89 1 11 69 83 82 6 6 1 1 4 738 1 5 11 11 (") 28 29 124 46 124 46 26 65 -2 4 -6 5 5 (") 10 1 9 12 ("J 12 -6 -9 3 90 6 7 17 13 5 28 29 1 66 10 8 ("J Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] Classification Other independent agencies:-Continued National Endowment for the Arts National Endowment for the Humanities National Labor Relations Board National SCience Foundation Nuclear Regulatory Commission Panama Canal Commission Postal Service Public enterprise funds (off-budget) Payment to the Postal Service fund Railroad Retirement Board: Federal windfall subSidy Federal payments to the railroad retirement accounts Rail Industry pension fund' Benefit payments Advances from FOASDI fund OASDI certifications Administrative expenses Interest on refunds of taxes Other Intrabudgetary transactions: Payments from other funds to the railroad retirement trust funds Other Supplemental annuity pension fund: Benefit payments Interest on refund of taxes Railroad Social Secunty eqUivalent benefit account: Benefit payments Interest on refund of taxes Other This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross jAPPlicablej Outlays Outlays Receipts Gross jAPPlic.ablel Outla s Outlays Receipts y Gross jAPPlicablej Outlays Receipts Outleys 42 39 41 619 123 133 -659 58 12.662 61 60 41 60 41 65 46 65 46 701 -274 275 16 8 701 -274 275 16 8 706 -271 271 18 16 2 706 -271 271 18 16 2 -41 -41 -46 -46 25 31 34 675 112 153 333 3 13.783 58 (" ") 20 r") 232 -90 90 6 8 232 -90 90 6 8 (" ") (" ") 5.481 3 102 51 '5.148 20 7 408 8 r ") -692 61 23 23 408 8 1.222 9 1.222 9 1.195 1.195 (" ") (" ") r ") 692 2.041 2.041 2.026 813 -6 87 2.492 293 593 3.236 1.050 32 82 2.375 277 636 5.024 457 -2.423 -6 87 405 293 135 527 -3.974 32 82 623 277 109 24.227 22.331 1.896 24.500 22.875 1.625 r ") (" ") 250 -13 32 746 81 264 888 255 -638 -13 32 96 81 9 8.348 7.618 731 22 Undistributed offsetting receipts: Other Interest Total-Employer share employee retirement 13.354 22 Resolution Trust Corporation Securities and Exchange Commission Smlthsonran Institution Tennessee Valley Authority United States Information Agency Other Employer share. employee retirement: Legislative Branch: United States Tax Court: Tax court Judges survivors annuity fund The Judiciary JudiCial SUrviVorS annuity fund Department of Defense-Civil: MIlitary retirement fund Department of Health and Human Services: Federal hospital Insurance trust fund: Federal employer contributions Postal Service employer contributions Payments for military service credits Department of State Foreign Service retirement and disability fund Office of Personnel Management: C,v,l service retirement and disability fund SOCial Security administration (off-budget): Federal old-age and survivors Insurance trust fund: Federal employer contributions Payments for military service credits Federal disability Insurance trust fund' Federal employer contributions Payments for military service credits Independent agencies Court of veterans appeals retirement fund 14.442 148 148 r ") 692 650 118 160 42 39 41 619 -24 -15 (" ") 7 Total-Railroad Retirement Board Total-Other independent agencies .................... Allowances ..................................................... 25 31 34 675 -6 -7 1 8 11 208 -69 6 1 8 11 208 33 57 2.088 n (" ") 1 1 2.026 1.752 ("") r ") n (" ") (") -912 -912 -2.749 -2.749 -3.044 -3,044 -155 -49 -155 -49 -515 -99 -515 -99 -475 -134 -475 -134 -9 -9 -25 -25 -25 -25 -962 -962 -2.516 -2.516 -2.352 -2.352 -403 -403 -1.210 -1.210 -1.182 17 -1,182 17 -72 -72 -216 -216 -212 -17 -212 -17 2.562 -2,562 -7.422 -7.422 18 (" ") (" ") -7,331 -7.331 Table 5. Outlays of the U.S. Government, December 1995 and Other Periods-Continued [$ millions] This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross IAPPlicable I Oullays Outlays Receipts Gross IAPPlicablel 0 tl Outlays Receipts u ays Gross IAPPlicablel Outla s Oullays Receipts y Classification Undistributed offsetting receipts:-Continued Interest received by trust funds: The Judiciary: Judicial survivors annuity fund Department of Defense-Civil: Corps of Engineers Military retirement fund Education benefits fund Soldiers' and airmen's home permanent fund Other. Department of Health and Human Services: Federal hospital insurance trust fund Federal supplementary medical insurance trust fund Department of Labor: Unemployment trust fund Department of State Foreign Service retirement and disability fund Department of Transportation: ............... Highway trust fund Airport and airway trust fund Oil spill liability trust fund Department of Veterans Affairs: National service life insurance fund United States government life Insurance Fund Environmental Protection Agency National Aeronautics and Space Administration Office of Personnel Management: Civil service retirement and disability fund Social Security administration (off-budget): Federal Old-age and survivors insurance trust fund Federal disability insurance trust fund Independent agencies Railroad Retirement Board Other ., . ........... Other ...... ( (' ') -1 73 ( ( .... -1 73 .... ) ) 000000000000 Total on-budget Total off-budget .. 0 Total off-budget 0 0 0 0 0 0 0 0 0 0 0 , 0 0 0 0 0 .. 0 0 0 0 0 0 0 0 0 0 0 000 ........................................... ........................................... -4 -2 -5,295 -13 -1 -2 -5,295 -13 -1 -1 -5,373 -15 -3 -1 -5,373 -15 -3 ( ( ( ( ..) .. .. ) .. ) ) -5,174 -549 -5,318 -903 -5,318 -903 -1,633 -1,633 -1,666 -1,666 -1,287 -1,287 -311 -311 -312 -312 -299 -299 -557 -383 -557 -383 ( ( .. ) -582 -385 -2 -582 -385 -2 -508 -371 -2 -508 -371 -2 -519 -4 -519 -4 -525 -4 -525 -4 -535 -4 -535 -4 ( ( ( ( ( ( ( ( ( ( ( ( .. ) ) ) .... .... ) ) ) ) .. ..) ..) ) .. ) .... ) ) -14,065 -14,065 -14,082 -14,082 -13,801 -13,801 -16,373 -1,078 -16,373 -1,078 -16,505 -1,093 -16,505 -1,093 -15,102 -823 -15,102 -823 -46 -46 ( ( -438 -6 25 -158 -2 -44 -158 -2 -44 -46,616 -44,555 -44,555 -2 -2 -438 -6 25 -40,465 -40,465 -46,616 ..) 121 -121 -43,027 121 -43,148 149,307 16,323 132,984 132,928 11,175 5,148 16,379 681 -681 -53,947 682 -54,629 430,026 50,232 379,794 121,753 351,460 35,789 11,231 78,566 14,443 ................................ +5,286 ........................................... ........................................... Total surplus (+) or deficit Total on-budget 0 -4 -5,174 -549 ..) ................ Total-Undistributed offsetting receipts -6 -5,051 -516 Rents and royalties on the outer continental shelf lands Sale of major assets Spectrum auction proceeds Total outlays ) ) ( ( -6 -5,051 -516 .... Total-Interest received by trust funds ..) 420 -420 -51,977 420 -52,397 427,495 46,601 380,894 315,671 352,333 33,247 319,086 64,123 75,162 13,355 61,808 -55,922 -73,387 -11,431 -69,497 -87,759 +16,717 +13,575 +14,372 MEMORANDUM [$ millions] Receipts offset against outlays Current Fiscal Year to Date Proprietary receipts Receipts from off-budget federal entities Intrabudgetary transactions Governmental receipts Total receipts offset against outlays Comparable Period Prior Fiscal Year 11,175 11,088 79,624 600 91,398 75,759 554 87,400 'The Postal Service accounting IS composed of thirteen 28-<Jay periods. To conform With the MTS calendar-month reporting baSIS used by all other Federal agencies, the MTS reflectgs USPS results through December 8th and estimates for $1,451 mlillon through December 31st. No Transactions. (' 0) Less than $500,000 Note Details may not add to totals due to rounding 'Outlays have been adjusted by $175 m,lllon ,n November 1995 to reflect additional reporting by the Department of the Air Force 'Includes a prior period adjustment 'Jncludes FICA and SECA tax credits, non-contributory military service credits, special benefits for the aged, and credit for unnegollated OASI benefit checks. 19 Table 6, Means of Financing the Deficit or Disposition of Surplus by the U,S, Government, December 1995 and Other Periods [$ millions] Net Transactions (-) denotes net reduction of either liability or asset accounts Assets and Liabilities Directly Related to Budget Off-budget Activity Account Balances Current Fiscal Year Beginning of Fiscal Year to Date This Month I This Year liability accounts: BorroWing from the public' PubliC debt seCUrities, ISSUed under general Financing authorities: Obligations of the United States, ISSUed by: United States Treasury Federal FinanCing Bank I This Month 14,682 107,400 4,958,983 15,000 4,974,330 15,000 4,973,665 15,000 -665 14,682 107,400 4,973,983 4,989,330 4,988,665 -8 -752 -23 -857 -23 2,126 1,236 81,231 1,220 81,126 1,213 80,375 79 15,516 105,251 4,893,989 4,909,425 4,909,505 104 1,284 -1,777 26,962 28,142 28,245 183 16,799 103,474 4,920,950 4,937,567 4,937,750 18,578 -16,328 43,944 1,320,800 1,285,894 1,304,472 37 207 140 3,188 3,358 3,395 Plus premium on public debt securities Less discount on public debt securities Total public debt securities net of Premium and discount Agency securities, issued under special financing authorities (see SChedule B. for other Agency borrowing, see Schedule C) Total federal seCUrities Net federal securities held as investments of government accounts This Year -665 Total, public debt securities Deduct: Federal seCUrities held as investments of government accounts (see Schedule D) Less discount on federal securities held as investments of government accounts Prior Year Close of This month 18,541 -16,535 43,804 1,317,612 1,282,537 1,301,077 -18,358 33,335 59,669 3,603,338 3,655,031 3,636,672 Accrued interest payable to the public AllocatIOns of special drawing rights Deposit funds Miscellaneous liability accounts (includes checks Outstanding etc.) 15,136 2 -8,083 2,750 706 -97 8,650 -4,234 5,195 -37 905 -2,731 50,611 7,380 8,186 4,813 36,181 7,281 24,920 -2,171 51,317 7,283 16,836 580 Total liability accounts " .................................................. -8,554 38,360 63,002 3,674,329 3,721,242 3,712,688 276 -5,887 -5,611 -2,641 -14,814 313 -9,675 5,703 20,402 5,979 14,515 -17,454 -9,362 8,620 29,329 37,949 26,105 20,495 2 2 68 11,035 -10,168 11,034 -10,168 11,037 -10,168 2 2 68 867 866 869 76 -535 165 (' ') -200 27 1 31,762 8,196 -26,315 -105 31,762 7,661 -26,226 -105 31,762 7,661 -26,151 -105 337 -33 136 -36 1,145 1,482 1,482 76 14,682 14,574 14,650 (' .) ( ) 459 90 -458 30,525 30,156 30,615 -5,074 -17,396 -9,788 84,023 71,702 66,628 51 706 1,151 172 2,488 -2,827 -913 1,807 -1,321 -12,714 19,732 -1,721 -12,491 21,513 -5,699 -12,542 22,220 -4,548 Total borrowing from the public Asset accounts (deduct) Cash and monetary assets: U.S. Treasury operating cash:' Federal Reserve account Tax and loan note accounts Balance Special drawing rights: Total holdings SDR certificates issued to Federal Reserve banks Balance Reserve position on the U.S. quota in the IMF: US. subscription to International Monetary Fund: Direct quota payments Maintenance of value adjustments Letter of credit issued to IMF Dollar depOSits With the IMF Receivable/Payable (-) for interim maintenance of value adjustments Balance Loans to International Monetary Fund Other cash and monetary assets Total cash and monetary assets Net activity, guaranteed loan financing Net activity, direct loan financing Miscellaneous asset accounts Total asset accounts ..................................................... .................................... Excess of liabilities (+) or assets (-) .. 3,267 17,562 -10,215 89,320 75,025 71,758 5,286 +55,922 +73,217 +3,585,008 +3,646,217 +3,640,930 +3,585,008 +3,646,217 +3,640,930 TransactIOns not applied to current year's surplus or deficit (see Schedule a for Details) Total budget and off-budget federal entities (financing of deficit (+) or disposition of surplus (-)) .............................................. ..) ( 171 -5,286 +55,922 +73,387 No Trangactlons (' 'J Less than $500,000 Note' Details may not add to totals due to rounding , Major sources of Information used to determine Treasury s operating cash Income Indude Federal Reserve Banks the Treasury Regional Finance Centers. the Intemal Revenue Servlce Centers the Bureau of the PubliC Debt and vanous electroniC systems DepoSits are reflected as received and Withdrawals are reflected as processed 20 Table 6. Schedule A-Analysis of Change in Excess of Liabilities of the U.S. Government, December 1995 and Other Periods [$ millions] Fiscal Year to Date Classification This Month This Year ... Excess of liabilities beginning of period: Based on composition of unified budget in preceding period Adjustments during current fiscal year for changes in composition of unified budget: Revisions by federal agencies to the prior budget results ..... . Excess of liabilities beginning of period (current basis) 3.646.217 I Prior Year 3.584.970 3,422.146 39 -268 55.922 73.387 ---------------------------3.646.217 3.585.008 3.421.878 ...... . Budget surplus (-) or deficit: Based on composition of unified budget in prior fiscal yr .......... . Changes in composition of unified budget ........................... . -5.286 --------~------------------ Total surplus (-) or deficit (Table 2) ................................... . -5.286 55.922 73.387 -16.717 -13.575 -14.372 ==================== 11,431 69.497 87.759 Total-on-budget (Table 2) Total-off-budget (Table 2) Transactions not applied to current year's surplus or deficit: Seigniorage ............................................................ . -171 Total-transactions not applied to current year's Surplus or deficit ............................................................... . -171 ---------------------------- Excess of liabilities close of period .................................. . 3,640,930 3,495,095 3,640,930 Table 6. Schedule B-Securities Issued by Federal Agencies Under Special Financing Authorities, December 1995 and Other Periods [$ millions] Net Transactions (-) denotes net reduction of liability accounts Account Balances Current Fiscal Year Classification Fiscal Year to Date This Month I This Year Agency securities, issued under special financing authorities: Obligations of the United States. issued by: Export-Import Bank of the United States ............................... . Federal Deposit Insurance Corporation: FSUC resolution fund ................................................. . Obligations guaranteed by the United States. issued by: Department of Defense: Family housing mortgages ............................................ . Department of Housing and Urban Development: Federal Housing Administration ....................................... . Department of the Interior: Bureau of Land Management ......................................... . Department of Transportation: Coast Guard: Family housing mortgages .......................................... . Obligations not guaranteed by the United States. issued by: Legislative Branch: Architect of the Capitol ............................................... . Department of Defense: Homeowners aSSistance mortgages .................................. . Independent agencies: Farm Credit System Financial Assistance Corporation ............... . National Archives and Records Administration ....................... . Tennessee Valley Authority ........................................... . 4 10 4 (>0) Total, agency securities .......................................... . ... No Transactions. (' ') Less than $500,000. Note: Details may not add to totals due to rounding. 21 Beginning of This Year Prior Year 4 4 I Close of This month This Month (>0) ( .. ) (>0) 158 158 158 6 6 6 87 93 97 13 13 13 (>0) (>0) (>0) 182 185 186 (>0) (>0) 1.261 295 26.131 1.261 295 26.229 28,142 28,245 (>0) 99 1.269 -1.785 1.261 295 24.960 104 1,284 -1,777 26,962 Table 6. Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities, December 1995 and Other Periods [$ millions] Account Balances Current Fiscal Year Transactions Classification Fiscal Year to Date Beginning of This Month I This Year Borrowing from the Treasury: Funds Appropriated to the President: International Security Assistance: Foreign military loan program Agency for InternatIOnal Development: InternatIOnal Debt Reduction Housing and other credit guaranty programs Private sector revolving fund Overseas Private Investment Corporation Department of Agriculture: Farm Service Agency: Commodity Credit Corporation ............ Agricultural credit insurance fund Natural Resources Conservation Service Rural Utilities Service: Rural electrification and telephone revolving fund Rural Telephone Bank ............. Rural development insurance fund .. Rural communication development fund Rural hOUSing and Community Development Service: Rural housing insurance fund Self-help housing land development fund Rural BUSiness and Cooperative Development Service: Rural development loan fund Rural economic development loan fund Foreign Agricultural Service . . . . . . . . . . .. Department of Education: Federal direct student loan program Federal family education loan program College housing and academic facilities fund College housing loans Department of Energy: Bonneville power administration fund Department of Housing and Urban Development: Housing programs: Federal Housing Administration Housing for the ederly and handicapped Public and Indian housing: Low-rent public housing Department of the Interior: Bureau of Reclamation Loans Bureau of Mines. Helium Fund Bureau of Indian Affairs: Revolving funds for loans Department of Justice: Federal prison industries. incorporated Department of Transportation: Federal Highway Administration: High priority quarters loan fund Federal Railroad Administration: Railroad rehabilitation and improvement finanCing funds Amtrak corridor improvement loans Other Federal AViatIOn Administration: Aircraft purchase loan guarantee program MinOrity bUSiness resource center fund Department of the Treasury: Federal FinanCing Bank revolving fund Department of Veterans Affairs Guaranty and Indemnity fund Loan guaranty revolVing fund Direct loan revolVing fund Native amencan veteran hOUSing fund VocatIOnal rehabilitation revolving fund 343 337 This Month 788 1.131 1.131 335 125 1 52 335 125 1 52 335 125 1 66 13 13 -34 -6.916 602 -10.227 -1.748 6.987 1.605 4 106 2.207 4 71 2.207 4 678 -28 678 -19 220 689 98 715 8.666 664 2.806 25 8.666 672 3.026 25 9.344 3.026 25 951 1.177 1 5.353 .. 6.304 ) 6.304 (H) (*') 17 40 5 -7 61 30 563 78 30 563 78 30 563 3.192 7.607 4.868 (H) r .) 5.067 1.134 184 360 9,482 1.134 184 360 12.674 1.134 184 359 2.563 2.563 2.563 1.647 7.714 1.579 7.714 1.579 7.714 -20 20 20 9 17 252 26 252 26 252 28 28 28 20 20 20 32 32 32 ..) (H) (") -68 -20 18 -21 -770 ( -1 .... ( ( ) ) ( 14 14 -3.012 -5.616 -2 -5.540 644 3 3 3 ) (H) (") (") (H) (") 15 15 28 69.297 66.693 63.681 302 1.272 1 7 2 302 1.272 1 7 302 1.272 1 7 .. ( 22 I This Year Prior Year Close of This month Table 6, Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities, December 1995 and Other Periods-Continued [$ millions] Account Balances Current Fiscal Year Transactions Classification Fiscal Year to Date This Month This Year Borrowing from the Treasury:-Contlnued Environmental Protection Agency: Abatement, control, and compliance loan program Small Business Administration: Business loan and revolving fund ...................... . ............. .. Disaster loan fund ................................ .. ............... . Independent agencies: District of Columbia .................................................... .. Export-Import Bank of the United States ............................. . Federal Emergency Management Agency: National insurance development fund . . ............... . Disaster assistance loan fund .............................. . Pennsylvania Avenue Development Corporation: Land aquisition and development fund .............................. . Railroad Retirement Board: Rail industry pension fund ........................................... . Social Security equivalent benefit account .......................... . Smithsonian Institution: John F. Kennedy Center parking facilities .......................... . Tennessee Valley Authority ............................................ .. 10 -51 59 83 258 Total agency borrowing from the Treasury financed through public debt securities issued ....•.•.•......... Borrowing from the Federal Financing Bank: Funds Appropriated to the President: Foreign military financing program ..................................... . Department of Agriculture: Farm Service Agency: Agriculture credit insurance fund .................................... . Rural Utilities Service: Rural electrification and telephone revolving fund ................... . Rural development insurance fund ................................... . Rural housing and Community Development Service: Rural housing insurance fund ....................................... .. Department of Defense: Department of the Navy ................................................ . Defense agencies ...................................................... .. Department of Health and Human Services: Medical facilities guarantee and loan fund ............................. . Department of Housing and Urban Development: Low rent housing loans and other expenses ..... .. ................ .. Community Development Grants ....................................... . Department of Interior: Territorial and international affairs ...................................... . Department of Transportation: Federal Railroad Administration ................................. . General Services Administration: Federal buildings fund .................................... . Small Business Administration: Business loan fund ....................................... .. Independent agencies: Export-Import Bank of the United States ............................ .. Pennsylvania Avenue Development Corporation ....................... . Postal Service ....................................................... . Resolution Trust Corporation ......................................... .. Tennessee Valley Authority ............................................ .. Total borrowing from the Federal Financing Bank •.•.••..•••..•.. I Beginning of Prior Year 11 -27 125 761 734 This Year I Close of This month This Month 37 47 47 342 7,999 342 7,999 342 7,999 147 2,665 96 2,723 96 2,723 268 222 310 222 393 222 85 85 85 2,128 2,828 2,128 3,331 2,128 3,588 20 150 20 150 20 150 1,143 -1,284 -9,645 134,892 132,466 133,609 -13 -35 -37 3,493 3,471 3,458 1,470 1,470 1,470 3 -131 76 21,875 3,675 21,741 3,675 21,744 3,675 -685 -410 21,700 21,015 21,015 1,624 -192 1,624 -192 1,624 -192 -9 33 33 33 -58 -5 1,689 89 1,627 85 1,627 84 21 21 21 -62 -5 -1 (* ') -1 -1 14 14 14 -14 -16 64 1,893 1,891 1,877 -3 -13 -34 361 352 349 -463 6 -1,500 -1,035 -463 24 -1,500 -2,738 -478 29 -900 -3,577 -200 2.506 374 7,265 13,209 3,200 2,506 391 7,265 11,506 3,200 2,044 398 5,765 10,471 3,200 -3,020 -5,624 -5,540 84,298 81,694 78,674 ... No Transactions. (' ') Less than $500.000 Note: Details may not add to totals due to rounding Note: This table includes lending by the Federal Financing Bank accomplished by the purchase of agency financial assets. by the acquisition of agency debt securities, and by direct loans on behalf of an agency. The Federal Financing Bank borrows from Treasury and issues its own securities and in tum may loan these funds to agencies in lieu of agencies borrowing directly through Treasury or issuing their own securities. 23 Table 6, Schedule D-Investments of Federal Government Accounts in Federal Securities, December 1995 and Other Periods [$ millions] Securities Held as Investments Current Fiscal Year Net Purchases or Sales (-) Classification This Year 1 Department of Agriculture Department of Commerce Department of Defense-Military: Defense cooperation account Department of Energy ............ Department of Housing and Urban Development: Housing programs: Federal housing administration fund Govemment National Mortgage Association: Management and liquidating functions fund: Agency securities Guarantees of mortgage-backed securities: Public debt securities Agency securities Other Department of the Interior Department of Labor .... , . , ... , . , Department of Transportation Department of the Treasury .... Department of Veterans Affairs: Canteen service revolving fund Veterans reopened insurance fund . Servicemen's group life insurance fund. Independent agencies: Export-Import Bank of the United States Federal Deposit Insurance Corporation: Bank insurance fund .. , ' Savings association insurance fund . FSLlC resolution fund ...... , .... ,. Federal Emergency Management Agency: National flood insurance fund National Credit Union Administration Postal Service Tennessee Valley AuthOrity Other Other ' Total Federal funds • This Year Prior Year Federal funds: Total public debt securities Total agency securities Beginning of Fiscal Year to Date This Month (") ( ) .. (") 281 198 .. ( ••••••••••••• * •••••••••••••••••••• ~ •••••••• This Month ) (") 1 2 20 22 21 (' 0) 547 -4 217 1 4,951 1 5,217 5,498 370 -81 6,678 6,850 7,048 15 15 15 4.310 1 216 3,422 5.341 488 3,278 4,334 1 216 3.154 5,480 493 3,093 1 24 124 96 -268 138 5 -185 7 -277 -316 12 534 19 464 -94 16 1.306 4,210 1 209 3,431 5,796 481 2,559 3 19 2 14 38 526 4 37 521 4 40 540 4 r ') (' 0) 4 15 -38 '-263 -67 -17 135 331 68 -7 83 71 688 137 -258 824 16 -375 21,017 3,600 528 21.713 3.654 199 21.705 3.737 270 -14 -1,981 70 -78 -80 -269 904 76 18 -67 -3 -73 -2.701 86 255 3,325 1,249 1,242 1,422 2,978 3.258 2.961 2.146 1,427 3.075 3.245 980 2.146 1,498 2.997 -1,904 2,168 -133 64,399 16 68,471 16 66,567 16 -1,904 2,168 -133 64.415 68,487 66,583 ....2 9 ) ) (") 5 13 5 31 15 5 32 14 5 32 5 2 28 4 287 310 293 311 292 312 ) (") ( ) ("') -6 ........... ~ I Close 01 This month Trust funds: Legislative Branch: Library of Congress United States Tax Court Other The JudiCiary: Judicial retirement funds Department of Agriculture Department of Commerce Department of Defense-Military: Voluntary separation incentive fund Other Department of Defense-Civil: Military retirement fund Other ( ..) ..) ( ..) ( 1 ( ( .. .. (' 0) ( ..82 ) 37 -17 (") 685 88 641 71 723 71 -1,467 -4 10,216 80 13,405 -58 112,963 1,495 124,646 1,579 123,179 1,575 ( 24 Table 6, Schedule D-Investments of Federal Government Accounts in Federal Securities, December 1995 and Other Periods-Continued [$ millions] Securities Held as Investments Current Fiscal Year Net Purchases or Sales (-) Classification Fiscal Year to Date This Month This Year Beginning of 1 Prior Year This Year I Close of This month This Month Trust Funds-Continued Department of Health and Human Services: Federal hospital insurance trust fund .................................. . Federal supplementary medical insurance trust fund .................. . Other .................................................................... . Department of the Interior ................................................ . Department of Justice .................................................... . Department of Labor: Unemployment trust fund ............................................... . Other ............. ' ...................................................... . Department of State: Foreign Service retirement and disability fund ......................... . Other .................................................................... . Department of Transportation: Highway trust fund ..................................................... . Airport and airway trust fund .......................................... . Other .................................................................... . Department of the Treasury .............................................. . Department of Veterans Affairs: General post fund, national homes .................................... . National service life insurance .......................................... . United States government life Insurance Fund ........................ . Veterans special life insurance fund ................................... . Environmental Protection Agency ......................................... . National Aeronautics and Space Administration ......................... . Office of Personnel Management: Civil service retirement and disability fund ............................ . Employees life insurance fund ......................................... . Employees and retired employees health benefits fund ............... . Social Security Administration: Federal old-age and survivors insurance trust fund ................... . Federal disability insurance trust fund ................................. . Independent agencies: Harry S. Truman memorial scholarship trust fund .................... . Japan-United States Friendship Commission .......................... . Railroad Retirement Board ............................................. . Other .................................................................... . 4,889 -494 6 8 -40 1,579 -479 1 38 4,825 -1,711 16 64 45 129,864 13,513 992 315 126,554 13,529 987 344 40 131,443 13,035 993 353 -117 -7 897 -30 750 -28 47,141 77 48,155 54 48,038 46 317 -22 265 -27 395 -50 7,801 29 7,748 24 8,066 2 881 545 1 -27 -24 1,036 1 -109 482 -52 157 -92 18,531 11,145 1,880 235 17,626 11,636 1,880 154 18,507 12,182 1,881 127 419 60 159 286 -3 47 261 300 -3 48 442 (" ') (oo) (oo) 36 11,954 106 1,546 7,243 16 36 11,821 104 1,534 7,345 16 36 12,240 103 1,593 7,504 16 -1,855 -137 118 -45,850 134 -200 7,897 138 154 366,126 15,839 7,890 322,131 16,109 7,571 320,276 15,973 7,689 15,613 1,690 10,666 2,421 6 16,879 447,947 35,225 442,999 35,957 458,612 37,647 1 (oo) (oo) (" 0) (oo) (oo) -131 -6 279 -10 -102 127 54 16 14,440 544 53 16 14,851 540 54 16 14,719 534 Total public debt securities .......................................... . 20,482 -18,496 44,077 1,256,385 1,217,407 1,237,889 Total trust funds .•..•. , .................•. , ••.........••• , ......• 20,482 -18,496 44,077 1,256,385 1,217,407 1,237,889 Grand total ........... , ................. " ................................. .. 18,578 -16,328 43,944 1,320,800 1,285,894 1,304,472 (oo) Note: Investments are in public debt securities unless otherwise noted. Note: Details may not add to totals due to rounding. ... No Transactions (' 'I Less than $500,000. 25 Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1996 [$ millions) Classification March April May June July Aug. Sept Fiscal Year To Date Com· parable Period Prior F.Y. Oct. Nov. Dee. 51.840 2.180 39.524 1.694 53.179 38.021 144,542 41.895 134,809 36.468 30,549 1.214 342 4.453 1.160 1.786 2,070 34.919 2,940 340 5.154 1.349 1.593 2,496 37,123 223 416 4,870 1,383 1.439 1,618 102,591 4.377 1,097 14,477 3,891 4.817 6.183 100,758 Jan. Feb. Receipts: Individual Income taxes Corporation Income taxes . .... Social Insurance taxes and contributions: Employment taxes and contributions ... Unemployment insurance ,. ..... .... Other retirement contributions ...... EXCise taxes ....... .... Estate and gift taxes ......... ....... Customs duties . Miscellaneous receipts ... . ........ , ••••••• < •••• 4.552 1.122 14.497 3.513 5.421 6,366 ........... ........................ i5,593 90,008 138,271 323,872 72,200 63,651 110,322 246,173 (Off·budget) ..••...•.•.••.•••..••••. 23,393 26,357 89.024 87,673 130,810 307.50' :!lU:!- Total-Receipts this year (On·budget) TOlal-Receipts prior year . .. . , .. . . ...... 77,698 27,949 ...... ...... ...... , ... 65.384 62.083 103,860 ....... .. 23,639 25.590 26.950 Legislative Branch . . . . . . . . . . . . . . .. . The Judiciary ........................... Executive Office of the President ....... Funds Appropriated to the President: Intemational Security Assistance ..... Intemational Development . . . . . . . . . . . . . ...... Assistance ......... ................ Other .. Department of Agriculture: Commodity Credit Corporation and Foreign Agricultural Service ......... .. , ... , .. , ' ...... .. Other .' . " .. Department of Commerce ............... 175 197 14 173 196 14 158 226 14 506 619 42 903 656 61 120 764 239 1,123 3,837 801 -199 256 183 240 -286 1.297 -302 1.537 69 820 4,990 353 2,104 4,436 280 352 3.888 250 3.276 13.315 884 6,612 13.326 909 3.033 5,957 3,616 5,927 6,721 3.250 8.009 7.265 3.924 16.968 19,943 10,791 17,707 21,780 13.833 2.645 535 307 2,689 611 287 2,905 635 296 8,239 1,781 890 8,646 1.398 793 796 381 1,105 -328 702 253 2.603 306 778 Total Military ,. ................. 17.270 20.262 23.988 61,520 64.966 ................... Civil Department of Education ................ Department of Energy ............... .. Department of Health and Human Services: Public Health Service ......... ...... Health Care Financing Administration: Grants to States for Medicaid ... Federal hOSpital ins. trust fund .... Federal supp. med. ins. trust ... fund .......... , .. Other Administration for children and ...... families ..... ... ... .... .. .. Other Department of Housing and Urban ...... ..... ... Development Department of the Inlenor .,. Department of Justice " Department of Labor: ... Unemployment trust fund . .,. Other ..... ... Department of State Department of Transportation: Highway trust fund 2.660 2.056 1,495 2.707 2.336 1.383 2.593 1,891 1,498 7,960 6,283 4.376 7,848 8,159 4,756 1.902 1,696 1.478 5.076 4,951 7,252 9,082 8,071 9,869 6,702 10.302 22.024 29.254 21.488 26.533 5,367 3,934 5,913 3.792 6.032 3,577 17.312 11,304 15.926 9.162 2.426 -5.545 2,972 -5.485 2,607 -4.931 8.006 -15,962 6.059 -13.471 1.087 841 809 2.350 478 985 2.701 500 837 6,138 1,619 2.630 7,723 2.021 2,475 1.786 730 531 1,864 957 341 2.133 298 439 5.783 1.985 1,311 5.506 1,002 1,993 1,632 1.873 1.492 4,996 4,980 (On budgel) (Off budgel) ... 76. J79 Outlays . Department of Defense: Military: Military personnel ... .... .......... Operation and maintenance . . . . . . . Procurement ....................... Research, development, test. and ................... evaluation ..... Military construction ....... . , . . .. . .. .... ... Family housing Revolving and management .............. funds ... ......... ... Other ... . . . 26 32 Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1996-Continued [$ millions] Oct. Classification Nov_ Dec_ Jan_ Feb. March April May June July Aug. Sept. Fiscal Year To Date Comparable Period Prior F.Y. Outlays-Continued Other .................. ............... Department of the Treasury: Interest on the public debt ........... Other .................................. Department of Veterans Affairs: Compensation and pensions .......... National service life ................... United States govemment life ........ Other .................................. Environmental Protection Agency ....... General Services Administration ......... National Aeronautics and Space Administration .......................... Office of Personnel Management ....... Small Business Administration .......... Social Security Administration: Federal old-age and survivors ins. trust fund (off-budget) ............... Federal disability ins. trust fund (offbudget) ............................... Other .................................. Independent agencies: Fed. Deposit Ins. Corp.: Bank insurance fund ............... Savings association insurance fund ............................... FSLlC resolution fund .............. Affordable housing and bank enterprise .......................... Postal Service: Public enterprise funds (offbudget) ............................ Payment to the Postal Service fund ............................... Resolution Trust Corporation ......... Tennessee Valley Authority ........... Other independent agencies ...... ... Undistributed offsetting receipts: Employer share, employee retirement ............................ Interest received by trust funds ...... Rents and royalties on outer continental shelf lands ............... Other .................................. 1,506 1,427 1,630 4,563 5,019 21,631 -30 26,006 -1,053 60,676 1,146 108,313 62 101,964 1,062 101 75 1 1,442 484 339 1,488 63 1 1,710 538 389 2,911 63 1 1,441 435 477 4,500 202 4 4,592 1,458 1,205 4,386 218 5 4,656 1,450 451 1,128 3,576 16 1,119 3,418 238 973 3,576 76 3,220 10,570 331 3,190 9,988 274 24,544 24,413 25,064 74,021 70,591 3,516 174 3,475 2,233 3,773 3,941 10,764 6,348 9,881 6,523 -609 -69 20 -659 -832 -40 407 -14 87 -82 -71 -136 423 -15 375 (") ...... (") 1 1 -374 -618 333 -659 -692 55 -946 123 2,026 . ..... -840 186 1,792 3 -638 96 1,069 58 -2,423 405 4,888 61 -3,974 623 6,077 -2,365 -2,562 -5,736 -40,465 -7,331 -46,616 -7,422 -44,555 -681 -420 -2,404 -415 -361 -200 (.') (") -121 n ... Totals this year: (") (Off-budget) ........................ -2,807 -334 +16,717 +13,575 ...... . ..... ...... ...... ...... ...... .... 13,353 38,339 -18,358 33,335 59,669 ......................... (On-budget) ........................ Total outlays (Off-budget) .•......•.......•.••.... ..... Total-surplus (+) or deficit (-) (On-budget) ........................ Total borrowing from the public 118,352 128,458 132,984 379,794 92,151 101,767 121,753 315,671 26,691 11,231 64,123 -22,758 -38,450 26,201 +5,286 -55,922 -19,951 -38,116 -11,431 -69,497 120,365 124,915 135,613 380.894 95,307 99,464 124,316 319,086 25,059 25.452 11,297 61,808 Total-surplus (+) or deficit (-) prior year .................. ... . ..... -31,342 -37,242 Total-outlays prior year .......... (On-budget) (Off-budget) . .. , .......... .... ...... (On-budget) .... .. ....... (Off-budget) . " .. ... .... . ..... -4,803 -73.387 -29,922 -37,381 -20,456 -87.759 +138 +15,653 +14,372 -1,420 ... No transactions. (' .) Less than $500,000. Note: Details may not add to totals due to rounding. 27 Table 8. Trust Fund Impact on Budget Results and Investment Holdings as of December 31, 1995 [$ millions] Fiscal Yaar to Date This Month Securities held as Investments Current Fiscal Year Classification Beginning of Receipts Outlays Excess Receipts Outlays Excess This Year Trust receipts. outlays. and investments held: AIrport Black lung dIsabIlity Federal dIsability Insurance Federal employees life and health Federal employees retirement Federal hosp,tal Insurance Federal old-age and SUrvIVorS insurance Federal supplementary medical insurance HIghways MIlitary advances Railroad retirement MIlitary retirement Unemployment Veterans life insurance All other trust 18,077 30,001 84,576 16,568 5,772 4.329 1.344 18,743 6,178 583 1,122 1,007 133 10,764 84 9,897 29,254 74.021 17,312 5.590 3.851 1.981 6.989 5,783 206 936 735 22 2,360 -84 8,180 747 10,556 -745 183 478 -637 11,754 395 377 186 32.940 202.315 77.117 167.808 77,117 34.507 10,724 32,940 125,198 90,691 34,507 97.978 22 125,631 22 -27.653 208,402 64 298.831 64 -90.429 97.956 125.609 -27,653 208,338 298.767 -90.429 9.665 9,665 5,286 323.872 379,794 15,797 14,202 40,498 5,477 2,263 1.706 300 838 1.935 540 499 351 43 3,773 32 3,297 10,302 25,064 6,032 1,711 1.428 672 2,257 2.133 16 269 473 9 1,615 -32 12,500 3,900 15,435 -555 552 278 -371 -1.418 -198 524 230 Total trust fund receipts and outlays and investments held from Table 60 .......................................... Less: Interfund transactions 90.321 46.657 57.381 46,657 Trust fund receipts and outlays on the basiS of Tables 4 & 5 43,664 Total Federal fund receipts and outlays Less: Interfund transactions Federal fund receipts and outlays on the basis of Table 4 & 5 824 52 5,388 Less: Offsetting proprietary receipts Net budget receipts & outlays ,. ~ . .... ,. .,. ,. . ,. ,. ,. 3.349 3.349 138.271 132.984 No transactions Note. Inteliund receipts and outlays are transactions between Federal funds and trust funds such as Federal payments and contributions, and interest and profits on investments in Federal secuntles They have no net effect on overall budget receipts and outlays since the receIpts side of such transactIons IS offset against bugdet outlays. In this table, Inteliund receipts are shown as an adjustment to amve at total receipts and outlays of trust funds respectively 1,742 155 13,124 I This Month 11,145 11,636 12,182 35,225 23,729 374,219 129,864 447,947 13,513 18,531 35,957 23,681 330,177 126,554 442,999 13,529 17,626 37,647 23,662 328,640 131,443 458,612 13,035 18.507 14,440 112.963 47.141 13.606 14,060 14.851 124.646 48.155 13.458 14,136 14.719 123.179 48,038 13,937 14,288 1,256,385 1.217.407 1.237,889 -55,922 Note: Details may not add to totals due to rounding. 28 Close 01 This Month Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government, December 1995 and Other Periods [$ millions] Classification This Month Fiscal Year To Date Comparable Period Prior Fiscal Year Individual income taxes ........................................ . Corporation income taxes ...................................... . Social insurance taxes and contributions: Employment taxes and contributions ... . ...................... . Unemployment insurance .............. . .................... . Other retirement contributions Excise taxes Estate and gift taxes Customs ......... . Miscellaneous 53,179 38,021 144,542 41,895 134,809 36,468 37,123 223 416 4,870 1,383 1,439 1,618 102,591 4,377 1,097 14,477 3,891 4,817 6,183 100,758 4,552 1,122 14,497 3,513 5,421 6,366 Total ........................................................ . 138,271 323,872 307,507 National defense Intemational affairs General science, space, and technology ......................... . .............................. . Energy Natural resources and environment ........... . .............. . .. . .. . . .. .. . ............................ . Agriculture ......... Commerce and housing credit .................................... . Transportation ..................................................... . Community and Regional Development ....................... . Education, training, employment and social services ............ . Health .................. .. ...................... . Medicare ........................................................... . . ........................... . Income security ......... Social Security ...................... . Veterans benefits and services ......................... . Administration of justice ........ . ........................ .. General govemment .......... . ..................... . Interest.................. ........... .. .......... .. Undistributed offsetting receipts ............... . .......... . 25,376 431 1,274 -163 1,711 708 -451 3,117 912 3,623 8,567 14,794 19,738 28,505 4,435 1,233 1,924 19,934 -2,683 64,964 3,121 4,174 674 6,791 4,107 -3,576 9,529 2,942 11,364 28,413 41,522 52,394 84,454 9,309 3,714 4,354 59,557 -8,013 68,258 7,850 4,318 1,260 7,214 6,770 -3,968 9,961 3,000 13,513 27,402 37,844 50,757 80,472 9,291 3,794 4,788 56,212 -7,842 Total ., ..................................................... .. 132,984 379,794 380,894 RECEIPTS NET OUTLAYS Note: Details may not add to totals due to rounding. 29 Explanatory Notes the employee and credits for whatever purpose the money was Withheld. Outlays are stated net of offsetting collections (including receipts of revolVing and management funds) and of refunds. Interest on the public debt (publiC issues) is recognized on the accrual baSis. Federal credit programs subject to the Federal Credit Reform Act of 1990 use the cash baSIS of accounting and are divided into two components. The portion of the credit activities that involve a cost to the Government (mainly subsidies) is included within the budget program accounts. The remaining portion of the credit activities are in non-budget financing accounts. Outlays of off-budget Federal entities are excluded by law from budget totals. However. they are shown separately and combined with the onbudget outlays to display total Federal outlays. 1. Flow of Data Into Monthly Treasury Statement The Monthly Treasury Statement (MTS) IS assembled from data In the central accounting system The major sources of data Include monthly accounting reports by Federal entities and disbursing officers. and dally reports from the Federal Reserve banks. These reports detail accounting transactions affecting receipts and outlays of the Federal Government and off-budget Federal entities. and tilelr related effect on the assets and liabilities of the US Government. Information is presented in the MTS on a modified cash basIs 2. Notes on Receipts Receipts Included In the report are classified into the following major categories: (1) budget receipts and (2) offsetting collections (also called applicable receipts). Budget receipts are collections from the public that result from the exercise of the Government's sovereign or governmental powers, excluding receipts offset against outlays. These collections. also called governmental receipts. consist mainly of tax receipts (including social insurance taxes). receipts from court fines. certain licenses. and deposits of earnings by the Federal Reserve System. Refunds of receipts are treated as deductions from gross receipts. Offsetting collections are from other Government accounts or the public that are of a business-type or market-oriented nature. They are classified into two major categories: (1) offsetting collections credited to appropriations or fund accounts. and (2) offsetting receipts (i.e .. amounts deposited in receipt accounts). Collections credited to appropriation or fund accounts normally can be used without appropriation action by Congress. These occur in two instances: (1) when authorized by law. amounts collected for materials or services are treated as reimbursements to appropriations and (2) in the three types of revolving funds (public enterprise. intragovernmental. and trust); collections are netted against spending. and outlays are reported as the net amount. Offsetting receipts in receipt accounts cannot be used without being appropriated. They are subdivided into two categories: (1) proprietary receipts-these collections are from the public and they are offset against outlays by agency and by function. and (2) intragovernmental fundsthese are payments into receipt accounts from Governmental appropriation or funds accounts. They finance operations within and between Government agencies and are credited with collections from other Government accounts. The transactions may be intrabudgetary when the payment and receipt both occur within the budget or from receipts from off-budget Federal entities in those cases where payment is made by a Federal entity whose budget authority and outlays are excluded from the budget totals. Intrabudgetary transactions are subdivided into three categories: (1) interfund transactions. where the payments are from one fund group (either Federal funds or trust funds) to a receipt account in the other fund group; (2) Federal intrafund transactions. where the payments and receipts both occur within the Federal fund group; and (3) trust intrafund transactions. where the payments and receipts both occur within the trust fund group. Offsetting receipts are generally deducted from budget authority and outlays by function. by subfunction. or by agency. There are four types of receipts. however. that are deducted from budget totals as undistributed offsetting receipts. They are: (1) agencies' payments (including payments by off-budget Federal entities) as employers into employees retirement funds. (2) interest received by trust funds, (3) rents and royalties on the Outer Continental Shelf lands, and (4) other interest (i.e .. interest collected on Outer Continental Shelf money in deposit funds when such money is transferred into the budget). 4. Processing The data on payments and collections are reported by account symbol into the central accounting system. In turn. the data are extracted from this system for use in the preparation of the MTS. There are two major checks which are conducted to assure the consistency of the data reported: 1. Verification of payment data. The monthly payment activity reported by Federal entities on their Statements of Transactions is compared to the payment activity of Federal entities as reported by disbursing officers. 2. Verification of collection data. Reported collections appearing on Statements of Transactions are compared to deposits as reported by Federal Reserve banks. 5. Other Sources of Information About Federal Government Financial Activities • A Glossary of Terms Used in the Federal Budget Process. January 1993 (Available from the U.S. General Accounting Office. P.O. Box 6015. Gaithersburg. Md. 20877). This glossary provides a basic reference document of standardized definitions of terms used by the Federal Government in the budgetmaking process. • Daily Treasury Statement (Available from GPO. Washington. D.C. 20402. on a subscription basis only). The Daily Treasury Statement is published each working day of the Federal Government and provides data on the cash and debt operations of the Treasury. • Monthly Statement of the PubliC Debt of the United States (Available from GPO. Washington. D.C. 20402 on a subscription basis only). This publication provides detailed information concerning the public debt. • Treasury Bulletin (Available from GPO. Washington. D.C. 20402. by subscription or single copy). Quarterly. Contains a mix of narrative. tables, and charts on Treasury issues. Federal finanCial operations. international statistiCS. and special reports. • Budget of the United States Government. Fiscal Year 19 _ (Available from GPO. Washington. D.C. 20402). This publication is a Single volume which provides budget information and contains: -Appendix. The Budget of the United States Government. FY 19_ -The United States Budget in Brief, FY 19 _ -Special Analyses -Historical Tables -Management of the United States Government -Major Policy Initiatives 3. Notes on Outlays Outlays are generally accounted for on the baSIS of checks issued, electronic funds transferred. or cash payments made. Certain outlays do not require Issuance of cash or checks. An example IS charges made against appropnatlons for that part of employees salaries Withheld for taxes or savings bond allotments - these are counted as payments to • United States Government Annual Report and Appendix (Available from Financial Management Service. U.S. Department of the Treasury, Washington, D.C. 20227). This annual report represents budgetary results at the summary level. The appendix presents the individual receipt and appropriation accounts at the detail level. 30 Scheduled Release The release date for the January 1996 Statement will be 2:00 pm EST February 22, 1996. For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 (202) 512-1800. The subscription price is $35.00 per year (domestic), $43.75 per year (foreign). No single copies are sold. The Monthly Treasury Statement is now available on the Department of Commerce's Economic Bulletin Board. For information call (202)482-1986. DEPARTMENT OF THE TREASURY NEWS TREASURY FOR RELEASE AT 2:30 P.M. January 30, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series of Treasury bills totaling approximately $32,400 million, to be issued February 8, 1996. This offering will provide about $4,550 million of new cash for the Treasury, as the maturing weekly bills are outstanding in the amount of $27,849 million. In addition to the maturing 13-week and 26-week bills, there are $17,455 million of maturing 52-week bills. The disposition of this latter amount was announced last week. Federal Reserve Banks hold $11,948 million of bills for their own accounts in the three maturing issues. These may be refunded at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $3,885 million of the three maturing issues as agents for foreign and international monetary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Foreign and international monetary authorities are considered to hold $3,475 million of the 13-week and 26-week issues. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-841 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED FEBRUARY 8, 1996 January 30, 1996 Offering Amount . $16,200 million $16,200 million Description of Offering: Term and type of security CUSIP number Auction date Issue date Maturity date Original issue date Currently outstanding Minimum bid amount Multiples . 91-day bill 912794 Y6 5 February 5, 1996 February 8, 1996 May 9, 1996 November 9, 1995 $14,695 million $10,000 $ 1,000 182-day bill 912794 3C 6 February 5, 1996 February 8, 1996 August 8, 1996 February 8, 1996 $10,000 $ 1,000 The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date DEPARTMENT OF THE TREASURY TREASURY(~'NE'W S 1789 _ _ OFFlCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 FOR IMMEDIATE RELEASE January 31, 1996 CONTACT: Calvin A. Mitchell (202) 622-2920 VETERANS AFFAIRS SECRETARY JESSE BROWN TO OPEN TREASURY'S BLACK HISTORY MONTH CELEBRATION Treasury Secretary Robert E. Rubin will welcome Veterans Affairs Secretary Jesse Brown to the Cash Room of the Department of the Treasury on February 1,1996, at 11:00 a.m., as the keynote speaker in the opening program of the Department's 1996 Black History Celebration. Secretary Brown will speak about the achievements of many unsung African-Americans throughout the history of our Nation and the opportunities and possibilities ahead as the Nation approaches the next century. Secretary Rubin will make remarks and introduce Secretary Brown. The program at the Treasury Department will also include songs by the Cardozo High School Choir and presentations of Commemorative Medals honoring African-Americans. Media without Treasury, White House, State, Defense or Congressional credentials wishing to attend should contact the Office of Public Affairs at (202) 622-2960, with the following information: name, Social Security number and date of birth, by 6 p.m. Wednesday, January 31, for Thursday's event. This information can be faxed to (202) 622-1999. -30RR-842 (Revised Copy) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT OF THE TREASURY , TREASURY OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 FOR IMMEDIATE RELEASE January 31, 1996 REMARKS BY DARCY BRADBURY ASSISTANT SECRETARY FOR FINANCIAL MARKETS TREASURY QUARTERLY REFUNDING PRESS CONFERENCE Good afternoon. Today we are announcing the terms of the regular Treasury February midquarter refunding. I will also discuss Treasury financing requirements for the balance of the current calendar quarter and our estimated cash needs for the April-June quarter. 1. We are offering $44.5 billion of notes and bonds to refund $31.3 billion of privately held notes and bonds maturing on February 15 and to raise approximately $13.2 billion new cash. The three securities are: First, a 3-year note in the amount of $18.5 billion, maturing on February 15, 1999. This note is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on Tuesday, February 6, 1996. The minimum purchase amount will be $5,000 and purchases above $5,000 may be made in multiples of $1,000. Second, a 10-year note in the amount of $14.0 billion, maturing on February 15, 2006. This note is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on Wednesday, February 7. The minimum purchase amount will be $1,000. Third, a 30-year bond in the amount of $12.0 billion, maturing on February 15, 2026. This bond is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on Thursday, February 8. The minimum purchase amount will be $1,000. 2. We are also offering $8.0 billion of cash management bills to be issued February 15. These bills will mature on February 22, 1996. The cash management bills are scheduled to be auctioned on a discount basis at 11:30 a.m. Eastern time on Thursday, February 8, 1996. The minimum purchase amount will be $10,000. -MORERR-843 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 3. Due to the Treasury's need to avoid exceeding the debt limit, none of the securities that I am announcing today will be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. Maturing notes held by Federal Reserve Banks as agents for such accounts may be rolled over on a noncompetitive basis within the public offering amounts of the notes and bonds. 4. As announced on Monday, January 29, 1996, we estimate a net market borrowing need of $85.3 billion for the January-March quarter. The estimate assumes a $20 billion cash balance at the end of March. Including the securities in this refunding, we have raised $26.8 billion of cash from the sale of marketable securities. This was accomplished as follows: raised $0.8 billion from the 2-year notes that settled January 2 and today; raised $15.8 billion from the 5-year notes that settled January 2 and January 31 ; raised $2.9 billion from the 52-week bills with settlement dates of January 11 and February 8; raised $9.6 billion in cash in the regular weekly bills including those announced yesterday; paid down $7.4 billion in the 7-year note that matured January 15; paid down $8.1 billion in the cash management bills that matured January 25; and raised $13.2 billion from the notes and bonds that I am announcing today. 5. The Treasury will need to raise $58.5 billion in market borrowing during the rest of the January-March quarter. This financing can be accomplished through regular sales of 13-, 26-, and 52-week bills in February and March and 2-year and 5-year notes in February. Additional cash management bills will be needed to cover the low points in the cash balance in early March. Since the cash management bill being announced today will mature February 22, it will not effect the total borrowing need for the quarter. These estimates do not include cash from the March two and five-year notes to be issued April 1, 1996. 6. We estimate Treasury net market borrowing to be in a range of $0 to $5 billion for the April-June 1996 quarter, assuming a $35 billion cash balance on June 30. These estimates do not include cash from the June two and five-year notes to be issued July 1, 1996. 7. The tentative auction calendars for February, March and April 1996 are included in the chart package which was distributed today. 8. The May midquarter refunding press conference is scheduled to be held on Wednesday, May 1, 1996. -30- o federal financing WASHINGTON, D.C 20220 bonkNEWS January 31, 1996 FEDERAL FINANCING BANK Charles D. Haworth, secretary, Federal Financing Bank (FFB), announced the following activity for the month of December 1995. FFB holdings of obligations issued, sold or guaranteed by other Federal agencies totaled $78.7 billion on December 31, 1995, posting a decrease of $3,011.9 million from the level on November 30, 1995. This net change was the result of a decrease in holdings of agency debt of $2,997.3 million, and in holdings of agency guaranteed loans of $14.6 million. FFB made 12 disbursements during the month of December, and executed 45 maturity extensions of GSA loans for federal buildings. FFB also received 11 prepayments in December. Attached to this release are tables presenting FFB December loan activity and FFB holdings as of December 31, 1995. RR-844 CD 0 C';J .,,C';J Ol (\J (\J Lf) (\J (\J CD c\J 9 (\J (/) (\J (/) ell 0.. LL LL o ~ (\J 0 Page 2 of FEDERAL FINANCING BANK DECEMBER 1995 ACTIVITY BORFOWER DATE AMOUNT OF ADVANCE FINAL MATURITY INTEREST RATE AGENCY DEBT RESOLUTION TRUST CORPORATION Note 29 /Advance #1 12/15 $10,471,000,000.00 4/1/96 5.545% S/A 9/5/23 12/11/95 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 6.210% 5.627% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% GOVERNMENT - GUARANTEED LOANS GENERAL SERVICES ADMINISTRATION Oakland Office Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services *Foley Services Building Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract Contract 12/1 12/8 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 $93,008.92 $506,381.01 $250,546.40 $418,280.66 $148,215.84 $429,180.35 $280,020.21 $263,333.02 $176,579.94 $356,464.00 $393,865.52 $215,334.05 $335,674.90 $210,196.37 $469,215.55 $316,057.85 $187,038.98 $182,724.61 $177,160.18 $230,540.00 $314,007.92 $506,381.01 $2,560.36 $311,761.12 $203,069.10 $29,709.47 $252,246.00 S/A is a Semi-annual rate * maturity extension or interest rate reset S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A SJA S/A S/A S/A S/A S/A S/A S/A Page 3 of 4 FEDERAL FINANCING BANK DECEMBER 1995 ACTIVITY BORROWER DATE AMOUNT OF ADVANCE FINAL MATURITY INTEREST RATE GOVERNMENT - GUARANTEED LOANS GENERAL SERVICES ADMINISTRATION *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract *Foley Services Contract Chamblee Office Building Foley Square Courthouse Atlanta CDC Office Bldg. HCFA Headquarters HCFA Headquarters S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A S/A 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/11 12/15 12/15 12/18 12/18 12/26 $243,266.00 $184,695.00 $140,827.00 $358,024.00 $279,086.00 $69,677.00 $92,145.00 $200,919.00 $395,945.00 $243,604.00 $190,950.00 $240,786.00 $127,000.00 $219,361.00 $220,464.00 $103,889.00 $103,889.00 $117,929.00 $122,314.50 $113,621.37 $710.04 $548,972.00 $543,356.78 $710.23 $705.98 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 7/31/25 4/1/97 7/25/25 9/2/25 7/1/25 7/1/25 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 6.148% 5.478% 6.168% 6.176% 6.175% 6.144% 12/18 12/27 $8,197,419.08 $6,150,000.00 11/2/26 11/2/26 6.183% S/A 6.136% S/A 12/15 12/29 $2,057,000.00 $505,000.00 7/1/96 12/31/25 5.501% Qtr. 6.024% Qtr. GSA/PADC ICTC Building ICTC Building RURAL UTILITIES SERVICE Farmers Telephone #399 Sho-Me Power #382 S/A is a Semi-annual rate: Qtr. is a Quarterly rate extension or interest rate reset * maturity Page 4 of 4 FEDERAL FINANCING BANK (in millions) Program Agency Debt: Export-Import Bank Resolution Trust Corporation Tennessee Valley Authority U.S. Postal Service sub-total* Agency Assets: FmHA-ACIF FmHA-RDIF FmHA-RHIF DHHS-Health Maintenance org. DHIIS-Medical Facilities Rural utilities Service-CBO Small Business Administration sUb-total* Government-Guaranteed Loans: DOD-Foreign Military Sales DHUO-Community Dev. Block Grant DHUO-Public Housing Notes General Services Administration + DOl-Virgin Islands DON-Ship Lease Financing Rural utilities Service SBA-Small Business Investment Cos. SBA-State/Local Development Cos. DOT-Section 511 sUb-total* *figures may not total due to rounding +does not include capitalized interest FY '96 Net Change 10/1/95-12/31/95 December 31, 1995 November 30, 1995 $ 2,043.5 10,471.0 3,200.0 5,764.7 21,479.2 $ 2,506.3 11,505.5 3,200.0 1,470.0 3,675.0 21,015.0 8.1 23.8 4,598.9 0.1 30,790.9 1,470.0 3,675.0 21,015.0 8.1 23.8 4,598.9 30,790.9 0.0 0.0 0.0 0.0 0.0 0.0 2..t..Q 0.0 3,457.9 83.8 1,626.8 2,282.9 21. 0 1,432.1 17,144.4 2.5 346.1 3,470.8 84.9 1,626.8 2,282.4 21.0 1,432.1 17,141.9 3.0 349.0 14 .1 26,425.9 -12.9 -1.1 0.0 0.5 0.0 0.0 2.6 -0.5 -2.9 -0.2 -14 .6 ========!: =~==:::==== $ 81,693.2 $ -3,011.9 $ -5,615.9 1.L..2. 26,411.3 ========~ grand-total* Net Change 12/1/95-12/31/95 $ 78,681.4 :Z.~64.7 24,476.5 O.l, ----------------- $ -462.8 -1,034.5 0.0 -1.500,0 -2,997.3 $ -462.8 -2,737.6 0.0 -L500,Q -4,700.3 0.0 0.0 -685.0 0.0 0.0 0.0 .2..t.Q -685.0 -35.2 -5.3 -61. 7 16.0 0.0 0.0 -131.1 -3.0 -9.7 -0.6 -230.6 DEPARTMENT OF THE TREASURY NEWS TREASURY omCE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR RELEASE WHEN AUTHORIZED AT PRESS CONFERENCE January 31, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY FEBRUARY QUARTERLY FINANCING The Treasury will auction $18,500 million of 3-year notes, $14,000 million of 10-year notes, and $12,000 million of 3D-year bonds to refund $31,296 million of publicly-held securities maturing February 15, 1996, and to raise about $13,200 million new cash. The Treasury will also auction a 7-day cash management bill on February 8, 1996_ Details about the cash management bill are given in a separate announcement. I~ additicn to the public ho:dings, Federal Reserve B~nks $5,872 million of the maturing securities fer ~~eir ow~ accounts, which may be refunded by issuing additional amounts of ~he new securities. h0~Q The maturing securities held by the public include $1,665 million held by Federal Reserve Banks as agents for foreign and international monetary authorities. Due to the Treasurv's need to avoid exceeding the debt limit, no additional securities will be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. Maturing notes held by Federal Reserve Banks as agents for such accounts may be rolled over on a noncompetitive basis within the public offerina amounts. The 1D-year note and 30-year bond being offered today are eligible for the STRIPS program. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about the notes and bond are given in the attached offering highlights. ~-845 000 Attachment Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC FEBRUARY 1996 QUARTERLY FINANCING January 31, 1996 Offrrlnrl Amount $18,500 million $14,000 million $12,000 mi II ion 3-year notes 14-1999 912827 147 3 February 6, 1996 February 15, 1996 February 15, 1996 February 15, 1999 Determined based on the average of accepted competitive bids Determined at auction August 15 and February 15 10-year notes A-2006 912827 148 1 February 7, 1996 February 15, 1996 February 15, 1996 February 15, 2006 Determined based on the average of accepted competitive bids Determined at auction August 15 and February 15 30-year bonds Bonds of February 2026 912810 EW 4 February 8, 1996 February 15, 1996 February 15, 1996 February 15, 2026 Determined bused on the avcrugc of accepted competitive bids Determined at auction August 15 and February 15 $5,000 $1,000 None $1,000 $1,000 None $1,000 $1,000 None Determined at auction Determined at auction Determined at auction Not applicable Not appl i cabl e Not appl i cabl e Determined ut auction 912820 BR 7 Not appl i cabl e Determined at auction 912803 BG 7 February 15, 2026 -- 912833 LY 4 DescriptlOn of Offering: Term und type of security Series CUSIP number Auction dute Issue date Dated dute Maturity date Interest rate Yield Interest payment dates Minimum bid umount Multiples Accrued interest payable by investor Premium or dlscount STRIPS Information: Minimum amount required Corpus CUSIP number Due dutes and CUSIP numbers for additional TINTs The followinq rules apply to all securlties mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Maximum at a Maximum Receipt Recognized Bid Single Yield Award . . • . . of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . . . . . Accepted in full up to $5,000,000 at the average yield of accepted competitive bids. (1) Must be expressed as a yield with three decimals, e.g., 7.160%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all yields, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. 35% of public offering 35% of public offering Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date DEPARTMENT OF THE TREASURY NEWS TREASURY ~j/78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .............................. OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960 FOR RELEASE WHEN AUTHORIZED AT PRESS CONFERENCE January 31, 1996 CONTACT: Office of Financing ::>02/219-3350 TREASURY TO AUCTION CASH MANAGEMENT BILLS The Treasury will auccion approximately $8,000 million of 7-day Treasury cash management bills to be issued February 15, 1996. Competitive and noncompetitive tenders will be recei7ed at all Federal Reserve Ba~ks and Bra~ches. Tenders will not be accept'ed fcr .cills to be ;;,air~tained or~ the book-entry records of the Department of the Treasury ~TREASURY DIRECT). Tenders will net be received at the E~r2au of the Public Debt. Washingt0D, D.C. Tenders for the bills will not be accepted from Federal Reserye Banks for foreign and international monetary authorities. This offering of Treasury securities is governed by the terms and conditions set fort~ in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about the new security are given attached offering highlights. ~n the 000 Attachment RR-846 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERING OF 7-DAY CASH MANAGEMENT BILL 1996 Offerina Amount Description of Offerina: -=-~~m a:;,.~ -=T';S=~ c: ,:~e sec~ri:~/ r..~~.c,er i;.'~c~~~n ~:'279..J: 8.a.~e ~er: :ss-"':c Gate r<a. t t.:y i c..a.:. ~ +:"1. C~~g~~al iss~e Curre~~ly d3~e Februa~y :~, 199-5 1996 Fe~r~ary 2~, 1996 .~'J.srJ.st 24, e~~sta~d~~g $lC',C'OO M~lci~les S:,COJ $IC,OOO S:,COC ~e~d 1995 mi::"lion S2";,/38 bid a8~~~~ rvI'-11 ~ i.::; l e.s M~~i~~m to held a~e~~= ~~~~rum ~c X:: 3 r:..:a:-:-·v''' 8, Submission of Bids: ~oncomDeei=ive ~~is in average Acee~ted t~e ::·:);r~petiti~le ( ... ) f~:l ~~ :~ $1,000,000 at disco~~= rate of accepted bis.s ~~st te exoressed as a disceunt witt ewe deoi~als, e.g., 7.10%. te reoorted wte~ .~i"":; . . . _ '- '-"~f""'''~c. ... _ ............ l.... at all the ~et , leng c~e ~ate of the total rates, is $2 cillion or su~ d~scounc pos~t~cn grea=e~. (3) Ke= leng position m~st be determined as of o~e talf-tour ~rior to tte clesing tine for reeeiot of competit:' "~~e te:--ld2~s. Maximum RQcognized Bid at a Single Yield -- . o:re:C:":l.g c: Maximu:n Award ~~Jblic Receipt of Tenders: ~e~cc~petitive te~ders 0. ••1"'" Ll • en a~ction day ~r~c~ ce 11:30 a.~. ~astern Sta~dard ~as~ern Standard ~~~e Paymen t Te:=-ms ?'''':'=-~ t~ a paf~e:--. . ~ "w·:.t~ t-=:-_de~ oy by C:~3.~3e f~nds ac=c~~~ a~ a Federal Rese~~e ;a~k en iss~e date DEPARTMENT OF THE TREASURY NEWS TREASURY OFFICE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA A . N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE January 31, 1996 REMARKS BY DARCY BRADBURY ASSISTANT SECRETARY FOR FINANCIAL MARKETS TREASURY QUARTERLY REFUNDING PRESS CONFERENCE Good afternoon. Today we are announcing the terms of the regular Treasury February midquarter refunding. I will also discuss Treasury financing requirements for the balance of the current calendar quarter and our estimated cash needs for the April-June quarter. l. We are offering $44.5 billion of notes and bonds to refund $3l.3 billion of privately held notes and bonds maturing on February 15 and to raise approximately $13.2 billion new cash. The three securities are: First, a 3-year note in the amount of $18.5 billion, maturing on February 15, 1999. This note is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on Tuesday, February 6, 1996. The minimum purchase amount will be $5,000 and purchases above $5,000 may be made in multiples of $1,000. Second, a 10-year note in the amount of $14.0 billion, maturing on February 15, 2006. This note is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on Wednesday, February 7. The minimum purchase amount will be $1,000. Third, a 30-year bond in the amount of $12.0 billion, maturing on February 15,2026. This bond is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on Thursday, February 8. The minimum purchase amount will be $1,000. 2. We are also offering $8.0 billion of cash management bills to be issued February 15. These bills will mature on February 22, 1996. The cash management bills are scheduled to be auctioned on a discount basis at 11 :30 a.m. Eastern time on Thursday, February 8, 1996. The minimum purchase amount will be $10,000. -MORE- RR-843 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 3. Due to the Treasury's need to avoid exceeding the debt limit, none of the securities that I am announcing today will be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. Maturing notes held by Federal Reserve Banks as agents for such accounts may be rolled over on a noncompetitive basis within the public offering amounts of the notes and bonds. As announced on Monday, January 29, 1996, we estimate a net market borrowing need of $85.3 billion for the January-March quarter. The estimate assumes a $20 billion cash balance at the end of March. Including the securities in this refunding, we have raised $26.8 billion of cash from the sale of marketable securities. This was accomplished as follows: 4. raised $0.8 billion from the 2-year notes that settled January 2 and today; raised $15.8 billion from the 5-year notes that settled January 2 and January 31 ; raised $2.9 billion from the 52-week bills with settlement dates of January 11 and February 8; raised $9.6 billion in cash in the regular weekly bills including those announced yesterday; paid down $7.4 billion in the 7-year note that matured January 15; paid down $8.1 billion in the cash management bills that matured January 25; and raised $13.2 billion from the notes and bonds that I am announcing today. 5. The Treasury will need to raise $58.5 billion in market borrowing during the rest of the January-March quarter. This financing can be accomplished through regular sales of 13-, 26-, and 52-week bills in February and March and 2-year and 5-year notes in February. Additional cash management bills will be needed to cover the low points in the cash balance in early March. Since the cash management bill being announced today will mature February 22, it will not effect the total borrowing need for the quarter. These estimates do not include cash from the March two and five-year notes to be issued April 1, 1996. 6. We estimate Treasury net market borrowing to be in a range of $0 to $5 billion for the April-June 1996 quarter, assuming a $35 billion cash balance on June 30. These estimates do not include cash from the June two and five-year notes to be issued July 1, 1996. 7. The tentative auction calendars for February, March and April 1996 are included in the chart package which was distributed today. 8. The May midquarter refunding press conference is scheduled to be held on Wednesday, May 1, 1996. -30- DEPARTMENT TREASURY OF THE TREASURY NEWS ~&~9. . . . . . . . . . . . . . . .. ................ OFFICE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR RELEASE WHEN AUTHORIZED AT PRESS CONFERENCE January 31, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY FEBRUARY QUARTERLY FINANCING The Treasury will auction $18,500 million of 3-year notes, $14,000 million of 10-year notes, and $12,000 million of 30-year bonds to refund $31,296 million of publicly-held securities maturing February 15, 1996, and to raise about $13,200 million new cash. The Treasury will also auction a 7-day cash management bill on February 8, 1996. Details about the cash management bill are given in a separate announcement. In additicn to the public holdi~gs, Federal Reserve B2nks r.:.uJ.Q $5,87: million of the matu.ring securities fer ':heir m~ accounts, which may be refunded by issuing additional amounts of the new securities. T~e maturing securities held by the public include $1,665 million held by Federal Reserve Banks as agents for foreign and international monetary authorities. Due to the Treasurv's need to avoid exceeding the debt limit, no additional securities will be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. Maturing notes held by Federal Reserve Banks as agents for such accounts may be rolled over on a noncomDetitive basis within the public offerina amounts. The 10-year note and 30-year bond being offered today are eligible for the STRIPS program. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about the notes and bond are given in the attached offering highlights. ~-845 000 Attachment For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFtRINGS TO THE PUBLIC FEBRUARY 1996 QUARTERLY FINANCING January 31, 1996 Offer..!.!I~L~ounl $18,500 million $14,000 million $12,000 million 3-year notes W-1999 912827 W7 3 February 6, 1996 February 15, 1996 February 15, 1996 February 15, 1999 Determined based on the average of accepted competitive bids Determined at auction August 15 and February 15 10-year notes A-2006 912827 w8 1 February 7, 1996 February 15, 1996 February 15, 1996 February 15, 2006 Determined based on the average of accepted competitive bids Determined at auction August 15 and February 15 30-year bonds Bonds of Februury 2026 912810 EW 4 February 8, 1996 Februury 15, 1996 February 15, 1996 February 15, 2026 Determined based on the averuge of accepted competitive bids Determined at auction August 15 and February 15 $5,000 $1,000 None $1,000 $1,000 None $1,000 $1,000 None Determined at auction Determined at auction Determined at auction Not appl icable Not applicilble Not appl i cabl e Determined at auction 912820 BR 7 Not applicable Determined at auction 912803 BG 7 February 15, 2026 -- 912833 LY 4 DescriQt ion of Offering: Term and type of security Series CUSIP number Auction date Issue dilte Dated dute Maturity dute Interest rate Yield Interest payment dates Minimum bid amount Multiples Accrued interest payable by investor Premium or dIscount STRIPS Information: Minimum amount required Corpus CUSIP numher Due dates and CUSIP numbers for additional TINTs The followiD9 rules apply to all securItIes mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Maximum at a Maximum Receipt Recognized Bid Single Yield Award _ . . . . of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . . . . . Accepted in full up to $5,000,000 at the average yield of accepted competitive bids_ (1) Must be expressed as a yield with three decimals, e.g., 7.160%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all yields, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. 35% of public offering 35% of public offering Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date DEPARTMENT OF THE TREASURY NEWS TREASURY OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 : . , J- FOR RELEASE WHEN AUTHORIZED AT PRESS CONFERENCE January 31, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY TO AUCTION CASH MANAGEMENT BILLS The Treasury will auction approximately $8,000 million of 7-day Treasury cash management bills to be issued February 15, 1996_ Competitive and noncompetitive tenders will be recei7ed at all Fede~al Rese~ve Banks and Bra~c~es. Tenders will not be accepted fcr tills to be ~ai~tained on the book-entry records of the Department of the Treasury (TREASURY DIRECT). Tenders will net ce received a~ the B~r2au of the Public Debt, Washingt0n, D.C. Tenders for the bills will not be accepted from Federal Reserye Banks for foreign and internatienal monetary authorities. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to ~he public of marketable Treasury bills, notes, and bonds. Details about the new security are given in the attached offering highlights. 000 Attachment RR-846 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGETS OF TREASURY OFFERING OF 7-DAY CASH MANAGEMENT BILL Jan~ary Offerina Amount . 1996 53,00] r..il2.icn Description of Offering: T~~r:1 2..~.. c: :'iT>e eJf sec~'-lr:' :Y" .L..Cc::lon daLe :::ss"":e date f'.iat1..lrity date Cr~ginal issce date 7-day Cash Management 9:2 7 94 X3 3 Fet,Y:.::.ary 8, E~ll 1996 bid amcunt Mulci;;les Mln~~um to hold amo~n:: Multi~~es to held 2.5, 1996 February 22, 1996 .Zl..ug~st 24, 199= 524,738 million 510,000 $1,000 $10,000 $1,000 Submission of Bids: bids ~ccepted C~rrently 31, Fe~ruary c~tstand~ng ~~n~~cffi NGncc~~etitive In fu~~ u;; to $1,000,000 at average discount rate of accepted c0n:1petitive :Sid:::~ust be expressed as a discount rate with two dec~~a~s, e.g., 7.10%. Net long position for each bidder must be reported when the su~ of the total tld amount, at all discount rates, and the net leng pos~t~on is $2 billion or creater. Net leng position must be determined as of one half-hour Drior to the clesing time for receiPt of competit~e Compe::lti"ve bids (1) (2) (3) t.':" "\"e te:1cers. Maximum Recognized Sid at a Sinale Yield Maximum Award . Receipt of Tenders: Nonc=rrpe::ltlve tenders Payment Terms 35% of ~ - e ~-~ ~ 0 0: ~;,...-..:,.-..,............ _'_'' __ ' ' . pu.c~2.C c:::re:-i:1g public o:feyi::g ~"-_ ....... .l.. ...... a.m . :::astern Standard time on auctien day Pri=r te 11:30 a.m. :::astern Standard tlme on auctien day ,""' "'"' -...IV ='..1:"1 pay-:nen:: wi tr.. te:-.der or bv charge to a funds accocnt at a Federal ~eserve Sank en ~ssue date REPORT TO THE SECRETARYOF THE TREASURY I :~"" "" FROM THE TREASURY BORROWING ADVISORY COMMITTEE OF''rllE ruBLIC SECURITIES ASSOCIATION .... < 1 we ' 1..-' iJ I.)' .:' 1 JANUARif:fl,l996 Dear Mr. Secretary: At the outset of this report, the Committee would again urge in its most forceful terms that legislative action to increase the statutory debt limit be taken promptly. In the Committee's judgment, raising the specter of default by failure to act on the debt limit as a means to support the political agenda of any constituency is inappropriate and counterproductive. Since the Committee's last meeting in November 1995, the Secretary has taken a series of extraordinary actions to enable the Treasury to borrow the funds needed to meet the financial obligations of the Federal Government in a timely manner. These necessary measures were taken in the absence of an increase in the debt limit. Further, the Secretary has recently unveiled additional measures, if needed, to enable the Treasury to finance Government operations until February 29 or March 1. Thus, in the absence of action to increase the debt limit, the fmancial markets will once again confront the uncertainty and risk of the Treasury's inability to fulfill all of its financial obligations. In our last report, dated November 1, 1995, the Committee addressed these risks, uncertainties and potential effects of default. It is our strong and unanimous view that there should never be any reason for the financial integrity of the United States Government to be questioned or doubted. Our Nation's creditworthiness is a precious asset which benefits all of us; it should not be bargained or compromised. * * * * * Also, since the Committee's last meeting in November 1995, the economy has continued to expand although at a somewhat slower pace than the third quarter. Inflationary pressures have remained generally subdued. As a result of some improvement in inflationary prospects, monetary policy was eased slightly in December. Yields on Treasury securities extended the decline begun early last year. Short and intermediate-term rates declined 40 - 60 basis points, reflecting market perceptions of somewhat slower economic growth as well as the Fed's modest easing step. Currently, yield levels for short and intermediate maturities anticipate further easing moves by the monetary authorities. Yields for 30-year bonds fell about 25 basis points as the yield curve steepened. The more limited yield decline for longer-term securities reflected the cyclical nature of slower economic growth, as well as some disappointment on the inability to reach agreement on balancing the budget in seven years. Within this context, to refund the $31.3 billion of privately-held notes maturing on February 15, 1996 and to raise $21.2 billion of cash, the Committee recommends that the Treasury auction $52.5 billion of the following securities: • $IS.5 billion 3-year notes due February 15, 1999; • $14.0 billion 100year notes due February 15,2006; • $12.0 billion 30-year bonds due February 15, 2026; and, • $S.O billion cash management bills due February 29, 1996. The 16 Committee members present for the meeting were unanimous in their support of the composition of the refunding package. In considering whether to recommend issuing a new lO-year note or reopening the 57/S percent notes due November 15,2005, Committee members observed that though- the outstanding issue has recently been in short supply in the repurchase agreement market, there was no compelling evidence that the shortage was unusual. It seems likely that the shortage should be alleviated once a new 100year note is auctioned. On this basis, the Committee voted 15 to 1 in favor of a new issue. The Committee also considered whether to recommend issuing a new 30-year bond or reopening the 67/S percent bonds due August 15,2025. Generally, Committee members remain supportive of bond reopenings for the purpose of enhancing liquidity, particularly in view of the diminished level of activity in the secondary market for Treasury bonds which has occurred since the Treasury's reduced issuance in this maturity sector. However, the 11 point premium of the current 30-year bond, was viewed as a significant impediment to On this basis, the Committee voted broad-based investor interest in a reopening. unanimously in favor of a new 30-year bond. With the aim of achieving a cash balance of $20 billion on March 31, the Committee unanimously recommends that for the remainder of the quarter, the Treasury meet its borrowing requirement in the following manner: 2 • One 5-year note totaling $12.5 billion, to raise $4.1 billion of new cash; • One 2-year note totaling S18.75 billion, to raise SO.3 billion of new cash; • One I-year bill totaling S19.25 billion, to raise $1.9 billion of new cash; • Weeldy issuance of 3- and 6-month bills through the remainder of the quarter, to raise S20.8 billion of new cash; and • Cash management bills totaling $36.0billion to mature in late April to refund the cash management bills which mature on February 29 as well as to meet the seasonal cash need in early March. Including the S21.2billion raised in the mid-quarter refunding, the proJX>sed financing schedule will raise a total of $76.3 billion. This amount, when added to the $9.0 billion already raised or announced in the quarter, will accomplish the total net borrowing requirement of $85.3 billion. In considering the Treasury 's financing comJX>sition for the remainder of the January to March quarter, the Committee noted an abnormally large amount of uncertainty with respect to the timing of Federal expenditures. It is JX>ssible that the Treasury 's borrowing requirement in the current quarter will be less than the estimated S85.3 billion. In this circumstance, the Committee feels that heavy reliance on cash management bills with late April maturities will afford the Treasury maximum flexibility. For the April-June quarter, the Treasury estimates a net borrowing requirement in the range of $0 - 5 billion with a cash balance of $35 billion at the end of June. To accomplish the anticipated net borrowing requirement, the Committee recommends the provisional financing schedule attached to this report. In developing its financing recommendations, the Committee was mindful that the cash raising potential of the 5-year note has been substantially diminished. For this reason, and consistent with our last report, the Committee recommends modest increases in all coupon cycle offerings each quarter during 1996. However, even with modest and steady increases in the size of coupon issues this year, more than 50 percent of the Treasury 's net market borrowing requirement will be achieved through the issuance of Treasury bills. This increased concentration of short-term financing, if continued, will ultimately become worrisome to investors. Thus, the Committee continues to advocate a debt management policy which avoids undue reliance on short-term fmancing and arrests the decline in the average length of the debt. Specifically, and as outlined in our last report, the Committee again recommends more frequent issuance of longer dated securities. 3 In response to a request for its views, the Committee considered the Treasury 's role in overseeing and coordinating the scheduling of securities issues by Government sponsored agencies. However useful and necessary such a role might have been in the early stages of development of the Agency securities market, the Committee members generally felt that such a role was no longer needed at least insofar as the stability of the Treasury and Federal Agency securities markets was concerned. Moreover, with the advent of new financing techniques, including the development of medium-tenn note programs, there is some evidence that the requirements for prior review are contributing to inefficiencies, including artificial distortions of issue sizes. Finally, such a review process might be mistakenly viewed as connoting Treasury approval of the structural features of the debt being issued, the adequacy of infonnation being provided to investors, or even the credit standing of the issuer. Accordingly, the Committee felt that the Treasury should consider procedural steps it might take, within the framework of the existing law, to streamline the process and minimize the Treasury's role as a reviewer. Respectfully submitted, / ({"c(c~.;.(~/Lc( Richard M. Kelly Chairman ) &timated Treasury Marketable Borrowing (billions of dollars) April - June 1996 Amount Malu M & Treasy~ Amount Orr~~d Foreign Add-2DS Cash Raised bills Regular weekly bills $354.6 374.1 $19.5 17.6 18.0 18.6 19.3 19.75 19.75 19.75 19.75 2.15 1.75 1.15 .45 ~ - -- :1QJ2 464.1 453.1 -11.0 March 2-year March 5-year 17.6 8.0 19.25 13.0 April 7-year 7.8 April 2-year April 5-year 18.0 8.6 52-week bills April 4 May 2 May 30 June 27 Cash management bills· Total bills Treasyo: ~y~ns May 3-year May 10-year Refunding subtotal 1.0 0.3 2.65 5.3 -7.8 19.25 13.0 1.0 0.3 2.25 4.7 19.0 0.2 35.0 34.0 1.0 Q,l 1.2 UJl May 2-year May 5-year 18.2 19.25 1.0 2.05 ~ .llQ Q..l ~ Total coupons 122.4 130.8 5.1 13.5 $586.5 583.9 5.1 $2.5 Total borrowing *Assumea that $36.0billioo of cash management bills will be issued in late February - early March and mature in late April. Also intra-quarter cash management bills will be needed to cover cash low points during the quarter. MINUTES OP THB MEETING OP tHB TREASURY BORRO'.I~G ADVISORY COMMITTEB OP THB PUBLIC SICUR-ITISB\j~~O<;IATION January 30 and 31, 1996 January 30 The Committee convened at 11:40 a.m. at the Treasury for the portion of the meeting that was open to the publ1C. All members were present, except Mr. Kessenich and Mr. McKnew. The Federal Register announcement of the meeting and a list of Committee members are attached. Depa~tment Assistant Secretary for Financial Markets Bradbury welcomed the Committee and the public to the meeting. Assistant Secretary for Economic Policy Gotbaum summarized the current state of the U.S. economy. Jill Ouseley, Director, Office of Market Finance discussed charts, which had been released to the public on ' January 29, updating Treasury borrowing estimates and providing statistical information on recent Treasury borrowing and market interest rates. The public meeting ended at 12:10 p.m. Debt limit The Committee reconvened in closed session at the Madison Hotel at 2:10 p.m. The members were present who had attended the public briefing. Assistant Secretary Bradbury gave the Committee its Charge, which is also attached. The Committee began by agreeing by consensus to open its report to the Secretary with an apolitical statement of its concern that the statutory debt limit should be increased in order to prevent a default on the Government's obligations. February refunding The Committee then discussed an overall approach to funding for the January-March and April-June quarters, displayed in the attached draft proformas, which were prepared by one of the Committee members using the Treasury market borrowing estimates that were released by the Treasury on January 29. The Committee voted unanimously to recommend a February midquarter refunding consisting of offerings to the public of $18.5 billion of 3-year notes, $14.0 billion of 10-year notes, $12.0 billion of 30-year bonds to raise a total of $13.2 billion of cash in the refunding. Each of the amounts of the notes and bonds is $0.5 billion above amounts offered in the most recent sale of each maturity. The Committee voted by 15-1 to recommend a new 10-year note and unanimously to recommend a new 30-year bond, as opposed to reopening outstanding securities. The Committee 2 also voted unanimously to recommend issuing $8 billion of cash management bills (CMBs) maturing on February 29, 1996. For the rest of the January-March quarter, the Committee consensus was to raise each of the notes and 52-week bills by $0.5 billion and finance the remainder of the borrowing need in bills, especially CMBs with April maturities. The Committee agreed by consensus to recommend a financing plan for the April-June quarter, which includes a $0.5 billion increase in each of the notes, except for a $1.0 billion increase in the 10-year notes, and $0.5 billion increase in the 52-week bills, and paying down Treasury bills, on balance. Scheduling Government-sponsored enterprise market entry In reply to the question in the Charge, the Committee consensus was that the Treasury's traditional "traffic cop" role in scheduling GSEs' new issues does not make a significant contribution to the stability of either the Treasury market or the market for agency securities. The consensus was' that, while this Treasury function probably served a historical purpose, it is anachronistic in today's highly liquid capital markets and could be streamlined. The meeting adjourned at 3:40 p.m. 3 January 31 The Committee reconvened at 8:30 a.m. at the Treasury in closed session. All members were present, except Mr. Kessenich. The Chairman presented the Committee report (copy attached) to Under Secretary for Domestic Finance Hawke and Assistant secretary Bradbury. In response to questions, the Committee expanded on the discussion in the Committee report regarding Treasury approval of the timing of Government-sponsored enterprise sales of debt securities. Also, the Committee urged the Treasury to announce as soon as practical the borrowing strategy that it intends to pursue over the next several years. For example, whether the Treasury intends to increase the number of times securities are offered or to introduce alternative debt instruments. The meeting adjourned at 8:45 a.m. ~ ~ 11 K. Ouseley, ffice of Market Domestic Finance January 31, 1996 Attachments certified by: Richard Kelly, Cha'rman Treasury Borrowinq Advisory Committee of the Public Securities Association January 31, 1996 ce 572 Federal Register I Vol. 61. No.5 / Monday. January 8. 1996 I Notices present oral statements at the meeting. The public may present written statements to the committee at any time by providing 25 copies of the Assistant Executive Director for Aircraft Certification Procedures or by bringing the copies to him at the meeting. Arrangements may be made by contacting the person listed under the heading FOA FURTHER INFORMATlON CONTACT. Sign and oral interpretation can be made available at the meeting. as well as an assistive listening device. if requested 10 calendar days before the meeting. Issued in Wuhington. DC. on January 2. 1996. Elizabeth y ..... Acting Assistant Executive Director. Aviation Ru/"making Advisory Committee for Aircraft Certification Procedure.. [FR Doc. 9&-225 Flied 1-5-98; 8:45 IIL1MQ c:oo. amt .,~,s..- A~~"Ru~~"gA~~ • Statu. report from the FARlJAR Harmonization Working Group for Propeller·Driven Small Airplanea • Status Report from the FARlJAR Harmonization Working Group for Subsonic Transport Category Large Airplanes and Subsonic Turbojet Powered Airplanes • A discuulon of future meeting date I. activiti8l. and plans. • Adjourn Attendance is open to the interested public. but will be limited to the space available. The public must make arrangementl by January 17. 1996. to present oral statements at the meeting. The public may present written statementl to the committee at any time by providing 2S copi.. to the Executive Director. or by bringing the copi.. to him at the meeting. In addition. sign and on! interpretation can be mad.. available at the meeting. as well 8' AI assistive llstenin& device. if l'8q' Aed. 10 calendar days before the m' Jna. Arrangements may be made' j contacting the penon lister' .meier the headina Fa. AJImtIR!NFI' MAT10N COIfTACT:. laued In W."'ln.,..... .£. au Jauuy 2- CommltIIM ......ng on NoIee CerUtlcdon ....... Federal Aviation Administration (FAA). DOT. ACT1ON: Notice of meeting. 19118- AQ£NCY: Paa1L~ A&lUtunt BDcutr 0Izet:tt:ir for No. . , CMtifJaztbt r.r ~ AviaUon ~ SUIlWARY: The FAA is iuuins thia notice AdviMIry Com ,a.a to advise the public of a meetiq of the Federal Aviation Administratioa. Aviation Rulemaking Advisory Committee to dilCUM noUe O8I11Jlcatioa. issue&. DATES: The meeting will be held 011 January 24. 1998. at 9 LID. ArraDp f~ oral presentatiana by Januuy 17.1.... ADOAEau: The meetin& will be heW at the General Aviation Manufacturen Association. suite 801. 1400 K StJw' NW .• Washinston. DC 20005~ FOR FURTHER INFOAIIAT1ON CCIfT~ ,: Carolina Forrester. Federal Av .JCID Administration. Omce ofRu' MId.(ARM-2oe). 800 Indepeodl' A» Av..,.. SW .. WuhingtoD, DC 20' i. te~ (202) 267-9690; fax (%0' ,287~75. SUPPlEllENTAAY IMIOV A11CIC Punuaa to § 10(a)(2) of the F' .-al AdvUory Committee Act (P" h L 9Z-483; 5 U.s.c. App. notice: aereby giV8ll of. meeting of thf' •viation Rulem 4ld Advisory u- .mitt.. to be held OIl January 24 .996. at the General A viatioD .anulacturen Auod.a~ Suite 8' •• 1400 K Street NW., Wast- 4l0D, DC 20005. The apDda will inc' ,de: m. na • )ptDills Rem.rb ;tOmmitt8e .cim.l.nUtndcIB ~ StatullWport from the PARIJAJl Harmonl-tioa Helicopters Wcri:iDa Croup . . [FR Doc... A P\W t~ 1:45 am) -.u.CXY , . . . . . Privilege. The FAA is curre' .y evaluating whether furthf> ..banges may be warranted and the pc .ble impact of a more extensive crim: .... history check requirement. Attendance at tb lanu~"y 23.1996. meeting is open t me pu' lic but is limited to spac' .vailabla Members of the public ml' address th I committee only with tt written perl ussion of the chair. WID "should be ar IlDged in advanc~ . he chair may e .tertain public comm' .£ if. in its judgme It. doing so will' ,( disrupt the order! , progress of thf' ..eeting and will not' , unfair to S' , other person. Membel I of the public ,e welcome to present w: tten material (0 the committee at any tiJ Ie. Persons wishing to present stateml Ilt or obtain information should contaA : the Office of the Associate Administral Ir for Civil Aviation Security. 800 In< tpendence Avenue SW .• Washington. DC 20591. Telephoae 202-267-7451 lIIaed In WaahlJ18too. DC C I January 2. 19M. Karl sa.-. ~. Civil Aviation [FR Doc. ~227 \ 5ecUJ ty DivWon. Filed 1-s-9I ; 8:45 ami ...... cc. ........ DEPARTIENT OF THE TREASURY Depw ........ 0ftIcee; Debt ...........tAdwtecNy CommttMe; II ...... Notk:e is hereby given. pursuant to 5 App. § 10(a)(2). that a meetin& will be held at the U.S. Treuury Department. 15th and Penn.aylvan1a Avenue, NW.• WaahiqtoD. DC.. on January 30 and 3t. 1998. the followtna debt manapment advilory committee: Public Securiti.. Auodatioa. Tteuury BorrowtDe AdvborJ Committa& The apnda for the meetin& provid.b • tecbnica1 hacqround briefbaa by Treuury staff on January 30. followed by a cbup bJ the Sec::rNry of the n-ury or hit deefpMe that the committee d1acua puticular tau... and a workiac ....tOIL On Januuy 31. the c::ammitt8ewill ~t. writtm report of it. rw:ommendaticms. n. bedgtoUDd brietlDa by TnJamy ltd will be held .. 11:30 LID. EutIm time OIl Jmuuy 3e md will be opeD ~ U.S~c. ..-.:r. Fedlal A.tatfc:a. -_'Iff: Admhtiaa. . . . oar. Nota la hareby &I~ 01. ICMduW ......,. oItJ. AYiatimi Security Ad'ri8ory Svhmmmiu.. OIl Policy. ~ ad PubUa A.a·_ DATI: 'I'be ........ will be beJd JUI1IU7 23. 1998, to. to a.m. to 12 p.-. - AIJelM_ 'I'be meettna will be held iR Room 8C OIl the eighth floor. Fechnl A vtaIIaa A.dmmiIItndoa. 800' IndepeDdavw AftDue SW.• W~ DC 10Ht. tet.pbcm 2tD287-745t. .... S IT"", ~1DI: Punumt- to I8dioa. 10(8)(2) of the Federal AdYbary Cuu:aadtIee Ad. (PtIb. L ~ . 483; 5 U.s.c. App. It). IlOtfm la ...." glftD of. meetfDI oCtile A~C8 Secudty ~ SUbI".nmittw to ... held January 23. 1geI, fD Roca 8C ca the ef&bIh ~ F. . . . AYiadaa Adminiwtnttcw. 800 IaclepRldem Avenue SW., Wuh'Jllln'. DC. 1'1» aseoda for tM meettna wUl1Dclude· tM FiDal Raleca ~~ or tile public. na. ......tlIq I! I riODa OD January 30 ad the mmmittw, reportiIIc . . . . OIl January 31 will .... cia.! to the pubUc. ~ to 50 U.S.c. App. § 100d)•. Thia DOttce abaIl CDIIt1tuta .,. dIarmiDatioa. pum.m to the authmlt p*-l ta h..d.s of ~ by 5" Federal Register / Vol. 61, No.5 I Monday. January 8, 1996 / Notices U.S.c. App. § lOld) and vested in me by Treasury Department Order No. l01-{)5. that the closed portions of the meeting are concerned with information that is exempt from disclosure under 5 U.S.c. § 552b(c)(9)(A). The public interest requires that such meetings be closed to the public because the Treasury Department requires frank and full advice from representatives of the financial community prior to making its final decision on major financing operations. Historically. this advice has been offered by debt management advisory committees established by the several major segments of the financial community. When so utilized. such a committee is recognized to be an advisory committee under 5 U.S.c. App. § 3. Although the Treasury's final announcement of financing plans may not reflect the recommendations provided in reports of the advisory committee, premature disclosure of the committee's deliberations and reports would be likely to lead to significant financial speculation in the securities market. Thus. these meetings fall within the exemption covered by 5 U.S.c. § 552b(c)(9)(A). The Office of the Under Secretary for Domestic Finance is responsible for maintaining records of debt management advisory committee meetings and for providing annual reports setting forth a summary of committee activities and such other matters as may be informative to the pubUc consistent with the policy of 5 U.S.c. § 552b. Dated: December 28. 1995. Jolm D. Hawb. Jr.• Under Secretary. DomHtk Finance. [FR Doc. 9&-189 Filed 1-5-98: 8:45 amI IILUNCl COOl ..,....... Customs Servtce Papertess NoUflcatton Concerning the Recordation of Intllllec1Llel Property Rights InformatJonAGENCY: Custo,ms Service. Treuury. ACT1OH: General notice. 573 as of January 1. 1996. the IPR BraD J. in the Office of Regulations" Rulir will SU ....ARy: This notice advises the public paper circulars .d no longer issue that the Intellectual Property Rights directives concerning tradema' ~ and (IPR) Branch of Customs will no longer copyright recordations: the A .S/IPR notify Customs officers and the pubUc of trademark and copyright recordations module will become the so~ 1001 for basic consultation on thos matters. through the issuance of paper circulars As to the public avail? Jility of or directives. but rather that all such recordations. use of thr "::ustoms future notifications will be Electronic Bulletin Bf JI'd accomplished by means of the IPR module developed for the Automated (CEBB)("Help" nUlT Jef (703) 440-6236) Commercial System (ACS). Customs is encouraged. Ter on the CEBB will furnish a print screen of the first identifies the ree" (ded trademark or page of IPR module text and a video copyright. its Q! nero a contact person, image to interested members of the and whether t' .e trademark or copyright public upon request. receives 50'( ,lIed "gray market" import restriction In a monthly basis. EFFECTTVE DATE: January 1. 1996. FOR FURTHER INFORMATION CONTACT: John beginnin' with the July 17,1991. edition. 11e Customs Bulletin has F. Atwood. Chief. Intellectual Property Rights Branch, Office of Regulations and publil1" .ed a brief reference of all tradv 4ark and copyright recordations Rulings. (202) 482-6960. (iN .uding all those recorded prior to SUPfllEIIIENTAAY IHFOMIAT1OIIf: Jv '/ 17, 1991 J. Upon request. Customs Background mcers will furnish a print screen of the first page of IPR module text fOf a Prior to creating the Intellectual trademark or copyright with any Property Rights (IPR) Task Force and references to licensees in recordations IPR Branch, the principal vehicle for prior to January I, 1996. deleted. notifying Customs officers and the Beginning on January 1. 1996. public of trademark and copyright recordation texts will not include recordations was through the iss" AlC8 licensee information on the first page of paper "circulars" or "directiv ..... (not all recordations show licensees). During 1989-1990. an IPR moe Je was developed for the Automated Since video images are not currently Commercial System (ACS), .d the basic available through the CEBB. Customs information and images or ill officers will provide a relevant image outstanding recordatioDf lansferred to upon request from the public. that program. along wit' the addition of In addition to financial savings. by all new recordations. r .&.mtntly. that narrowing the administration of database i. approacr "I 20.000 and trademark and copyright recordations to more than 1.500 Of' recordatiOlUl are the one automated system. this will added each yeu. A comparativ' .maly. of the exiat:in& permit the IPR Branch to concentrate on improving and refining the ACSIIPR paper recorda,' A notification system module. Substantive questions about with the paP" ,... ACSlIPR module disclosure and IPR recordations should indicate. til • sub8tant1al monetary be directed to the IPR Branch at (202) saVings ar incre&l8d efficiency will 482-6960. result by .Uminating the paper system.; Becauw .,. the ongoing conversion to Dated: January 2.1998.. Local .rea Networka (LANs). Customa Mk:bMl B. a:....-. offie .... now have the ability to call up Actin& Caauniuioner of CustDau. 1>0' ,the text and images (in the cue of fFR Doc. 9&-204 Filed 1-5-96; 8:45 ami v· Ird trademarks. an image may not be a&.M COOl • • • ~ 4tered. into the 51stelll). Aa:ordi.ngly. J Treasury Borrowinq Advisory Committee of the PUblic Securities Association Chairman Richard Kelly Chairman of the Board Aubrey G. Lanston & Co., Inc. One Chase Manhattan Plaza, 53rd Floor New York, NY 10005 Vice Chairman stephen Thieke Chairman, Market Risk Committee J.P. Morgan & Company, Inc. 60 Wall street, 20th Floor New York, NY 10260 Daniel s. Ahearn President capital Markets strategies Co. 50 Congress street, Ste. 816 Boston, MA 02109 stephen C. Francis Managing Director Fischer, Francis, Trees & Watts, Inc. 200 Park Avenue, 46th Floor New York, NY 10166 Thomas Bennett Partner Miller Anderson & Sherrerd One Tower Bridge West Conshohocken, PA 19428 Barbara Kenworthy Managing Director of Mutual Funds - Taxable Prudential Insurance McCarter Highway 2 Gateway Center, 7th Floor Newark, NJ 07102-5029 James R. Capra President Capra Asset Management, Inc. 555 Theodore Fremd Ave., ste. C-204 Rye, NY 10580 Mark F. Kessenich, Jr. President Eastbridge Capital, Inc. 135 East 57th street New York, NY 10022 Kenneth M. DeRegt Managing Director Morgan Stanley & Co. Incorporated 1585 Broadway New York, NY 10036 Bruce R. Lakefield Chairman & Chief Executive, Europe Lehman Brothers International (Europe.) One Broadgate London EC2M 7HA England 2 Richard D. Lodge President Banc One Funds Management Co. 100 East Broad st., 17th Fl. Columbus, OH 43271-0133 Richard B. Roberts Executive Vice President Wachovia Bank & Trust Co., N.A. P.O. Box 3099 Winston-Salem, NC 27150 Robert D. McKnew Executive Vice President Bank of America 555 California street, 10th Fl. San Francisco, CA 94104 Joseph Rosenberg President Lawton General Corporation 667 Madison Avenue New York, NY 10021-8087 Daniel T. Napoli Senior Vice President Merrill Lynch & Company 250 Vesey Street, North Tower World Financial Ctr, 8th Fl. New York, NY 10281 William H. pike Managing Director Chemical Bank 270 Park Avenue New York, NY 10017 Morgan B. Stark Principal Ramius capital Group 40 West 57th Street, 15th Floor New York, NY 10019 Craig M. Wardlaw Executive Vice President. Nations Bank Corporation Nations Bank Corporate Center Mail Code NCI 007-0606 Charlotte, NC 28255-0001 January 31, 1996 COMMITTEE CHARGE The Treasury would like the Committee's specific advice on the following: Treasury financing the composition of a financing to refund $31.3 billion of privately held notes maturing on February 15 and to raise $20 to $22 billion of cash in 3- and 10-year notes, 30-year bonds, and cash management bills; whether to reopen either the 5-7/8% notes of 11/15/05 or the 6-7/8% bonds of 8/15/25; and the composition of Treasury marketable financing for the remainder of the January-March quarter and for the AprilJune quarter. Other topics We also would like the Committee's views on: the scheduling of securities issues by the Governmentsponsored enterprises (Fannie Mae, etc.) and suggestions for improving the current queue system; for example, is the Treasury's traditional "traffic cop" role in scheduling GSEs' new issues making a significant contribution to stability in the market for Treasury securities? for GSE and Federal agency securities? We would welcome any comments that the Committee might wish to make on related matters. Summary of January - March 1996 Estimated Net Marketable Borrowing (billions of dollars) Net new money raised or announced (as of 1/29/96, 3:30 p.m.): Regular Treasury bills ( 52-week Treasury bills ( Cash management bills 2-year notes (includes 5-year notes (includes 7-year notes redemption SO.OO billion of foreign add-ons) S0.50 billion of foreign add-ons) 4.8 , , SO.OO billion of foreign add-ons) -8 I 0.8 ! 5.8 SO.OO billion of foreign add-ons) ,).,) ~IA 92 Net new money yet to be raised Regular Treasury bills ( 52-week Treasury bills ( Cash management bills ( 2- & 5-year notes ( Mid-quarter refunding ( SO.OO SO.OO SO.OO SO.OO SO.OO billion of foreign billion of foreign billion of foreign billion of foreign billion of foreign add-ons) add-ons) add-ons) add-ons) add-ons) 20.6 1.9 36.0 -1.4 ill 76.0 85.3 Total net marketable borrowing in the quarter Note. Assumes an end-of-quarter cash balance of $20 bIllion. Summary of April - June 1996 Estimated Net Marketable Borrowing (billions of dollars) Net new money to be raised Regular Treasury bills ( 52-week Treasury bills ( Cash management bills ( 2- & 5-year notes ( Mid-quarter refunding ( 7-year notes redemption $0.00 $0.00 $0.00 $4.65 $1. 75 billion of foreign billion of foreign billion of foreign billion of foreign billion of foreign Total net marketable borrowing in the quarter Note: Assumes an end ofquarter cash balance of $35 billion. add-ons) add-ons) add-ons) add-ons) add-ons) 8.9 5.6 -24.0 21.8 0.2 -L8 4.7 Estimated Treasury Marketable Borrowing (billions of dollars) January - March 1996 Total estimated marketable borrowing Total net marketable borrowing issued or announced through January 29, 1996 Total remaining net marketable borrowing Cash balance at end of quarter Amount Maruring Amount Offered Foreign Add-ons 85.3 9.2 76.0 $20 btllion Cash raised Cumulative cash raised 3- &; (i-mQnth bills 04-1an II-Jan 18-Jan 25-Jan OI-Feb 08-Feb IS-Feb 22-Feb 29-Feb 07-Mar 14-Mar 21-Mar 28-Mar 27.6 27.7 27.5 19.3 25.7 28.1 28.l 25.1 23.1 28.! 27.8 27.1 24.8 26.5 26.4 27.6 25.5 24.7 J ..U) 29.0 29.0 29.0 29.0 29.0 29.0 29.0 17.4 17.5 18.9 18.8 17.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.'1. -2.4 3.8 2.4 0.2 1.9 4.2 2.5 2.6 1.4 3.5 4.3 25.4 19.3 0.0 0.5 0.0 1.5 1.8 1.9 5.2 8.1 0.0 0.0 00 /8.0 18.0 0.0 0.0 0.0 -8.1 18.0 18.0 27.9 CQuPQns January 7-year December 2-year December 5-year 7.4 17.6 0.0 0.0 18.3 12.0 0.0 0.0 0.0 -7.4 0.6 12.0 January 2-year January 5-year 18.1 8.2 18.3 12.0 0.0 0.0 0.2 3.8 February 3-year February 10-year February 30-year Total Refunding 0.0 31.3 18.5 14.0 0.0 18.5 -/7.3 fM1 Ll.JJ. OJ1 12,0. 31.3 44.5 0.0 13.2 February 2-year February 5-year 18.5 8.4 18.8 12.5 0.0 0.0 0.1 4.1 507.9 592.7 0.5 85.3 52-week bills 11-1an 08-Feb 07-Mar Cash Management Bills Settlement Maturity date date 25·Jan 15-Feb 25-Apr Ol-Mar 18-Apr Grand total 0.0 26.7 85.3 .". Estimated Treasury Marketable Borrowing (biliiOl'!: of dollars) April ~ June 1996 Total estimated marketable borrowing Total net marketable borrowing issued or announced through January 29, 1996 Total remaining net marketable borrowing Cash balance at end of quarter Amount Maturing Amount Offered Foreign Add-ons 47 0,0 4,7 $45 billion Cash raised Cumulative cash raised 3- &; 6-[DQmh bills 04-Apr II-Apr IS-Apr 25-Apr 02-May 09-May 16-May 2J-May JO-May 06-Jun \3-Jun 20-Jun 27-Jun 26.9 27.3 25.6 24.6 26.9 2B.7 29.3 17.1 28.6 2B.5 18.6 28.6 17.6 29.0 29.0 26.0 26.0 26.0 2B.O 28.0 1B.O 29.0 29.0 29.0 30.0 30.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.1 1.7 0.4 1.4 -0.9 -0.7 -1.3 0.9 0.4 0.5 0.4 1.4 2.4 8.9 17.6 /8.0 IB.6 19.3 19.8 19.8 /9.8 19.8 0.0 0.0 0.0 0.0 2.1 1.8 1.2 0.4 5.6 0.0 33.0 18.0 0.0 0.0 15.0 15.0 0.0 0.0 /5.0 12.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 -33.0 -18.0 15.0 12.0 -15.0 -24.0 7.B 17.6 8.0 IB.O 8.6 0.0 19.3 13.0 19.3 13.0 0.0 1.3 0.3 1.3 0.3 -7.8 2.9 5.3 2.5 4.7 0.0 35.0 19.0 14.5 1.3 0.5 20.3 -20.0 f1.fl fl.fl fl.fl QJl 35.0 33.5 I.B 0.2 May 2-year May 5-year lB.2 9.2 19.3 13.0 1.3 0.3 2.3 4.1 14.2 Grand total 620.0 618.3 6.4 4.7 4.7 S2-w~ek bills 04-Apr 02-May JO-May 27-Jun Cash management bills Maturity Settlement date date IS-Apr 03-Apr IS-Apr 25-Apr 20-Jun 15-May 19-5ep 03-Jun 20-Jun CQupons April7-year March 2-year March 5-year April 2-year April 5-year TREASURY FINANCING REQUIREMENTS October -' DecemtJer 1995 $Bil. ,-------------,-.:.-.--'--'----:---->-':-1"-------, $Bil. Uses Sources 150 150 125 125 Coupon Maturities. 100 100 ----- State and Local • 75 • 25 Deficit 75 50 I - 25 o I [)epanm&tH of o Includes budget deficit, changes In accrued Interest and checks outstanding and minor miscellaneous debt transactions. the rreaSlJ'Y Of'Iice ol MIlJ'lote1 Fmaoc.e TREASURY FINANCING REQUIREMENTS January - March 1996 $BiI. r --------------r---'-------------------., $Bil. Sources Uses 200 200 Coupon Maturities 150 150 State and Local • 100 50 o Deficit , 100 Decrease in Cash Balance 3 Net Market. 85 '/. Borrowing _____________________-1____________________ I Deoartment of the TflJaSUf'p' Offlce of Ma'llot Finance • 1 ';. 8 • Savings Bonds •.. ~II~IIII~==~y~2 :_J 50 o Includes budget deficit, changes In accrued interest and checks outstanding and minor miscellaneous debt transactions. 2 Issued or announced through January 26, 1996 3 Assumes a $2) billion cash balance March 31,1996. January 29, 199&- 2' TREASURY OPERATING CASH BALANCE $BiJ.,---------------=..::c:.:..:.:..--.:..:..:.::.:.:..:::.:.:..L_ _ _ _ _ _ _ _ _.,..-_ _ __ Without --.. New BorrowingJ! 40 20 O~------------------ • ___ • Federal Reserve Account • •..... -20 • •, -40 .j -60 • #' .# -80~-~-~-~-~-~-~-~-~-~ Jan Feb Mar Apr May Jun y Jul Aug Sep _ _~_L__~_~_~ Oct Nov Dec Jan 1995 Feb I ___ Mar 1996 Assumes refundIng of matunng Issues. Department 01 the Treasur.,OffJce 01 Mafl<.et Finance January 29 199& 3 TREASURY NET MARKET BORROWING Y $BiJ. J. Coupons Over 10 yrs. CJ D 100 84.6 80 100 5-10yrs.Y ~ 2 - under 5 yrs • Bills 60 40 20 0 o -20 -40 tfO L-------~-~I~I-~III~-I~V~~-~II-~I~II-~IV~~-~II-~II~I-~IV~~1 III IV II 1992 Department 04 the Treasury OH,ce 01 Markf'l F onance Y Y Y 1993 1994 1995 1996 Excludes Federal Reserve and Government Account Transactions. 7 year note discontinued after April 1993. Issued or announced through January 26, t 996. January29,19%4 NET NEW CASH FROM NONCOMPETITIVE TENDERS IN WEEKLY BILL AUCTIONS Y $Mil.r---------------------------500 Net New Cash (left scale) •.... 400 Discount Rate % 6.5 Discount Rate (nght scale) o 26 week 26 week • 13 week 13 week 6.0 300 5.5 200 '7""'"_0.-15.0 100 o -100 -200 -300 -400 Jan Feb Mar Apr May Jun JuJ Aug Sep Oct Nov Dec Jan P 1996 1995 ' / Excludes noncompetlbve lenders from foreIgn official accounts and the Federal Reserve account. p Prellmmaoy Oepa.rtmenl 01 the Treasury Office- of Mll1!<el Finance NONCOMPETITIVE TENDERS IN TREASURY NOTES AND BONDS2/' $8il . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $8il. C]2&5Year - 3.5 - 3.0 2.5 - - 2.5 2.0 - - 2.0 1.5 -1.5 3.51- W;;iJ,&M3, 10 & 30 Year 3.0.;... ~ 1.0 - ,. 1.0 0.5- I- 1993 .Y Excludes foreIgn 1994 0.5 1995 add-ons from noncompetrtlve tenders SlOee October 18,1995. for81gn add-cns have been prohlblted to aVOid exceedtng the debt limit, foreign roUovers are also excluded from noncompetItIve tenders p Preliminary Treasury increased the maximum noncompetitive award to any noncompetitive bIdder to $5 m!!!ton effectIve November 5, 1991 Effective February 11, 1992. a noncompetitive bidder may not hold a poSition Tn WI tradTng. futures. or forward contracts nor submit both competitive and noncompetitive bids for its own account Oepal"lment of th6 Tr&asury Office 01 MarKet FII'I.;'I.nce January 29, 1996-6 SECURITIES HELD IN STRIPS FORM 1994-1996 Privately Held $Bil r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $ B i L Stri!;!!;!able II D As of January 31,1995: Stri!;!!;!ed As of January 31, 1994: $694.9 billion, $210.3 billion 80 $760.5 billion, $226.9 billion 80 As of January 19, 1996: $802.5 billion, $222.6 billion 60 60 40 40 20 20 o * Less than 5 years 5-10 years 10-15 years 15-20 years 20-25 years 25-30 years Years Remaining to Maturity Note: The STRIPS program was established In February 1985. The 11 5/8% note of November 15, 1994, Issued on November 15, 1984, was the first STRIPS-eligible secunty to mature . • Less than $3 million Department of the Troasury Of'!108 01 Manl;et Finance January 29, 1996- 7 SECURITIES HELD IN STRIPS FORM 1994-1996 Percent of Privately Held o~ r------------------------------------------------------------------------,o~ II D 80 80 As of January 31,1994 As of January 31, 1995 As of January 19, 1996 60 60 40 20 o * Less than 5 years 5-10 years 10-15 years 15-20 years 20-25 years 25-30 years Years Remaining to Maturity Note: The STRIPS program was established In February 1985. The 11 5/8% note of November 15, 1994, Issued on November 15, 1984, was the first STRIPS-eligible secunty to mature . Departmel'\l ol the Treasury Office 01 Marl'le! F,naf'1CE1 • Less than 1 percent January 29 199&8 TREASURY NET BORROWING FROM NONMARKETABLE ISSUES $Bil. $Bil. 7.8 8 3.5 8 6 6 4 4 2 2 0 0 -2 -2 -4 -4 Ll D II -6 -8 -10 -12 -14 -1.7 -2.3 Savings Bonds -6 -4.7 -8 -6.7 State and Local Series -7.3 -10 -8.9 Foreign Series -12 ~----------~------------~------------~------------~~-14 II III 1992 IV II III IV II 1993 III 1994 IV II III IV 1995 Ie 1996 e estimate De!)8rtment 01 the Treasury Othoo of Man<:at F!rtsnca January 29, 199&9 SALES OF UNITED STATES SAVINGS BONDS 1980 - 1995 $Bil. 6 5 4 • Total Sales 3 2 • Payroll Sales OLw~~~~Wu~~~~~~~~~~~~~~~~~~~~ 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 19941995 e End of Quarter e estimate Department 01 the T r&&!\lury Office ot Mantel Finance J0.I"lU8/y 29,1996-10 STATE & LOCAL GOVERNMENT SERIES . • ••• $Bil.r-------------------------------...$Bil. • 10 :. ...#. ~. ~ .. .:' :• . •• •••• •• •• •••••• • ••• #. ++.. + •••• • • ·1 .#+ - 5 10 •• 5 ••• Redemptions I 0 0 $Bil. $Bil. 0 0 -5 -5 -10 ~~-~--~~-~~-~-~~-~~-~--L-~-~~~~--L-~~_10 II III IV II 1991 III II IV III IV II III II IV III IV 1995 1994 1993 1992 Note: SlGS sales were suspended effective October 18, 1995. ()epanment 01 ,he Treasury January 29, , 99&-1 'I Otftce 01 Marltal FI!l8flee STATE AND LOCAL MATURITIES 1996-1998 $BiL $Bil. 8 8.0 6 4 2 oL--D~~~~~--~~~~~ II III 1996 Department of the Treasury Offi~ of Marllat Finance IV II III 1997 IV II III IV o 1998 January 29. 199&12 QUARTERLY CHANGES IN FOREIGN AND INTERNATIONAL HOLDINGS OF PUBLIC DEBT SECURITIES $Bil.,-------------------------------,$Bil. 65 Nonmarketable 65 ~ D ~ 55 Marketable 55 50 0 50 45 • Other Transactions Net Auction Awards to Foreign .!.I 45 40 40 35 35 ~ ~ 25 20 15 25 20 15 10 10 5 o ~ ~ -10 -0.1 -10 -15~-----~-----~-------~--------~--------~-15 II III 1991 IV II III IV II 1992 III 1993 IV II III IV II 1994 III IVY 1995 21 AuctIon awards to foreIgn officIal purchasers netted agaInst holdings of maturing securllles. Y Data through November 30, 1995. Department of tI1e Tte8Wf\' Offloo of Ma(j(et Finance Janusry 29,1996-13 FOREIGN HOLDINGS AS A PERCENT OF TOTAL PRIVATELY HELD PUBLIC DEBT Percent - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Percent Quarterly Department of "\flo Treasury OffiCE! of Marx",! F1nance January 29 1996-14 MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES December 31,1993 ii I country J As a % of $ Billions \ F!~!f~n Decembe r 31, 1994 !As a % of I! $142.7 22.9% 4.7% 684 11.0% 2.2% 464 7.4% Netherland Antilles il l i'i 17.1 2.7% 1.5% 0.6% Switzerland I 32.6 5.2% Ii 18.2 2.9% 4.6 0.7% I~ United Kingdom Ii Germany Singapore Mainland China $175.7 25.5% 5.5% 91.0 13.2% 544 27.6 7.9% 29% II 1.7% il II I, i II 0.2% Ii ! As a % of ; p~?:::e i: $ BiJhons" p~f:::e I $ BiUions: F!~~~~n I Japan November 30, 1995 Ii, I As a % of I As a o/tJ of F!~!:~n ! As ! a % of p~~::e $225.1 25.6% 6.8% 129.9 14.8% 3.9% 55.3 6.3% 1.7% 52.2 5.9% 1.6% 1.1% 4.0% 1.1% 324 4.7% 1.0% 35.6 4.1% 0.6% 219 3.2% 0.7% I 33.0 3.8% 1.0% 3.0% 0.6% 'I 31.5 3.6% 0.9% 3.7% i' OPEC 26.7 4.3% 0.9% I 20.5 25.6 29.3 3.3% 0.9% Canada 22.8 3.7% 0.7% I 24.6 3.6% 0.8% I 25.0 2.6% 0.8% Taiwan 28.2 4.5% 0.9% Ii.1 25.8 3.7% 0.8% ·1 0.7% Spain 31.2 5.0% I: 27.9 4.1% 0.9% Hong Kong 13.7 2.2% 2.0% 04% Mexico 23.2 3.7% 0.4% " 0.8% 13.8 7.9 1.1% Belgium 12.0 1.9% 0.4% i! 13.1 1.9% 0.2% 0.4% 9.7 1.4% 0.3% Ii 116.7 16.9% 3.7% I: 688.6 100.0% France 1.0% 6.9 1.4% 0.3% 126.2 20.3% 4.1% Estimated Foreign Total 622.9 100.0% 20.4% In 2.2% 0.6% • 'i 18.8 2.1% 0.6% " Ii Ii I; II 16.6 1.9% 0.5% 14.7 1.7% 0.4% 9.3 1.1% 0.3% 158.6 16.1% 4.8% 878.2 100.0% 264% i! I' I' Note: RP's are included 2.7% 19.7 I [II Other 23.6 I 21.7%! "other". Detail may not add to totals due to rounding. Source: Treasury Foreign Portfolio Investment Survey benchmark as of end-year 1989 and monthly data collected under the Treasury Internallonal Capital reporting system. January 29.1996-1$ Oepartmen1 olU'1e Treasury OffICE! of Marl(el Finance NET AWARDS TO FOREIGN OFFICIAL ACCOUNTS Y $8il. $8il. 9.3 10 10 8.8 6.1 6.4 6.2 4.7 6.0 3.9 3.8 5 5 0 0 1·"·_1 LJ -0.8 ·5 -4.2 -5 -1.0 -1.0 -5.7 ·10 -10 Notes -15 ·20 CJ 5 years and over CJ 2-3 years - ·15 Bills II -18.6 lit IV 1991 II III IV II III IV 1993 1992 II III IV 1994 II II III IV 1995 IY ·20 1996 Quarterly Totals y Depart~nt 01 the Twasill)' OffIce of Marl(at Finance Noncompetitive awards to foreign offiCial accounts held In custody at the Federal Reserve In excess of foreign custody account holdings of matunng securities. Foreign add-ons prohibited Since October 18, 1995 to aVOid exceeding the debt limit Y Through January 26, 1996. Jat1uary 29 , 995· 16 SHORT TERM INTEREST RATES Quarterly Averages %r---------------------------------------------------__________~% Through 10 10 8 8 6 6 3 Month Treasury Bill 4 4 1985198619871988198919901991 19921993199419951996 Department 01 the Treasury Office or Mar1<.et Finance January29 1996-17 SHORT TERM INTEREST RATES Weekly Averages %.----------------------------------------------------------------,% 9 9 • Prime Rate 8 8 Through 7 7 January 24 Federal Funds • 1 Commercial Paper • 6 ...... ~ • 5 3 Month Treasury Bill 5 4~~~D-~~~~~~~-U~-L~-L~~~~LL~~~~~WL~~4 Apr May Jun Jul Aug 1995 Sep Oct Nov Dec Jan 1996 Department of the Treasury Office 01 MarKot Finance January29199&18 LONG TERM MARKET RATES Quarterly Averages o/r-------------------------------------~~----~--------------------------------_,% 12 12 ... 11 11 New Aa Corporates 10 10 Through January 24 9 .. 8 7 ~ j 9 ! 8 7 30-Year Municipal Bonds 6 6 5~------~----~--~----J---~----~--~----~---L--------~5 1985 1986 1987 198819891990199119921993199419951996 Department 01 the Treasury Office 01 Marilet Finance January 29 1996-19 INTERMEDIATE TERM INTEREST RATES Weekly Averages' 0/0,-------------------------------------------------------------------------------. ... '-- FHLMC 30-Year Conventional , 8 ' ... _ , .,-." \ .- .... , " ' .......... " , ....... - ." \ , Through January 24 --- ' ... ~, 7 8 l ~~- 7 6 6 Treasury 5-Year 5 Apr May Jun Jul Aug Sep Oct Department 01 the Treasury Office 01 Market Finance Dec Jan 5 1996 1995 • Salomon 10-yr. AA Industnal Nov IS a Thursday rate. January 29 1996-20 MARKET YIELDS ON GOVERNMENTS %r-----~----~----,-----_r----_r----_r----_,----_,------,_--_.% 6.0 6.0 5.8 5.8 5.6 5.6 5.4 5.4 5.2 % • 5.0 64 "", . . ,,""" "'" 6.4 6.0 5.8 4.8 5.8 5.6 4.6 5.6 30 4.4 5.0 6.2 January 29, 1996 4.8 5.2 % 4.6 5.4 ~----~----~----~----~----~----~----~----~----~----~ 2 0 3 4 5 6 7 8 9 4.4 10 Years to Maturity Department ollhe Treasury January 30.1996-21 OffICe of Markel Finance PRIVATE HOLDINGS OF TREASURY MARKETABLE DEBT BY MATURITY $Bil. r------------------------------------------------, 2800 2600 2400 2200 2000 D D D 2-10 years D 1 year & under • 1800 1600 1400 1200 Over 10 years 1-2 years Bills 1000 800 600 400 L------------ 200 o 1984 1985 198619871988 1989 1990 1991 19921993 19941995 As of December 31 Department 01 the Treasury OffICe 01 Mar~el Finance January 29 199&-22 PRIVATE HOLDINGS OF TREASURY MARKETABLE DEBT Percent Distribution Coupons 0 o 1-2 years o 1 year & under Over 10 years o 2-10 years • Bills 100% 14 80 34 60 16 40 20 o 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 As of December 31 Department 01 the Treasury January 29 199&-23 Office 01 Mar1<e! Finance AVERAGE LENGTH OF THE MARKETABLE DEBT Privately Held years--------------------------------------------------------+ - June 1947 Months 10 Years 5 Months December 31, 1995 66 5 Years, 3 Months \ 64 8 7 62 J F M A M J J A SON D 6 5 December 1975 2 Years 5 Months 4 3 2LLLl~~~~~-LLLLLLLLLLL~~~~~~~~LLLL~~~~ 19454749 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 Oepl'lrtmen1 01 the Treasury Of'hce of Mar1<et Finance January 29 1996-24 MATURING COUPON ISSUES February - June 1996 (in millions of dollars) December 31,1995 Held by Maturing Coupons 87/8% 77/8% 45/8% 71/2% 45/8% 73/4% 51/8% 93/8% 75/8% 51/2% 73/8% 41/4% 75/8% 57/8% 77/8% 6 % Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note 02/15/9621 02/15/96 02/15/96 02/29/96 02/29/96 03/31/96 03/31/96 04/15/96 04/30/96 04/30/96 05/15/96 05/15/96 05/31196 05/31/96 06/30/96 06/30/96 Totals V V Total Federal Reserve & Government Accounts Private Investors 8,575 9,055 19,537 9,622 18,949 9,081 19,579 7,782 9,496 18,806 20,086 19,264 9,617 18,927 9,770 19,859 616 1,427 3,828 1,256 448 1,119 1,980 787 926 800 2,074 2,228 393 753 412 1,765 7,959 7,628 15,709 8,366 18,501 7,962 17,599 6,995 8,570 18,006 18,012 17,036 9,224 18,174 9,358 18,094 374 679 630 435 2,479 555 1,955 647 786 2,685 1,155 3,557 1,312 4,574 574 4,784 228,005 20,812 207,193 27,152 Foreign..1l Investors F.R.B. custody accounts for foreign official institutions; included in Private Investors. Includes $125 million of foreign targeted Treasury note. Department of the Treasury Office of Markel Fmance January 29, 1996-25 TREASURY MARKETABLE MATURITIES Privately held, Excluding Bills 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 O;=====~~~==~~~~~~~====~==============r=========~====rl 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 o J Department of the Treasury Office of Mar1<et Finance M F A M _ Securities Issued pnor to 1994 !illiLl New issues calendar year 1994 J J D D New issues calendar year 1995 Issued or announced through January 26, 1996 January 29,1996-26 TREASURY MARKETABLE MATURITIES $~~ ~;::;-:;nn_'_ _ _--:;j'ft;v:;-_ _ _,-P__ riv:...:.a:.:t::.e:.!.IY...:.h.:..:e::..:;:.;ld, Excluding Bills 300 267 ~ 1998 26.5 287 $~~' c---=---,-----2-0-0-2------,------,..-, 27 6 m N • ~ ~ N 18 22 ~ 16 20 ~~ 11.2 119'1 116 124 117 10 12 '12 ~~ 10 93 14 8 6 107 12 1~ m 4 6 16 2 o~~~~~~~~==~==~~~~~==~~ Me g 2003 m ~ . 18 16 24 22 • ~ N ~ 27.5 ~ 14 118 20 12 10 18 16 8 14 6 4 12 10 ~~~~~~~~~~~~~~~~==~~~~~~~ 115 11.5,07'2.0 ; 6.8 3.0 ~~~!===~==~~==~==~====~==~==~ 120 ~ 2004 30 ~~~~~~~YI~~bb~~~~~~~~~~ : J I F M A I 1 1 M Department of the Treasury OffIce of Marxet FInance J J •A 20.6 18 16 135 131 12012.0 ~ 2441 2001 S o N _ Securities issued prior to 1994 Em New Issues calendar year 1994 157 14 16.4 12.4 12 10 8 6 4 ~~~~--~--~----~--~----~~~----~ J F M A M J J SON 0 o D D New issues calendar year 1995 Issued or announced through January 26, 1996 J8Iluary 29. 1996-27 TREASURY MARKETABLE MATURITIES $~ $~'F :!~ !j II ~E » Privately held, Ex[""C_lu_d_in-=!!_B_il_IS,.-_--:-_ _ _ _--:-_ _.,--_....,....,._ _,.., WI 2006 M I .27 r I I 2T I I I I 2014 I I "'12T I "'1 I I -1.1 , 2019 ~ - 188 1B.7 -~ ~ r-r-~ r-r-- J _ Securities Issued prior to 1994 _ New issues calendar year 1994 D D F M A M J J A New issues calendar year 1995 Issued or announced through January 26, 1996 S o N o TREASURY MARKETABLE MATURITIES Privately held, Excluding Bills S~t'-------'-----2-0-2-0--2O-.7--r------...,., D 20 SBilrl------;-----2-T""2-3-----;-------,-, 0 D~ W 20~' 18 I--- 16 16 ~ 14 14 t-- 18 12 10 : 9.6 97 174 12r10 r8r- • 6r .~ 2 o 2- 2021 36 ~ o;=~~==~==========~==~======~ ~, I :l@ 2T I I' II 20 S I '" ," ,' 2. 22 11 IT I 2022 22 I20 ~ 18 I16 ~ 20 18 16 ,. 12 10 8 6 10.0 T nI II 2026 ,. I--r- 12 10 8 6 10.2 I-rI-le- J F M A M J _ J A N D Secunties issued prior to 1994 IBJi! New Issues calendar year 1994 J o o F M A M J J A SON D New Issues calendar year 1995 Issued or announced through January 26, 1996 Department 01 the Treasury Office 01 Market Finance January 2g, 1996·29 SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED IN FEBRUARY 1996.Y Monday Tuesday Wednesday 1 7 5 6 12 13 14 20 21 19 Auction 3 year:ll Holiday 26 27 Auction 2 yearll Auction 10 year;V Announce 2 year 5 year 28 Friday Thursday 8 Auction 52 week Y Auction 30 year;V 2 9 15 16 22 23 Announce 52 week 29 Auction 5 yearV Auction 52 week~ J/ Does not Include weekly bills ?I For settlement February 8 11 For settlement February 15 Depanment 01 the Treasury OffIce of Msrxet Finance lIFor settlement February 29 §I For settlement March 7 January 31,1996-30 SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED IN MARCH 1996J/ Monday Tuesday Wednesday Friday Thursday 1 4 5 6 7 8 11 12 13 14 15 18 19 20 Announce 2 year 5 year 21 22 27 28 26 25 Announce 52 week Auction 2 yearY Auction 29 5 yearS! and 52 week.}l J/ Does not include weekly bills S! For settlement April 1 .J' For settlement April 4 Department of the TreaSIJry OffICe 01 Market Finance Januay 31,1996-31 SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED IN APRIL 1996J/ Monday Wednesday Tuesday Friday Thursday 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19 22 23 29 Announce 2 year 5 year Announce 52 week 25 24 Auction Auction 2 yearY 5 yearS! 26 Auction 52 week.}l 30 J/ Does not Include weekly S! For settlement April 30 bills .J' For settlement May 2 09partment 01 the Treasury OffICe of Market Finance January 31.1996-32 DEPARTMENT TREASURY omCE OF PUBUC AFFAIRS. 1500 PENNSYL OF THE TREASURY NEWS .w.~ WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE January 31, 1996 STATEMENT BY TREASURY SECRETARY ROBERT E. RUBIN AND COUNCIL OF ECONOMIC ADVISERS CHAIRMAN JOSEPH E. STIGLITZ Today the Federal Reserve, the independent agency that sets the nation's monetary policy, lowered the federal funds rate and the discount rate. This Administration recognizes and respects the independence of the Federal Reserve. We share the goal of maintaining strong economic growth and low inflation. This Administration has taken forceful actions to get the economy moving, and the progress has been impressive. We cut the federal budget deficit by more than half as a share of national output. The economy has responded: Jobs are up by 7.8 million, unemployment is down, investment is strong, and inflation remains at its lowest level in a generation. Although growth rates always vary quarter to quarter, with these fundamentals in place, we believe that the economy will remain healthy in 1996. RR-847 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 J ,. ~ . Monthly ~eport . by the Secretary of the Treasury Pursuant to the Mexican Debt Disclosure Act 0/1995 January 1996 Treasury Secretary's Repon to Congress January J 996 Contents I. Overview II. Current Condition of Mexico's Economy a. Monetary Policy Fiscal Policy Structural Reform and Privatization Information Disclosure Economic Adjusonent Banking Sector Developments Financial Market Trends International Reserves b. c. d. e. f. g. h. page 1 3 ill. Disbursements. Swaps. Guarantees and Compensation to the t:.S. Treas~· 15 IY. !\lexico's Financial Transactions 17 Y. Status of the Oil Facilit~· 17 Graphs Tab: Ke)· Trends in 'Iexico's a. b. C. d. e. Econom~' and Financial Markets Monetar: PollC~ Fiscal POIlC~ Tesohorw Rep3~·ment and Debt Profile Inflation and Interest Rates Brad\ Bonds f. Currenc~ g. h. Trade Balance GOP. Industnal Productlon. and Employment and Stock Markets Treasury Secretary's Repon January 1996 I. 10 Congress Overview In providing assistance to Mexico under the February 21. 1995 Agreements, the {J. S. government acted to protect vital U, S. interests -- American expons and jobs, the security of our common border, 'and the stability of other emerging market economies. U .S. and other international suppon has allowed Mexico to implement the policies necessary to aven default. regain access to capital markets. and set its economy back on a path to growth. On January 29. 1996, Mexico repaid all $1.3 billion in outstanding shon-term swaps to the Treasury and Federal Reserve. As of January 31, Mexico's outstanding obligations to the U.S. have declined to $10.5 billion under the program, all in the form of medium-term swaps. No further principal repayments are due until June 30, 1997. To date, the United States has received about $750 million dollars in interest payments from Mexico. Mexico's rapid reentry to international capital markets has supponed its ability to repay emergency suppon funds provided by the U.S. In January, Mexico continued to solidify its standing in international markets, including the sale of a DM1.5 billion (approximately $1 billion) seven-year bond issuance, the longest maruril)' of any government offering since the December 1994 devaluation. As of January 19, international reserves have risen to $16.0 billion from the end-l994 level of $6.1 billion. In 1995, Mexico pursued the rigorous adjusonent policies necessary to address the financial CriSIS that threatened its economic stability and prospects for sustained grov.1h In 1995, these poliCies led to a budgetary surplus for the rust three quaners of 1995 of 1.5'iC of GDP. and a decline in monthly inflation from 8% in April to an average of 2.6'iC in the fourth quaner. Monthly inflation increased to 3.3~ m December and 1.9% for the first half of January, after remammg roughly constant at about 2% from July to October. Peso depreciation and seasonal pnce panerns contributed to the uptick, with minimum-wage increases and adJusunents to state-regulated prices pushing up rates further. For 1996. th~ ~1exlcan authorities have indicated that they will cominue to pursue ught fiscal and monetary policies. Financial markets. while sull tra~lle. have stabilized following a period of volatilil)' in October and ~o\'ember. They have opened 1996 strongly. based In pan on favorable expectattons for the new year regarding the government's continued stabilization efforts. as well as the establishment of the basis for a resumption of economic grov.1h. The peso strengthened to 7.40 pesos per dollar as of January 29 from 7.70 pesos per dollar on December 29. As of January 29. Mexico's stock market. in peso terms. was about 33% above preCriSIS levels. although it IS down 38% in dollar terms. With a more stable peso, interest rates on the benchmark 28-day ceres declined to 37.2% in the 1 Treasur. Secrerar. Januar. 1996 '5 Repon TO Congress January 23 auction from 46.8" in the December 26 auction. well below the 83 o/c annual rate reached tn March 1995. The recession in 1995 that accompanied the fInancial crisis was deep. as GDP dropped 9.6% in the third qu.aner of 1995 compared to the thrrd quaner of 1994. Recent data on industtial production and unemployment. however. suggest that economic activity may be expanding. On a seasonally-adjusted basis. GDP rose by 2.4 o/c from the second to the third quaner. accordmg to the Government of Mexico. In a December survey by Consensus Economics. private analysts forecast that GDP would rise 2 % in 1996. Mexico's banking sector remains strained; however, the government's measures to mitigate the immediate impact of the problem. to improve regulation and supervision. and to encourage capital infusions have lent suppon. Through FOBAPROA. the central bank's insurance fund. the government has purchased loans from banks in proponion to new capital injected by share holders. So far. ten banks. holding 70 % of the banking system's assets. ha ve been recapitalized. As a result of the additional capital provided by bank shareholders and the sale of loans to FOBAPROA, these banks have sharply raised their net worth Outstanding {;.S disbursements under the February 21 agreements total S 10.5 billion ar the end of January. all of which are backed by the full faith and credit of the MeXican government. In addition, all of Mexico's obligations to the United States are backed by proceeds from Mexico's crude oil. oil products. and petrOChemical product exports. Payments for these expons flow through a special account at the Federal Reserve Bank of New York. As of January 23. about $7.4 billion had passed through this account. Treasu.ry Secretary's Repon to Congress Janu.ary 1996 n. Current Condition of Mexico's Economy a. MonetaIj' Policy Monetary aggregates suggest policy remains tight In 1996, the Bank of Mexico (BOM) is providing information on net international reserves (NIR) using a new definition in which it deducts IMF liabilities from NIR (see International Reserves section). Net international reserves decline as a result of this accounting adjustment, and net domestic credit (NDA). the monetary base less international reserves, increases; the monetary base is unaffected. 1995 • The level of base money reflects large seasonal fluctuations in money demand. End-1995 monetary base was NP66.8 billion. an increase of about 25 ~ m December. • In 1995. base money grew by 17 %. although the real monetary base fell by :3 t;C lvearly mflatIon was 52 %). • NDA (old BOM deftruuon) fell NP77. 7 billion during 1995. MexIco increased Its lIabilIties to the IMF significantly in 1995. The IMF defmltlon of r-;IR deducts these liabilities. As a result. dunng 1995. !'I:DA. using the IMF definition. increased and !':IR shrank M 1 (the monetar: ha~ nominal term" In 19Q:- • plu~ checking deposits) fell about 10% In 1996 • Through Januar: 19. ha~ mone~ fell about 10% to 59.9 billion pesos:' • Through Januar: 19. ~Do\ has fallen by about 15,9 billion pesos. as NIR increased by 9.1 billIon pesos during the same period. IOn January 1. 19%. the Governmenl of Mexico changed the name of the country's ~~ (:\ P .' 10 • peso~ • currency from • Dey. 3 Treasury Secrelary's Repon Jarwary 1996 [0 Congress Market indicators also suggest that monetary policy remains tight The real interest rate (the nominal fate adjusted for inflation) on 28-day ceres in mid-January was about 11 ~. down from last month's rate of 18%. but up from about 10% In mid-October. • The January 23 primary auction resulted in a yield of about 377c on 28day ceres. This was down from the average auction rate of 48.6% m December. Secondary market rates have moved with the primary auction rates. • The real exchange rate appreciated by about 3.4% from mid-December to mid-January. though it is still down about 10% from end-September. Tight policy has limited injllltion. though there was an uptick in November and December. • Monthh inflatIOn increased to 3.3 'ic in December and 1. 9 % for the flI'St half of JanuaT). after remammg. roughly constant at about 2 'ic from Jul~ to October Peso depreciation and seasonal price panerns contributed to the uptick. With mmlIllum-wage increases and adJusunems to state-regulated prices pushing up figures further. II. b. Fiscal Polic~' Tight fiscal poli(\ productd surplusts in the first three quarters of 1995 Tight fiscal pohcle' third quaneI'. In 1995 rt'\ulted In a budget surplus at the close of the • The non-fmanclal pu~h;: \ector surplus was NP17.4 billion at the end of the first three quaner~ l'! 1995 11 :; 'ic of GOP). compared to a NP2.0 billIon surplu~ (O.~C:; ot GDPl tor the same period last year. • Mexico's pnmary surplus. "hlch excludes interest payments. was NP70.3 bilhon (6.3~ of COP) for the first nine months. compared to a NP32.2 bilhon surplus (3.5~ of GOP) for the same period in 1994. 4 Treasury Seererary's Repon January J 996 10 Congress Indications suggest a budget surplus for all of 1995, and Mexico projects a balanced budget in 1996 The overall and primary surpluses for 1995 have thus far exceeded those targeted in the economic program announced on March 9. 1995. This program targeted a 1995 budget surplus equal to 0.5 % of GDP. and a primary surplus equal to 4.4% of GDP. • Mexico's 1996 budget (described in the November report). projects a prima..ry surplus of 4 % of GDP and an overall balanced budget. II. c. Structural Reform and Privatization Market-oriented refonns continue In 1995. the Mexican government expanded its existing privatization and liberahzation program to include traditionally regulated sectors. such as rransponation. telecommunications. and energy (described in the December 1995 Semi-Annual Report). Additional long-distance telecommunications concession provided On January 15. the Mirus~ of Comrnurucations and Transponation (SeT) announced that Cableados ~ Sistemas SA had received the seventh license for the provision of long-dIstance services when Telefonos de Mexico's (TELMEX) monopoly ends In 1997. SCI conflrmed an April Hrne frame for the conclusion of discussions among TEL~1EX. new long-distance prcwlder~. and SCT on issues including mterconnectIon fees. dlahng codes. and billing. and for regulatory changes of the telecomrnurucauons lay. Local telecommunication sen'ice procedures and wireless service concessions announced On January 5, SCT announced procedures for obtaining local telephone licenses. 5 Treasury Secrelan 's Repon to Congress Jarw.ary 1996 • As with the long-distance concessions, the new licenses will allow both domestic and foreign panicipants to compete with TELMEX for provision of services withm regions. stated that it expects to provide a IS-year concession for a joint venrure between Grupo Iusacell (Mexico) and Bell Atlantic (U.S.) for provision of fLXed-wireless telephone technology. SCT II. d. Information Disclosure Mexico has significantly increased the breadth and frequenc)' of us reporting Public disclosure of financial data by the Mexican government and the Bank of Mexico has increased substantialJy. • In December. the Bank of Mexico began to publish quanerly targets for net domesuc credIt and net mtemauonal reserves. This change, from the previous pracuce of pubhshmg annual targets. should facilitate even closer monitoring of monetary policy • Mexico has unproved the coverage and timing of its reponing on both real and finanCial mdlcators. mcludmg data on output, inflation, international reserves. balance of payments. fIscal and monetary aggregates. and public debt. • The Mexican government and the Bank of Mexico now provide a wide set of histoncal and current data on the Internet. II e. Economic Adjustment In./l4tion spiked In Dectmb~r bur r~mams contained After remaining rough1~ constant at at'l<.lU[ ~ ~ from Juiv to October. monthly mflation mcreased to 3.3 C; In Decemtler and 1. 9 % for -the first half of . January. although the rate IS sull well below the 8 % peak in April. The mflation rate for all of 1995 was about 5~ %. Peso depreciation and seasonal pnce patterns contributed to the recent uptiCk, with minimurn-wa2e increases and adjusonents to state-regulated pnces pushing up rates further ~ 6 Treasury Secrerary's Repon January 1996 10 Congress Merico's trade balance remains strongly in surplus Mexico registered a merchandise trade surplus of $484 million (preliminary data) in December. an increase of about 28 % from December 1994. The trade surplus for 1995 was about $7.4 billion. a dramatic increase from the $ 18.5 billion deficit recorded in 1994. Total expons were 31.2% higher while impons fell about 8.4 % in 1995. compared to their levels in 1994. Mexico's economy contracted in 1995, but some recent indicators point to a turnaround Economic output contracted in the third quaner by 9.6% compared to the same period in 1994. On a seasonally-adjusted basis. however, GDP rose by 2.45C from the second to the third quaner. according to the Government of Mexico. • Industrial production grew 0 4 o/c in October after increasing 0.6 '7c in September (seasonally adjusted). This represented the founh consecutive month] y increase Manufacrunng production grew 4.4 % in October after rising 0.3 5C in September (seasonall) adjusted). The Bank of Mexico's survey of the manufacrunng sector suggests a continued increase in production in November and December Output in the hard-hI! constructlon sector declined 7.0% in October compared to September. after nSlng for three consecutive months (seasonally adjusted I After employment and mcome~ fell earlIer in the year. labor markets have recently shown slgm of stren~therung • The open unemployment rate. a narrow rate of joblessness in the fonnal sector. fell to 5 2<;; In December (preluninary data) from 5.8% m November. after peakln~ at ":'6~ In August. On a seasonally -adjusted basis. the open unemployment rate fell from 7 .2 o/c in August to 6.5 C;; In December (preliminary data). • Employment m the fonnal sector has been increasing since August. as registrants in the SOCIal security system (IMSS) rose by 42.000 in 7 Treasur. SecreIary's Repon 10 Congress jaJUUl,! 1996 November. bringmg the total increase since August to over 121.000 registrants . ne~ While uncertainties remain, the economy is projected to recover in 1996 • In its 1996 budget presentation presented in November 1995. the Mexican Government projected that GDP would grow by 3 % in 1996. • In a December survey by Consensus Economics, private analysts forecast that GDP would rise 2 % in 1996. D. r. Banking Sector Developments Banking system, while fragile, continues to restructure Through FOBAPROA. the central bank' s insurance fund. the government has purchased loans from banks In proponion to new capital injected by shareho Iders. • The follOWing banks had been recapitalized before December: Serfin. Probursa. Promex. Intemacional. Atlantico. Bancrecer. Banoro. and Banone. • In December. Banarnex. Mexico's largest bank. announced recapitalization plans. to be completed dunng 1996. • In December. Banco Mexlcano. Mexico's fourth largest bank. was also recapitalized • These ten banks hold 70r; of the banking system's assets. The Invesunent Cmt Program (t'DII. which helps banks restructure pOnJons of their loan portfolios. has expanded the: amount of funds available. • As of January 6. loans totalIng 94 billion pesos had been restrUctured under the vanous L'DI programs The registration penod for the debt relIef program (ADE) targeted at consumer. credit card. small bUSiness. and mongage borrowers has been extended for 8 Treasury Secretary's Report to Congress JalUlllry J996 three months, giving debtors until April 30 to take advantage of the lower interest rates available under the program. The program. which covers about 25 % of outstanding loans. is intended to encourage additional loan restructuring. avoid the development of a non-payment culture. and provide a transitional period for borrowers to restrucrure into UDlS. • As of December 29. 1.5 million accounts, approximately 73 % of estimated eligible accounts. had been restructured. On January 18. the National Banking and Securities Commission announced that beginning in July. Mexican commercial banks should present their financial statements according to international standards. and that public disclosure should be made of assets held by FOBAPROA. Banking system remains under strain The level of nonperforming loans has increased through November. but at a declining rate. The levels reponed at the ends of March. August, and November were lIse. 17%. and I8$(. respectively. • Excluding inten'ened banks and the bank Inverlat (see December 1995 Semi-Annual Repon). and excludmg loans sold to FOBAPROA. the nonperforrmng loan rau() was about 139C at the end of November 1995. The various government programs to encourage loan restrucruring have contributed to the reducuon In the rate of increase in nonperfonning loans. II. g. Financial 'lar~el Trends At the stan of 1996. the pe~{) has strengthened and the stock market has rallied as Mexlco's fmanclal markC=b continued to stabilize following the volatility of October and November. and a~ Investor.- re-opened their books and money began to flow mto the coumr: • After reaching De'" lows In November (closing at a low of NP8.14 on November 9). the peS() strengthened to 7.40 pesos per dollar as of January 29. 9 Treasury Secreran 's Repor. Ja.n.u.a ry 1996 • 10 Congress As of Januan 29. MexIco' s stock market. in peso tenns. was about 33 ~ above pre-crisis levels and about 113 5C above its February 1995 lows: in dollar tenns. the stock market is down about 38 % from pre-crisis levels. but is up about 725C from its February lows. Interest rates have fallen in January. • With a more stable peso. rates decreased to 37.2 % in the January 23 auction of 28-<13y ceres. the benchmark government security. from 46,8 5C in the December 26 auction. In the secondary market, the overnight ceces rate was 34.1 % as of January 29. down from 47% on December 29 and 74.2% on November 14. • Since Januarv. 2. the Bank of Mexico has offered and sold one-vear . ceres in the weekJy auction of government securities. Offerings of this instrument had been disconunued on October 3, 1995. because of low demand. Investor demand In the January 2. 1996 auction was strong. however. With blds worth 2 4 billion pesos received by the BOM. 4.1 times the 500 million pesos mJt1all~ offered Renewed investor mlereSI in emergIng markets and declining global interest rates also contributed to a raJl~ In Brad~ Bonds that strengthened Mexican Issues. • Mexican Brad~ Bond Interest rate spreads over D.S. Treasuries. adjusted to remove the effect of panlaJ collaterahzation. have declined to 7.30% on January 29. 1.207 baSIS POints belo" the 19.37% spread recorded in midMarch 1995 • On January 2': \100d\· . . . In\ e\lor, Service raised its ratim~ for Mexican Brady Bonds. hnn~mf II Inll' hnt" "Ith those of other Mexican sovereign securities - Mexico has junhtr solidifitd us standmg in the international capital markets. The Mexican government and It!- ageocle~ continue to attract new capital in international markeL\ After raising S4 -; billion in the international capital markets during the second half of 1995. the Mexican government began this year with about S2 billion In De" Issues. 10 Treasury Secretary's Rqxm 10 Congress Jaruuuy 1996 • On January 8, the Mexican government announced the sale of DM! billion in notes. At seven years, these notes have the longest maturity of any UMS offering since the December 1994 devaluation. • The issue carries a 10.375% coupon and was priced to yield 484 basis points over Gennan government bonds of comparable maturity (or 491 basis points over u.s. Treasuries when swapped into dollars). Owing to strong investor demand, the offering was increased on January 12 to DM1.5 billion (approximately $1.04 billion). On January 30, the government sold a $1 billion global bond issue in five-year notes. The issue, which will settle on February 6, carries a 9.75% coupon and was priced to yield 445 basis points over the five-year U.S. Treasury. Mexican government agencies have also commenced their international borrowing programs for 1996. • On January 10. Nafinsa. the state-owned development bank, launched the sale of $100 million in 3-year. 9% coupon bonds. • Also on January 10. Bancomext. the state-owned expon finance bank. announced that it successfully sold 5300 million of 180-day commercial paper in the United States. In January, Empresas La Modema. a private expon firm, issued $125 million in three-year bonds. with a 11.375 % coupon. This is the first Mexican corporation to borrow on the Eurobond market since the December 1994 financial crisis. 11 TrtUlSury Secretary's RqxJn J o.rw.ary 1996 10 Congress TABLE 1. Mexican public-sector note and bond issuances, 19% Type Issuer Bancomext CP Datel Amount (USS M) January 10 $300 Tenor 180 days Interest rate LIBORT 2.5~= Naf'msa Eurobond Janu.aty 25 $100 3 years 9~ United Eurobond January 29 OMl,500 ($1,040) 7 years 10.375% Global BoDd January 30 (to settle Feb. 6) $1,000 5 years 9.75% Mexican States 1. Dale of settlement unless otbefWl5e Doted. 2. Discounr to yaeld. ll. h. International Reserves At the end of 1995, international reserves were $15.7 billion, an increase of $9.6 billion from end-l994 and $12.2 billion above their end-January 1995 trough. Aggregate reserves are now In line with several measures of reserve adequacy, at more than th~ months of non-TTUUJuiladora imports, and above 1996 debt amoruzations. In January 1996. in the interests of improving disclosure, the Bank of Mexico began presenting reserve data according to two definitions: the BOM's own legally mandated definition. as previously, and the IMF's definition. The Bank of Mexico's 1996 moneta!)' program states its targets in terms of IMFdefinition reserves (MexIco' s 1996 monetary program was described in the December SemI-Annual Repo") The IMF definiuon of net InternauonaJ reserves (NIR) is different than the BOM definition of r-.1R In the follOWing v..ays' (1) the IMF defininon deducts obhgations to the IMF (neither definition deducts obhgauons for emergency financial support from the U.S. and Canada): 12 Treasury Secrerary's Repon Jarwary J996 10 Congress (2) the IMF definition includes resident dollar deposits, principally deposits of the Govenunent of Mexico with the BOM; and (3) the IMF definition of net reserves includes BOM net claims on other central banks. with terms greater than six months. • As mentioned in the monetary section. these different accounting rules make IMF-defInition reserves much smaller than BOM-defInition reserves. primarily because of the exclusion of liabilities to the IMF. The two NIR definitions also can vary widely due to large, temporary fluctuations in resident dollar deposits. Other differences are relatively small and constant. • A one-time difference is that the proceeds from one large issuance of external debt (the $1.5 billion "dual-note"' issuance that was closed on December 12) were caprured in BOM-defmition reserves in December but not in IMF-defInition reserves until January. Thus, year-to-date changes in BOM and IMF reserves will reflect this difference. Reserves grew in the first three weeks of January (through January 19th) by about $1.1 billion accordmg to the IMF definition and about SO.3 billion according to the BOM definition • Reserves were boosted In the December-January period by several large capital market Issues by the Government of Mexico. • Large end-of-year mterest payments -- including quanerly payments to the V .S. -- accounted for most of the outflows in the period from December to January 19. The Bank ()t ~1exlc() mtervened in the foreign exchange market on December ~9 USlD~ s.;5 million of reserves. 13 Treasury Secreta'" 's Repon to Congress Januar: 1996 Table 2. Mexico's intemationaJ reserves (US$ billions) Bank of Mexico Net International Reserves IMF Net Internauonal Reserves 1992 December 18.6 n.a. 1993 December 24.5 n.a. 1994 December 6.1 n.a. Ql 1995 (end period) 6.9 n.a. Q2 1995 10.1 n.a. Q3 1995 14.7 n.a. Q4 1995 (end year) 15.7 0 January 19. 1999 16.0 1.1 14 Treasury Secrelary'S Repon January J996 m. 10 Congress Disbursements, Swaps. Guarantees and Compensation to the L .S. Treasul!' On January 29. 1996. Mexico repaid all $1.3 billion in outstanding shon-term swaps to the Treasury and Federal Reserve. As of January 31. $10.5 billion remain outstanding under tlus program. all in the form of medium-term swaps. No further principal payments are due until June 30. 1997. (see Table 3 for the amortization schedule of outstanding swaps). • The outstanding total reflects full repayment by Mexico of the $3 billion in short-term swaps -- SI billion on March 14, 1995; S700 million on October 11. 1995: and S1. 3 billion on January 29. 1996. • A total of S13.5 billion in U.S. funds has been disbursed to Mexico under the support program -- $3 billion in short-term swaps and S10.5 billion in medium-term swaps (swap arrangements are described in December 1995 Semi-Annual Report). Of this total. no more than $12.5 billion has been outstanding at one time. To date. the United States has not extended any securities guarantees to Mexico under the support program. Mexico has not missed any mterest payments or required principal repayments under any of the swaps. Through January 31. the Exchange Stabilization Fund (ESF) has received $698 million m interest payments from Mexico for shortand medium-term swaps. The Federal Reserve received $54 million in interest on Its shon-tenn swaps with MeXICO To date. the United States has received about $750 million dollars In Interest payments from Mexico. On January 25. the Department of the Treasury and the Federal Reserve. the Government of ~texlco and the Bank of Mexico. and the Bank of Canada renewed the mululateral ~onh Amencan Framework Agreement (t\AFA). • The f':AFA wa ... estahllshed In April 1994 to complement a series of longstanding bilateral. shl'n-term swap arrangements between the C.S .. Mexico. and Canada The ~AfA provides for enhanced coordination of activities related {(I the~ hllateral swap arrangements. Based on Mexico' s success under the program to date. Treasury acceded to a Mexican request for a sl:\-month continuation to August 21. 1996 of the' implementation penod for fundmg. as provided for under the financial Agreements of February 21. 1995. This action does not represent an extension of new funds to ~exlco by the Treasury or the Federal Reserve. 15 Amortization Schedule of ESF and Federal Reserve Swaps with Mexico Amounl Disbursed tU S Millions) 13.500 QII3rfor Endinil Ma, )1·9') 6.000 Jun 309<; 5.000 Sep·30 2500 Q'} n"f·31·9'i 'ft", " .1,,0 10 Qr. ',I', S"r )0 9'; ()('c ) I ·9/; M.l' 31 91 Jun 30·97 Sl'p.)097 01'c31·97 Ma,·31·98 Shorttcrm IwapI' provldcd on: I 01111/95 01113/95 500 500 CurrentlntcrCllt Ratc' nla 500 1M" 14 I 1 500 nla 1M" I Quarterly Medlum·term Iwapl provided on: 02102/95'" 2.000 I 03114195 3000 nla I 04119/95 3,000 I I 05/19/95 20001 1016%1 130%1 07/05/95 2500 AnnuallY"" 10500 10,500 ..920% 10 H'>%\. 141 .. - -l - -~.- w cr . rb ~ · I I I W 700 (Ocl 1 I . ' H10 n (Jan 1Q, 0 I . 0' 0 () 0 I I 0 0 0 245 I I · ·· a ._-- a- 245" 170" ... 170.. Dec·31·9A 315 .. Mar·)t·99 375 Jun·30·99 .. 375 Sep3~·99 375 750 2"5 245 245 -- -245 245 ~ ~-- Occ·)1·99 0 -- . _. . . .. 2"5 - - --0 .. . 0 0 0 Opc·31·2000 , Sho,ttflrm swap 101als for each pellod represent eqUivalent arnOl/nts for [SF and rederal Reserve .. --, .. - ~- 205" - .. 205 205 ---- -205 . -- 170 130 0 .... - w··· ___ •..'1-- - - "All m('dlum·term swaps payments are due on last date," each calenda, Qua,'P1 "'$2 billion In shorltelm swaps disbursed on Feb,uary 2. 1995 were ,oli('d over lor an additional 90 day perrod on May 3. 1995, and August " 1995. 'or a new maluflty date of October 30. 1995 On October 11. MeXICO repaid $700 mllhon 01 The outstanding S1 3 billion was rolled ove' 10' an addlhonal 90 day pellod on October 30. lor a new malur,ty date 01 J3nU3ry 29, 1996. when they we,e repaid •••• ThiS column represents the sum 01 Quarterly payments til a gIVen year. It does not represent an addlhonal payment 0 _ ~ ~- __ 'V • -- • 0 .. 0 1.65!i _. 995 - -- --- ._------ - --- . -- 0- c: - - rb 3.GO!i 995 -- 995 -995 -~- 1,370 640 - .. 245 4.355 0 0 V'l n ::T rb 995 . 205 .. - - . , " --_. 245 __ ::I 995 205 205 -------.- --.----. 170 ------_. - - -205 -170 205 .. - - - 170 205 - -----.----170 - -._- - - 205 - .. - -0 620 620 620 .- .- ~- -. w .... o 415 .. 0 - _. N' 0 0 . ---~. 170 . 3 .,..... o 0 .. 170 . . • ~ 0 .. -"-_." 305 0 0 0 170 170 245 315" 315 Sep.30·~~OO 0 0 0 245 245 0 0 Sep 30 98 Mar·31·2000 _.- . Jun·30·2000 t u 0 0 Jun·)O·98 Ihese obligations Due (US S million) Repayment' 10 date (bold),' Scheduled Repayment for outstanding balance fUSS mill/on) 88~ Treasury Secrerary's Repon to Congress January J996 IV .. Mexico's Financial Transactions In accordance with the February 21. 1995 Agreements, Mexico has requested. and Treasury has authorized. the use of the funds disbursed to date to redeem tesobonos and other shon-term. dollar-denominated debt of the Mexican government and its agencies. All U.S. funds ($12.5 billion) have been used to redeem tesobonos. V. Status of the Oil Facility Payments through the Federal Reserve Bank of New York account The payment mechanism. established under the Oil Proceeds Facility Agreement. conunues to function smoothly. An independent review in August has confmned that the Mexican oil proceeds fmancial mecharusm is workIng well. Perroleos Mexicanos' (PEMEX) mdependent public auditors. Coopers & Lybrand, analyzed the information utih.zed for the prevIous two quanerly expon repons prepared by PEMEX. and provided a repon to the t:.S Treasury pursuant to the Oil Proceeds Facility Agreement. Their re\'lew revealed that the repons "fairly present" mformauon related to both PB1E.X·S oil expons and the collection of proceeds from such exporu Sunilar reviews Will be performed every six months. As of January 23. 1996. about S"7 4 bilhon had flowed through Mexico's special funds account at the Federal Reserve Bank of New York since the oil agreement went In(() effect In early March 1995. An average of about 525 million flows through the account each day. To date. there have been no setoffs agamst the prllCeed" fwm \1C:XIC0' s crude oil. petrochemical. and refined product expons 17 Mexico has pursued tight monetary policy_ • Net domestic credit was tightly controlled in 1995. 110.000 100.000 90.000 SO.OOO 70.000 60.000 :q 50.000 .Q 40.000 30.000 ~ 20.000 Q. Z 10, 000 O""T1_---1iIRL--I~__liSi...-~~....di~~IL----L.,;....M:l'--...IG:1-.llillC..-&.iL.--Jii;l,;",I..,---J=----II=- 10.000 20.000 30.000 40.000 ---.----...,--50.000 60.000 '--- Monetary Gross InternatIOnal Net DomestIC Base Reserves Credit a:. • Net domestic credit remains tightly controlled this year *. ::j - 50 000 40000 ~ 30000 ! 20000 ~ j '0000 l1_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 0- . \'00001 .20 0001 1 ~E~?~u.~~~~~.~;~: __________~~~~~~,~J~~~~~.~.'~_ --Qz .. ,; C" l (~OOOI ~!-----------------------------------------------Dec 9~ Jan 12 ____________ Jan 19 1996 , "=>01&1.-., I ! Ba~ Ne( IrcernalJOnai Net Domesllc ResElf'Yes Credit - - • Beginning In , 996 Itle 80M NiS CNi~ I!'!o ~flnlllOn 0' NIR to InClude IMF liabilIties ThIS accounting change has 0' r!!'duong NIR ancl rnc reaS1f'19 NOA Base mo~y IS unchanged by thiS accounting adjustment tne ene<1 Despite the effects of recession on revenues, Mexico has maintained a fiscal surplus. • Gains from the oil sector and a VAT increase helped offset sharp declines in other public sector revenues during the first three quarters of 1995. ; 40% : 30% 296% ;. !, 20% e ; 10% M i 0% ! S -10% -0.8% & .,~ -20% ~ -30% -221% I 0011 RevenuesBVAToOther Revenues I • Cuts in real non-interest public sector spending, particularly investment, more than offset higher real interest payments. ~ 80% ... 60% r F 400/0 r 20% ~ : i 00/0 !--_""",--_L....--_ ~ -20% -16.5% ~ -13.9% ~ -40% I J _60%I~_ _ _ _ _ _ _ _ _ _ _~4~7~5~o~~___ D lnlerest ~avments • As a result, the public sector non-financial balance increased compared to the first three Quarters of 1994. IIINon-lnterest DFed Wages DFederal Spending and Benefits· 7 Investmenl 6.3 6 ~ S _C 4 o ;#. 3 2 OL~===== FIfst 3Q 1994 I First 30 1995 OOveralJ Balance_Primary Balance I Thtld Quarter nominal GOP estimated using reported increase in MexIcan CPI. Primary balance equals overall balance less interest payments. Mexico has effectively restructured its short-term dollar debt. .. • The outstanding balance of tesobonos has been reduced by over 99%. OUtstanding Balance Weekly AmortIZations In USSM 10 US$6 Jr 1600 20 10 (l ... and has reconfigured its debt profile. • Maturities of external debt- have been extended. ~ 140 ~ 120 i f S,,84 :J !~.; I 100 'fOr I OBonoe!> I OCete~ I , 80% ! r ~ 80 r ....IIIis 60 ::> ::J~,..,...,.. , ~ i+,!>CDQrv-., • • CY'lQ ~ • Domestic debt- is now mostly peso-denominated: tesobonos are dollar-linked instruments. 60% 40% $ 40 o~----~~------- End 1994 Eno 03 1995 • Ail external publIC sector debt plus tesobonos. o.ved by GOM. plus IMF and US Ilabt/mes of tne Bank of MeXICO EM 1994 Ena 1995 .... Debt held by put:)Jc I ·Alusta~ 0 Tes(X)()IlOS I Mexico's stabilization policies have produced strong results . • Despite a recent uptick, inflation has moderated. O MexIcan Consumer Pnce Index (not seasonally adjusted) 10% ~ 8% en ~ ·5 6% ~ c. E 4% ,g CD 0> 2% c:: ~ U 0°'° Nov 94 Dec 94 Jan 95 Feb 95 Mar 95 AfJf 95 May 95 Jun 95 .A..JI 95 Aug 95 Sep 95 Oct 95 NCN 95 Dec 95 • Nominal interest rates remain well below their March peak. 90 ..... ; 28-day Celes - al..Cllon rate 40'" )()'c :?O'J. 10"~ i _______________________________________________________________ ~i 3:1 • 4~t 3129 3:15 4'12 c. '-"-. J. ~ • f,-•. 7 H' 7.: 9112 8.'15 811 8129 9126 10/9 1117 12/05 1/02 10/24 11121 12/19 111(; High real interest rates reflect tight monetary policy. 30°..., I -. ]00,. 10",. 0"", : i ·100,. , .]00/0 Heal 18-day avg Interest rates .~~~--------------~----~----~~--~~--~~-------------------3.'15 4115 ~1~. 6.15 7:15 &15 9115 10115 11/15 1]J15 1/1~ 3131 4:J(i ~.:l) 6,'30 7131 8131 9/30 10/31 11/30 12/31 1/31 0 ...... ~tn _t: .+-' (/J Q) .c ....CO 0 C) tn > • Q) CO 0 E - (/J CO :::1 '+- -0 Q) +-' 0 0 cf!. Q) "0 CO 0 (,) l.t) ~ 0 en ~ -- a. a. ~I a. ~ L/LO ~lllL ~ 6l/~0 cf!. 61190 lL/90 £l190 vOl90 LL/PO 6ll£0 601£0 OlllO LOllO £L/LO LlilL B~/LO 6L/OL lOIOL £L/60 £l/BO 90/BO ~OllL ::f2. 0 peeJd S/Ple!A T- Q) '"0 . ::f2. 0 l.t) T- BOIL L ~ c:: (,) ro x Q) :E c:: ro 0 0 '"0 ~ Q) c:: c..~ 0Q) '"Oro c..;;:: c....- c:: !:C) en .(j) • 0 N Q) c Q) .r. --.-C) --- > ro .r. 0 '"0 C 0 CD >. CO '- t: tnQ) '"0 (/J E .- ro CD ....Q) 2-0 c..t;: CO ..c c: c: Q) +-' (/J CO '0 ...... o 8 ....... Q) ~ .... N co: E:.o > .- -C~ c: c: (/J Q) O(/J'U III - ~8> Q) -0.- 0 COXa. .... Ill~ Mexico's financial markets have improved markedly since the height of the crisis . • Peso volatility has decreased. Malucan Peso: HIIItoricaI VoIaUIIty ...."...,y' 1995· January 26 1996 • Despite falls in October and November, the real exchange rate is still some 15 % above its Ma rch low. '10 100 0 S' .. 0 g I j Monthly Average :1 : I 70 j 6C - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Oec-g.: Jan·95 Fet>-9~ Met' tr Arw ':I. M. ... Cr A"n 95 ';"'1·95 Aug·95 Sep-95 OcI·95 NQ\(·95 Oec·95 Jan-% • Mexico's stock market is above its pre-crisis levels in peso terms. 130 Nov·94 Oct· 94 Sep-94 Aug 94 Jul-94 Jun-94 May 94 Apr·94 Mar·94 Feb-94 Jan-94 Oec-9 Nov·9 Oef-9 Sep-9 Aug-9 Jul-9 Jun-9 May-9 Apr-9 Mar-95 Feb-95 Jan·95 Oec-94 -... ... -8 ~ ~ ~ - N .... ... c -£ OJ Q) CP ~ ~ • ~ CJ) 8 § 8 gi ... .. o ... .O'l \ .. .... l J ";jCD Oec·95 Nov-95 Co .., ..... en < -en c: CD .., ::l en ,...0 .., Q) CD 0.CD (1) 0) :::l .., cc,... 5"0 -'0 0.3 "0 CD "'Co o _. .. en CD • c: (/l I~ m (/l II CD CD < :::l >< ,...0 o 3 < CD Q:";j 0) 0""" c: en CD ~ en "0 "0 7 ",.",1" /' ..'" " '\ ,) ) •, ./ \ (/l ;::) g o~ .(XI fA c Oef·95 <;"" '. 0 .--..J Sep·95 Aug-95 Jul-95 Jun-95 May-95 Apr-95 Mar-95 Feb-95 Jan-95 Oec-94 Nov· 94 Oct-94 Sep·94 Aug-94 Jut· 94 Jun·94 May-94 APf-94 Mar 94 Feb-94 Jan·94 .(JI 0000 .I:.. 888888u> .W 8:::l m >< Mexico has experienced a sharp recession, although there are some recent signs of an upturn . • GOP. 5% 0% - - -5% % Change from % Change from PreviOUS Year PreVIous Quarter- - • Industrial production. 10.,. 10">. IM~)2;1 * 70~L-----------------------------------------~--~--------------~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ;~~~§~~~J~$~4~~~~~~~~e SA ,n<JICates S6aSOflalty ad/VSlec • Employment and Unemployment. I C-oJJ:O'" 0.- oJJ= --"'"II.=-' .. Nss- I ......., ..... ex 1.GIIDI ... ,. ... e.. 111!1() 11 !>OO 6" !>" ~-. 111!>O c" / ' 11000 3" ....... ~ -,., .. -- .._........... ,...,. 101~ ,'O~~-n--.------------------~--------~--~~~~--~~------------~10~ Dec ,... Jan 95 Feo ~ Ma- ~ AD- 9~ Mav 9~ Jun 95 Jul95 Aug 95 Sep 95 Oct 95 Nov 95 Dec 95 .Sooa/ Secunty System TREASURY omCE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE February 1, 1996 RUBIN HOLDS FIRST MEETING OF COMMUNITY DEVELOPMENT ADVISORY BOARD Treasury Secretary Robert E. Rubin will give the opening address at the first meeting of the Advisory Board of the Community Development Financial Institutions Fund this Friday, February 2 at 9:30 a.m. The meeting, which is open to the public, will be in the Office of Thrift Supervision Amphitheater, 1700 G Street NW. The Community Development Financial Institutions (CDFI) Fund, which was established with bipartisan support, was created as part of President Clinton's initiative to support the private sector's creation of a national network of financial institutions dedicated to community development. The fund represents a new approach to community development that will leverage significant private sector and local resources, lead to self-sustaining CDFls and catalyze new community lending and investment activity by conventional financial institutions. A total of $46.5 million will be available in the first round of funding through the CDFI fund's programs. The amphitheater will be open for camera set up between 8:30 a.m and 9 a.m. -30- Contact: Jon Murchinson, Treasury Department, (202) 622-2960 Bill Luecht, CDFI Fund, (202) 566-6228 RR-848 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 Community Development Financial Institutions Fund Advisory Board The Secretary of Agriculture or his designee; The Secretary of Commerce or his designee; The Secretary of Housing and Urban Development or his designee; The Secretary of the Interior or his designee; The Secretary of the Treasury or his designee; The Administrator of the Small Business Administration or his designee; Frank Ballesteros, Executive Director, PPEP Microbusiness and Housing Development Corporation, Tucson, AZ; Connie E. Evans, President, Women's Self-Employment Project, Chicago, IL; Jacqueline L. Johnson, Executive Director, Tlingit-Haida Regional Housing Authority, Juneau, AK; John A. Litzenberg, Program Officer, Charles Stewart Mott Foundation, Flint, MI; Clara G. Miller, Chair of the Board, National Association of Community Development Loan Funds, Philadelphia, PA; Carol J. Parry, Managing Director, Chemical Bank, New York, NY; George P. Surgeon, Chairman and CEO, Elk Horn Bank and Trust, Arkadelphia, AR; John E. Taylor, President and CEO, National Community Reinvestment Coalition, Washington, DC February 1, 1996 UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 I L" . ~., ~'_, i ~ -( ~) FOR IMMEDIATE RELEASE February 1, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 52-WEEK BILLS Tenders for $18,880 million of 52-week bills to be issued February 8, 1996 and to mature February 6, 1997 were accepted today (CUSIP: 9127942L7). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.62% 4.64% 4.64% Investment Rate 4.87% 4.89% 4.89% Price 95.329 95.308 95.308 Tenders at the high discount rate were allotted 51%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.63 - 95.319 RR-84.9 Received $58,930,987 Acce:gted $18,880,297 $53,392,370 1,038,617 $54,430,987 $13,341,680 1,038,617 $14,380,297 4,500,000 4,500,000 0 $58,930,987 0 $18,880,297 DEPARTMENT OF THE TREASURY ~/78~q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ................................ OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANlAAVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 FOR IMMEDIATE RELEASE February 1, 1996 STATEMENT OF TREASURY SECRETARY ROBERT E. RUBIN The Archer legislation is a constructive step forward. Its enactment would ensure that Treasury will have sufficient funds to make the Social Security and other payments due on March 1. This bill, however, is only a temporary solution to t;1e problem. The debt limit must still be increased on a long-term basis to allow Treasury to honor obligations that the United States has already entered into pursuant to Congressional authorizations. -30- RR-850 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT OF THE TREASURY ..............I1................~~/78~q~ TREASURY NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE Remarks as prepared for delivery February 2, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN COMMUNITY DEVELOPMENT ADVISORY BOARD I want to speak just briefly about the topic of community development. But first I want to say how pleased I am that we have Kirsten Moy directing the CDFI Fund. Kirsten came to us from Equitable Real Estate Investment Management in New York where she developed great expertise in the area of affordable housing and community lending. She has years of experience with the issue of capital access in underserved communities -- which is at the heart of the CDFI concept. The work she's doing for us at Treasury is making an important contribution in advancing the cause of enabling the residents of the inner cities and other poorer areas to move into the economic mainstream. I also want to thank each of the board members for your service. No program of this nature can achieve its full potential without the advice and input from the people who must work with it day in and day out, and policy coordiantion with other departments and agencies. Many of you have come quite some distance for today's meeting, and I appreciate your willingness to serve. As you can tell from the range of organizations and agencies representated on the board, community development is an issue that touches broad areas of our country and broad segments of our economy. It isn't just our inner cities that need the kinds of assistance community development can offer. It can just as easily be a rural area or small town. It can come from the loss of an employer, demographic changes, or even from changes in the international economy. As you might imagine, as Treasury Secretary, with broad responsibility for economic policy, I view each element of our economic program from the perspective of how it fits into encouraging growth in our economy. I am firmly convinced that our economy will fall far short of its potential if we ignore the problems of our cities and distressed rural areas. That's not a social judgment. It is not a moral judgment. It is a hard-headed business judgment about the future economic health of our nation. RR-851 (more) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 The Administration and the Congressional Majority are currently engaged in a debate -- perhaps the most important debate in the past five or six decades -- about how best to prepare our economy for the years and decades ahead. One area of difference within that debate is the issue of human capital. But there is another area of debate which is similarly important, and that is access to financial capital. This is a personal priority of mine. And access to financial capital has been an important element of President Clinton's economic program, a program that has helped our economy grow and create nearly 8 million new jobs in just three years. I want to focus on this issue for a moment because bringing capital to areas that for too long have been forgotten or ignored can create new businesses and jobs, and even restore whole neighborhoods. There are examples to be found throughout the country -- I've seen it first-hand in the South Bronx and in South Chicago, and I know it works. When I in the South Bronx last year I saw the resurgence of housing, not over one block but over an enormous area. And, I talked to business owners who had trouble getting capital, but did get the capital and are building businesses and creating jobs. The turnaround in this area, and others like it where attention has been focused on economic development, is impressive. There are several ways to encourage greater capital access, the CDFI Fund is an important example. You're well aware how it works -- loans, grants, equity investments with community-focused banks, credit unions, loan funds, microenterprise lenders and the like. These entities in turn make the loans and investments that help small businesses and build housing, and these entities help people find jobs and give them technical help starting businesses. Moreover, the fund offers incentives to mainstream financial institutions to more fully involve themselves in community development activities. Three years ago this project had broad bipartisan support, but it would have been defunded by the fiscal 1996 reconciliation bill the President vetoed. Some $50 million has previously been appropriated for the CDFI fund, and we've gotten a bit more in the current CR -- but even together that is far, far too little for such a promising program. Kirsten tells me that the CDFI Fund investment program drew over 260 applications totalling over $300 million in requests for assistance, and there were at least 50 applications for the Bank Enterprise Award incentive program. That's a remarkable response. I hope down the road we can convince Congress of the critical role the Fund can play in development. We should not let the Fund, grounded in an empowerment response to the problems of our distressed communities, be destroyed. You should also know that in my conversations with mayors and local businessmen around the country, I have noted that cities and businesses can join together in investing in local community development funds, helping to bring jobs and growth to their communities. 3 There are other ways to help bring capital into areas that have long been underserved, or not served at all. We have reformed the regulations for the Community Reinvestment Act and protected the act from attack. We are launching a new microenterprise lending initiative. And, as the President announced in the State of the Union, we're proposing a new tax incentive to clean up brownfileds in distressed areas. Each of these can play an important role in broadening economic development. As I said at the outset, economic development in distressed areas is high on my agenda, and I consider the CDFI Fund a critical way to broaden capital access in areas which need it. I welcome the opportunity to receive your input on these issues through the Advisory Board. -30- DEPARTMENT TREASURY OF THE TREASURY ~J78~9~. . . . . . . . . . . . . . . . . . . . . .. ........................ OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 Text As Prepared for Delivery 1 p.m. PST February 2, 1996 TREASURER OF THE UNITED STATES MARY ELLEN WITHROW REMARKS TO THE ASSOCIATION OF RETAIL TRAVEL AGENTS INTRODUCTION OF 1996 SERIES CURRENCY ANAHEIM, CALIFORNIA Thank you for inviting me. I have a wonderful job. I manufacture money. Later this winter, our currency will change. Here in the United States, this will hardly be noticed because the introduction begins with the $100 bill. But over the next few years all denominations will be redesigned. When we finish they will look like a family. Much has been written about the change and the reasons behind it. So this morning, I want to talk about this redesigned $100 bill. Ben Franklin is the person whose portrait is on the $100 bill. He is a pioneer in the protection of our currency, and he's a wonderful symbol for our currency redesign efforts. In 1736, when he was commissioned to print the currency for colonial New Jersey, he took a leaf from a tree -- with its unique pattern of veins -- and transferred the leaf's image onto the paper the money was printed on. The New Jersey currency with its prominent leaf image could not be copied even by the most skilled engraver. In 1775, the Congress issued continental paper money to finance the war for independence. These bills began to depreciate due to excessive supply and considerable counterfeiting. Once again, Ben Franklin came up with a simple, yet ingenious, way to tell the authentic bills from the counterfeits. On real continental bills, he deliberately misspelled "Philadelphia" to differentiate his work from that of the less creative counterfeiters. In an era of rapid growth in technology and science, we are facing new challenges in maintaining the security of our currency. Today, currency is being redesigned to stay ahead of printer, copier, scanner and computer technology. Let me briefly describe the changes we are making. RR-852 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 First, some things will stay the same. The redesigned currency still will look very "American." The size and colors (black ink on the front and green ink on the back), the subjects of the portraits and monuments, the paper and the signature will all remain. Now, what will be different. At the front of the bill, the portrait is larger with more detail that is harder to duplicate. Also it is moved off-center. The watermark -- depicting Ben Franklin -- is visible from both sides when held up to the light. Other features include: • Color shifting ink -- the" 100" in the right-hand corner looks green and shifts to black when viewed from an angle. • Microprinting -- is in the $100 bill, in two places: "USA 100" is microprinted within the" 100" in the lower left-hand corner, and "United States of America" is on Ben Franklin's collar. • Security thread -- the words "USA 100" on the thread can be seen when held up to the light, and when put under an ultraviolet light it has a reddish glow. • Federal Reserve Indicators -- a new universal seal represents the entire Federal Reserve System. A letter and number beneath the left serial number identifies the issuing Federal Reserve Bank. None of the currency now in circulation will be recalled as a result of the new bills. Contrary to what you may have heard. The existing and new currency notes will both be in circulation and both will be honored. The United States has never recalled its currency and will not do so now. Until this year, the last time our paper currency underwent a major change was in 1929. Then we had only $5 billion of paper currency in circulation. Today, we have close to $400 billion with about two-thirds of it outside the U. S. Our currency redesign task has involved the Secret Service, the Bureau of Engraving and Printing, the Treasury Department and the Federal Reserve all working together since the 1980' s to bring us to this point. Although a great deal of research and development went into this effort, it was Lloyd Bentsen, when he was Secretary of the Treasury, who moved the plans forward. Current Treasury Secretary Robert Rubin, in September of 1995, approved the final design. 3 Later that month, Secretary Rubin, Alan Greenspan, the Chairman of the Federal Reserve Board and I unveiled the first of the redesigned currency notes, the $100 bill. The announcement was well covered by the international and domestic press. Since that day, we have been working hard to inform users of U.S. currency about the upcoming changes with an extensive Public Education Campaign. Pamphlets -- like the ones given to you today -- describing the new currency have been translated into twenty languages. To supplement the brochures, we have videos, training materials, cash register stickers, and statement stuffers that will be distributed with the help of the Federal Reserve, U.S. Embassies, and various industries. On a personal note, when I traveled to the Far East in June and recently to Finland and Norway -- to launch the 1996 Atlanta Olympics Program -- I also had the opportunity to talk with officials about the currency redesign efforts. I encountered a great deal of interest overseas. In addition to our national and international education efforts, the actual production of the redesigned $100 bill is taking place. We will be printing and stockpiling these notes before they are introduced into circulation. This will ensure that there are adequate supplies to meet both the international and domestic demands. In 1929, they had what was called "the curiosity factor"; people wanted to see what the new currency looked like. We are anticipating the same interest this time, and we will have ample supply. Introduction of the new note -- and eventually the other denominations -- will be the joint responsibility of Treasury and the Federal Reserve. Every Federal Reserve Bank -- all of the 12 District Federal Reserve Banks and their 25 branches -- will be provided inventories of the new $100 bills. On a certain day, redesigned currency will be available to commercial banks. As the old $100 bills circulate back to the Federal Reserve -- in the regular course of business -- they will be taken out of circulation and destroyed. The depository institutions will be given only the new $100 bills to put back into circulation. For many people around the world, currency changes are commonplace. For the United States, a currency change -- especially one that entails substantial modification -- is extraordinary. As I mentioned above, the U. S. currency has not undergone a significant redesign since 1929. So why now? To protect our currency. Seeking security for our currency is as old as the history of our nation but today' s technology has made it all the more necessary. It's not surprising that the world's most used currency is the target of counterfeiters. Let me reassure you that our Secret Service does a wonderful job. Nevertheless, there will always be some people who will try to make a quick dollar -- literally -- by counterfeiting their own. 4 The Secret Service has been very successful in making sure that most of it never gets through to the general public. The Service and its law enforcement partners seize a 90 percent of known counterfeit bills before they reach the people in the street. The number of counterfeit bills is one-hundredth of one percent of our circulating currency. As I mentioned earlier, the amount of currency in circulation is close to $400 billion. Defense against counterfeiting has always been one of our nation's pnonties. Benjamin Franklin mounted a defense in colonial times, and we must continue to protect our currency today. I am very pleased to be working with the Secret Service, the Bureau of Engraving and Printing, the Federal Reserve, and Treasury. I want to underscore our commitment to ensuring a smooth transition to the new series. Our goal is that neither people nor institutions will be seriously inconvenienced. I want to thank you for inviting me to speak to you today. As influential members of your community and profession, I hope that you will share this vital information both with them and the rest of the world. It is a very exciting time to be Treasurer of the United States. -30- UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 i :' FOR IMMEDIATE RELEASE February 5, 1996 j~:'; CONTACT: Office of Financing I . j . ) '..i,) i J J r 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $16,444 million of i6-~~e~ bill~ to be issued February 8, 1996 and to mature August 8, 1996 were accepted today (CUSIP: 9127943C6). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.77% 4.79% 4.79% Investment Rate 4.97% 4.99% 4.99% Price 97.589 97.578 97.578 Tenders at the high discount rate were allotted 33%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $61,014,222 Accepted $16,443,724 $53,669,330 1.357.192 $55,026,522 $9,098,832 1.357.192 $10,456,024 3,900,000 3,900,000 2.087.700 $61,014,222 2.087.700 $16,443,724 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.78 -- 97.583 RR-853 UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE February 5, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $16,210 million of 'l~-week bills to be issued February 8, 1996 and to mature May 9, 1996 were accepted today (CUSIP: 912794Y65). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.86% 4.88% 4. '88% Investment Rate 5.00% 5.03% 5.03% Price 98.772 98.766 98.766 $1,000,000 was accepted at lower yields. Tenders at the high discount rate were allotted 90%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $56,610,959 Accepted $16,210,440 $51,302,577 1,626,472 $52,929,049 $10,902,058 1. 626,472 $12,528,530 3,548,010 3,548,010 133,900 $56,610,959 133,900 $16,210,440 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.83 - 98.779 RR-854 4.87 - 98.769 DEPARTMENT OF THE TREASURY TREASURY OFFICE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.. 20220. (202) 622-2960 FOR IMMEDIATE RELEASE February 5, 1996 Contact: Chris Peacock Darren McKinney (202) 622-2960 SIMPLIFIED REPORTING SYSTEM BENEFITS BANKERS AND LAW ENFORCEMENT A new regulation announced Monday will aid criminal investigations while significantly cutting costly and burdensome paperwork for America's banking community. The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency (OCC), along with the Federal Reserve Board, issued final rules that simplify and streamline the process by which banks report suspicious activity to law enforcement. The new rule replaces six overlapping systems with one central reporting system that bankers project will reduce related paperwork by 80 percent. The single system will provide more than a dozen federal law enforcement and regulatory agencies simultaneous access to Suspicious Activity Report (SAR) information and allow for more comprehensive analyses of trends and patterns in financial crime activity. Such activity can include bank fraud, money laundering, embezzlement, check kiting or misdeeds by bank officials. "Preventing and deterring money laundering and bank fraud have always been and will remain our goals as we work to develop reasonable, effective and cost efficient rules," said Treasury Secretary Robert E. Rubin. "This simplified reporting system is a major achievement resulting from Treasury's firm commitment to constructive cooperation among the financial, regulatory and enforcement communities." Since the early 1980s, banks have been required to file reports to alert regulators and law enforcement personnel of possible criminal activity affecting or conducted through those institutions. The banks reported these activities by filing multiple copies of Criminal Referral Forms with their respective federal regulators and law enforcement agencies. Banks were also encouraged to report RR-855 (more) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 suspicious transactions by marking a "suspicious" box on another form, the Currency Transaction Report . Under the new regulation banks will be required to send only one SAR form to a single government agency-FinCEN. SARs may be filed in paper or magnetic format, and the information will be input into a single database. FinCEN will manage the computer system, coordinate the information and make it available to law enforcement and regulatory agencies. FinCEN Director Stanley E. Morris said, "If we are to deter criminals from using banks illegally, the capcity to identify suspicious activity cannot be impeded by burdensome reporting. The new procedures will enable financial, regulatory" and law enforcement authorities to work smarter; everyone benefits." The new Treasury rule is issued under the authority of the Bank Secrecy Act, the core of Treasury's anti-money laundering efforts. It is to be published in the Federal Register Monday and become effective April 1, 1996. The rules of the Federal Reserve Board and the OCC are issued under the independent supervisory authorities of those agencies. The Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration are expected to take similar actions in the near future. ### THE WHITE HOUSE Office of ~he , Press Secretary , February 5, 1996 PRESS BRIEFING BY TREASURY SECRETARY ROBERT RUBIN, CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISORS JOSEPH STIGLITZ AND OFFICE OF MANAGEMENT AND BUDGET DIRECTOR ALICE RIVLIN The Briefing Room 1:43 P.M. EST DIRECTOR RIVLIN: Good afternoon. I'm very pleased to present today the first installment of the President's 1997 Budget. With me today are the Chairman of the Council of Economic Advisors Joseph stiglitz, and the Secretary of the Treasury Bob Rubin and you'll hear from them in just a minute. Now, this has been a very difficult year in which to make a budget -- in part, because the budget for the last year is not yet finished. Normally, we would be presenting to the Congress and to the cc~ntry the full details of the President's 1997 budget today; but we have not finished work on 1996. The Congress did not finish its appropriations, some of the bills have been signed, some of them were unacceptable to the President and been vetoed, and some of them have not yet come forward. Perhaps more important, the President and the Congress have been engaged in active negotiations over a seven-year balanced budget plan. Those negotiations have made major progress. The discussions have revealed that the two sides have common savings, which would be sufficient to balance the budget and to finance a small tax cut, but there are still differences, especially over Medicare and Medicaid and taxes, differences in the numbers and differences in policy. Now, we had hoped that we would have the seven-year budget deal concluded before launching into the President's Fiscal 1997 budget and that it would fit within that context. But that has not happened, and the statutory date for the President submitting 2 the 1997 budget has arrived. It is, indeed, February 5th and, more important, the Appropriations Committees are gearing up to start into the next round of appropriating. Therefore, it seemed appropriate to do a two-part budget. We will give the aggregate numbers today, and in the middle of March, the week of March 18th we will del~ver the next installment, which will have all of the details about the various departments' budgets sufficient for appropriations. The important features of this budget are that, first, it does get to balance. It cuts spending in all the major categories of t~e budget, Medicare and Medicaid and the other mandatory prog~ams and discretionary spending by very significant amounts and =eaches balance over the seven years on the Congressional Budget Office's own scoring. But the cuts are not so deep that they endanger our commitment to low-income children, to seniors, to people with disabilities, and other vulnerable people. They also preserve room for the programs that need to grow for education and training, and science and technology, and for protecting the environment. The budget funds a modest tax cut for people that need it most, for people who are raising children and those Who need to invest in education and who want to save for the future. We have modified our tax cut slightly, and Bob Rubin will discuss that with you in a moment. This is the first time that an administration has attempted to present a budget on two sets of economic assumptions at the same time -- our own economic assumptions, which Joe Stiglitz will tell you a little bit more about in a minute, and the Congressional Budget Office's assumptions. We present our budget not only as scored by OMB, but as we estimate it would be scored by the CBO. Now, they have not looked at our budget as a whole; they have seen pieces of it. So when they do the full scoring of the whole budget( they might differ slightly, but we believe that this is a substantially accurate representation of what the CBO would do. So having two sets of tables makes basically one major pOint. This budget reaches balance by 2002; indeed, has a small surplus under the congressional indeed, has a small surplus under the Congressional Budget 3 Office assumptions. Under slightly less pessimistic OMB assumptions, we would be very close to balance in 2001 and would have a very significant surplus in 2002. That surplus we estimate now -- and all these estimates are very uncertain -- would be $92 billion if there were no tax cut in the last two years. That clearly yields a fiscal dividend. If the economy is doing better than the CBO says, there will be money to do other things with. And our budget has a trigger mechanism in it that says if by the year 2000 the economy is doing better than the CBO now estimates, then the tax cut will be extended. If it's doing $20 billion better in the year 2000 than CBO now estimates, the tax cut would be extended. If it is doing even better than that, there would be money added back to discretionary spending. And even without use of the fiscal dividend, we estimate that the budget would be in surplus by about $39 billion in the year 2002. Now, let me yield to Joe to tell you something about the economic assumptions. DR. STIGLITZ: Well, this budget document includes the administration's new economic forecast. Overall, we believe that we will continue to see noninflationary growth with low unemployment. Over the past three years, our economic performance has been excellent. After a slow start in 1995, we saw a solid GOP growth with strong investment, robust employment increases and low inflation. We expect this strong economic performance to continue. Let me come now to describe in more detail the economic assumptions. Our forecast assumes the budget will be brought into balance by the year 2002 using the CBO framework. We project real GDP to grow at 2.2 percent to 2.3 percent, which reflects capacity growth under the chain-weighted measure. These numbers are lower than our midsession review forecast, but this is more than fully accounted for by the shift to chain weights. Our real growth assumption is very close to the blue chip for 1996 and 1991 and to CBO's December estimate for the entire 1996 to 2002 period. Consistent with our forecast of continued expansion of the economy's potential, we believe that inflation will remain low and stable. We project the CPI will increase by 3.1 percent in 1996, declining to 2.8 percent by 1998. This decline reflects the technical adjustments announced by the Bureau of Labor Statistics. Given the outlook for moderate inflation, we project the chain-weighted GDP deflator to grow at less than three percent over the forecast period. Combining this with real GOP growth figures, leaves us to project nominal GDP growth to 5.1 percent over the forecast horizon. These are the GDP figures reported in the budget. We project that the unemployment rate will remain low at about 5.7 percent throughout the entire forecast period. We have recognized that evidence increasingly suggests that the unemployment rate, consistent with stable inflation, has moved down. The combination of low inflation and the movement to a balanced budget by the year 2002 creates a very favorable environment for interest rates. Short rates are expected to fall, leveling off at four percent. We also see the ten-year rate falling over the next three years and leveling off at five percent in 1998. This term structure reflects the historical experience in periods of low and stable inflation. In conclusion, let me say, for the past three years the economic projections of this administration have consistently been on target. Comparisons of our earlier projections with the economy's actual performance show only small differences. If anything, we have been too conservative. We have consistently underestimated real GDP growth and increasing jobs and overestimated inflation, interest rates and the budget deficit. We believe that the economic assumptions presented in this budget are similarlY sound and realistic, and they're in line with the forecast blue chip private forecasters and the Congressional Budget Office. Finally, as I said at the beginning, we believe the outlook for the economy is good. The government shutdown and the blizzard that closed most of the eastern United states may have some dampening effect on the economy in the first quarter. But although we may see some variations in growth quarter to quarter, the economic fundamentals are sound and conducive to steady growth with continuing job creation and low inflation. Let me turn to Secretary Rubin who will talk about the tax portion of the budget. 5 Q One question before the Secretary starts. Your numbers on inflation are not the same as t~e numbers that are published in the book. DIRECTOR RIVLIN: MR. STIGLITZ: table. There was a typo. There was a typo -- DIRECTOR RIVLIN: That's why we're distributing the SECRETARY RUBIN: Thank you, Joe. I will briefly describe the President's -- the component of the budget that's consistent -- tax cuts and also savings as a result of loophole closers. Basically, as you know, the President's tax cuts are oriented toward the middle class, designed to help middle class raise their families, to save and to send their children to college. These cuts are good for members of the middle class, and they're good in terms of the incentives they create with respect to people's behavior and the effect of that behavior on economic growth. Let me say a word about the debt limit before I go on to the tax cuts, because I think last Thursday was really a very Significant day in this ongoing process. First, the congressional leadership sent the President a letter committing to pass an increase in the debt limit acceptable to both the President and the Congress before the end of this month; second, Congress took a constructive step by passing legislation which empowers the Treasury Department, authorizes the Treasury Department to issue $29 billion worth of debt outside of the debt limit, which assures the payment of Social Security and other benefits March 1st and shortly thereafter. These steps, as I said, are constructive, and I think Th~rsday was a very constructive day in this process. This will permit us to get through the March 1st crunch. Now we need to put in place a long-term debt ceiling increase that will take us through at least the next year and get this issue off the table. Having said that, let me turn to the tax cuts. The President's tax cuts amount to $130 billion. First, we have the middle class tax cut package, which Alice briefly described. It's a $500 child tax credit, S10,000 deduction for education, training expenses, and expansion of the IRAs -- the indiVidual retirement accounts. Second, this package contains three provisions included in the President's balanced budget offer to help small businesses grow, employees save for retirement and family 6 businesses and family small farms to remain in the family in the event of the death of the owner; family-owned small business and family farm estate tax relief to address t~e cash flow problems that occur when the owner dies; an additional increase in small business expensi~g from $17,500 to S25,00C -- which was the amount the President originally proposed in his 1993 budget. And, third, pension simplification, including a special program for small businesses called NEST. Third, as the President announced in the state of the Union address, there is a program in the budget to incentivize companies to resuscitate abandoned industrial sites in economically distressed areas, both rural and urban, that are known as brownfields. This is a roughly $2-billion incentive and we will work in the week ahead with mayors, the EPA and affected communities to develop the details. Fourth, the budget would increase the deduction for health insurance expenses of self-employed individuals from the current 30 percent to 50 percent by the year 2000. There is also a package of tax loophole closers and compliance measures. As in the President's original 1996 budget, this budget contains tax reforms to close loopholes that benefit Americans who renounce their citizenship and reforms the taxation of income for foreign trusts. This budget also saves $46 billion by limiting corporate and other loopholes and improving tax compliance. And, finally, there is $5 billion in EITC and related compliance measures and improved targeting. To conclude, as Alice said, the budget balances in seven years. It contains targeted modest tax cuts to help middle class families, small businesses and family farms struggling to be effective to keep ahead in today's economy, and it contains tax reforms that will make the system fairer and more efficient. Thank you. DIRECTOR RIVLIN: Happy to have questions. Q For Mr. Stiglitz, the growth projections seem very modest. And I was wondering if you could explain what factors do you see encouraging economic growth and what factors are you seeing dampening growth. DR. STIGLITZ: The forecast is really inconsistent with where most other private forecasters are and with the CBO. The numbers look low mainly because we've switched the accounting fr~~ework, the way we calculate the numbers -- this is the new chain-weighted numbers. 7 Q What does that mean, chain-weighted? DR. STIGLITZ: Well, the way it used to be -- let me explain how it used to be. It used to be that to calculate the GDP, you use the relative prices of a particular year -- that's a fixed weight -- use 1987. And what happens is that over time those relative weights that you associate with different goods get out of line. And there are periodic revisions -- 1987 -then we were going to go to 1992 this year. But instead of doing this periodically, which causes lots of disruption, what we're doing now is having what's called chain-weighted. So every -you continually change the weights as time moves on. And when you do that, you get lower growth numbers. The main reason that the numbers look lower than they did before was because of computers. Q But can you explain the factors you're seeing going into the economy now? Q Because of the computers? DR. STIGLITZ: Yes. The computer prices that were used were the '87 prices, and the computer prices have come down a lot. So when you bought a computer, they used the prices that computer would have bought if you could have bought it in 1987. So these are technical issues, but they do have a big effect on how you estimate GDP. The factors that contribute to strong economic growth -- we see continuing strong investment and we also see continuing strong export growth. Last year, we had a strong export -- and over the last three years, exports have grown 30 percent, which is really remarkable for a country at our stage of development. Last year, we had a very strong export growth in spite of the fact that three of our major trading partners had weak economies. We're expecting Japan and Mexico and Canada both to have stronger years and that will feed back to us in stronger export growth. Q Then where do you see growth? see dampening growth? What factors do you MR. STIGLITZ: Right now, we're going through a phase of there is a slight inventory overhang, but it's relatively mild, and that may mean the first quarter will be a little bit 8 weaker. Also, the weather and government shutdown have had a slight -Q -- go through the long-term projections over the next ten years MR. STIGLITZ: We really are p=ojecting the economy to continue to grow at its potential capacity over the intermediate run. Joe, your inflation numbers seem perhaps a little bit high. Is that why you're pessimistic, or at least not as optimistic as some about three-month T-Bills? Q DR. STIGLITZ: The inflation rate is for the whole year. It's fourth quarter over fourth quarter. The numbers last year had in them the fact that oil prices went down, or actually they went down, so that dampened the overall rate of increase of prices. So what we're working off is what is called the core rate of inflation which is the rate of inflation ignoring the highly volatile areas of food and energy. So it's basically a forecast of stable inflation based on the core. Q Why do you not think that at least short-term rates would go down even faster? I mean, you're only talking about a tenth of a percent below where we are right now anyway. DR. STIGLITZ: These are conservative estimates as we said all along, and We wanted to err on the side of conservativism. Q Did you take into account the recent Fed action when coming up with this number? DR. STIGLITZ: We don't try to microscopically predict What's going to happen, meeting by meeting, of the Fed. We are trying to give a broad picture of what Q Q or whatever? -- when was your -- You factor it into your calculations as a baseline DR. STIGLITZ: We factored in that there would be a monetary response to the fact that we have a credible deficit reduction package, yes. (Laughter.) 9 Q Mr. Secretary, what happens after mid-March? Do you go back and plead your case again? Is this going to happen month to month :or the rest -~ into infinity? SECRETARY RUBIN: Well, the leadership sent the President a letter on Thursday, as I mentioned, in which they said, they committed to pass a debt ceiling increase by the end of this month as acceptable to both the President and to Congress. I think that should be for a year. It should get this debt ceiling problem out beyond the presidential election, and then we won't have to worry about it, get it off the table and get it out ot this political season. That's what should happen, Helen. What will happen, I don't know. Q sut you can't convince the~ that they should go to the -SECRETARY RUBIN: Oh, I think they were in a very constructive mode last Thursday, and I think that we should all work together in that respect -Q Mid-March is constructive? SECRETARY RUBIN: No, no. Mid-March was a temporary --no, mid-March was constructive because we had a crunch on March 1st as we discussed many times. And they weren't coming back until February 26th. So to avoid that crunchy time, they moved it out to the middle of the month as you say. Q Mr. Secretary, does this new set of Medicare indicate a worse depletion than you might have thought sO far in the Trust Fund? Are you for a more extensive set of reforms in that program than you've been willing to accept? n~~ers SECRETARY RUBIN: Q I think they argue -- If not, why not? SECRETARY RUBIN: Yes, I think they actually argue just the other way. I'm chairman of the Part A Trust Fund, as you may know, and I think what they argue for is putting in effect the proposal the President has put forward, which are Medicare savings that, roughly speaking, parallel a group of Medicare savings the congressional majority has suggested. r think we should get them done, and get them done now so that we can advance the exhaustion date out to the 2011 that the President's program was projected to accomplish. 10 Q What, if any, impact do these new numbers have on your thinking, if any? SECRETARY RUBIN: I really think the impact is exactly what I just said. What it means is it is imperative that we get Q That you would do what you were going to do, anyway. SECRETARY RUBIN: It is imperative that we get done the program that the President put forward so we can take the exhaustion date -- which was 2002 or 2001, I've forgotten which -- and get it out to 2010, 2011, which is what the present program was designed to do. Q How long has the a~~inistration known that Medicare Trust Fund was going to suffer a deficit and not a surplus this year? SECRETARY RUBIN: I just heard about this -- Alice, do you know the answer? This was not something I had known about before. DIRECTOR RIVLIN: Today is what I heard. SECRETARY RUBIN: Yes. My first knowledge of it was today. Q You first found about it in The NeW York Times; is that what I'm led to believe here? SECRETARY RUBIN: It's actually a very good paper; you should read it. (Laughter.) I mean, there are a lot of other good papers, too, I didn't mean to -- it was not a relative comment. Q If I could ask, then, why is it that the administration did not know this, especially since there were sensitive budget negotiations going on for a couple of months? SECRETARY RUBIN: There may well have been people who, in analyzing this, were familiar with it. I learned about it today. But I don't think it matters. I think the essential point is precisely the same. It simply makes more imperative what the President said all along: We should put in place these Medicare cuts. And since these cuts, roughly speaking, parallel cuts that the Republican majority could agree with us on, we should get this thing done and get it done now. 11 Q Just to follow-up en that, though. It sounds, though, as if what needs to be done is a lot more stringent than you're advocating. And the Republicans have been saying all along that you haven't pushed hard enough and you haven't cut deeply enough. And it sounds like even they haven't done enough. SECRETARY RUBIN: No. Well, there are two problems, as you know. One is the problem right now of getting the exhaustion date extended from 2002 to 2011; the President has projected his program would take -- maybe now it takes to 2010. I don't know -- I was told -- it probably still goes to 2011. That you can accomplish by putting in place the President's program and doing it now. The question of what kinds of structure reforms you want for the long-term in order to address a much longer-term Medicare problem is something neither the congressional majority nor our program addresses. But what both our programs address is providing plenty of time for that to be done on a bipartisan basis. So I think it comes back to my answer to Brit -- what this says is get this done and get it done now. Q But you've underestimated how much money there is. Why do you think that your estimates will hold up over what your cuts will provide? SECRETARY RUBIN: Let me take a one-second answer and let me let Alice -- we've been advised by Bruce Vladeck at HCFA, and I believe he is actually going to do some kind of a press discussion today, that he still projects that this will -- that the President's program will provide an extension of the exhaustion date of the Medicare Trust Fund out to 2011, or maybe it's 2010 now, I'm not sure, which gives us -- a, it extends it out further than the average extension has been during any period of time the Trust Fund has been in existence; and secondly, it extends it out a multiple of the number of years you need to put in place the true long-term fixes, which neither of our program provides. DIRECTOR RIVLIN: Well, let me just reemphasize, the President is proposing a set of cuts which ~educe the rate of growth of Medicare and protect the Medicare Trust Fund. They are virtually the same cuts that the Republicans are proposing. And it is -- they are proposing more than we are, but the point is that we have agreement not just on the minimum number but really on the policies. 12 When you look at what you need to do to slow down the rate of growth of Medicare, especially hospitals, which is what we're talking about in the Trust =und, the policies are not very numerous that are available. They are changing the reimbursement rates, the so-called updates for the various provider categories, especially the hospital update. We are all agreed that has to be done. Now, why don't we just do it and that would solve this problem for a good long time. Q Mr. secretary could you explain the phase-in, as you call it, of the middle class tax cut, both the $500 credit and the $10,000 in terms of when middle class families could actuallY see some of these benefits? What time would the full $500 kick in and the full $10,000? SECRETARY RUBIN: The effective date on the tax cuts would be January 1, '96. My recollection is the child tax credit starts at $300, and I believe in the fourth year goes to $500, and the education starts at $5,000 and goes $10,000 also in the fourth year. Q Which means you might not get to full numbers if, by 2000 you cut off the -- SECRETARY RUBIN: They trigger off in the last two years, as you know, so you get to the full numbers. by '99, Q But if you started in '96 and the fourth year then, you would have both of them in full swing? Right. SECRETARY RUBIN: You've got it. It would be '96, '97, '98, and '99. Q There seems to be a -- on the r.umbers on the tax cut -- you said it was $130 billion package. SECRETARY RUBIN: Q Right. Correct. OMB says it's a $99-billion package on their handout. SECRETARY RUBIN: Well, that's the trigger, and there is a reconciliation on one of these pages, but I don't remember where it is. 13 Q Okay, the second question, s~~e point, you said I think $46 billion for corporate loophole closing, and they say $59 billion? SECRETARY RUBIN: Yes, there a=e three pieces to that. There's $46 billion, which is the corporate loopholes and similar matters, there is about $7 billion of additional very similar kinds of loophole closures that were in the original budget, and then there's $5 billion that relates to EITC and some very closely related savings there that corne fundamentally from making the system work better. So that would be a total of $58 billion, and it rounds off to S59 billion somehow or other. Q Mr. Secretary, Mr. Archer last W~€;: suggested the idea of raising the debt ceiling through October, the fiscal year. Is that adequate to respond to yo~r concerns up through the end of the year? SECRETARY RUBIN: I think that Mr. Archer really played a very constructive role last week. I think that the debt -- in proposing legislation that passed, I do think the debt ceiling should be taken out beyond this calendar year, because that gets you beyond the presidential election, it gets beyond this political period and gets into next year. But that's something we'll all have to work on as we go forward. But I think the most important thing is I think Chairman Archer did playa very constructive role at the end last week. of Q But does the idea of through the end of the fiscal year cover you, in effect? SECRETARY RUBIN: No, because the end of the fiscal year takes you to October 1st, and the presidential election is still in November. So you've got the one butting up against the other. I think we should try to get it out beyond this calendar year into next year and get it beyond this political season. Q I'm talking more about the extraordinary measures that you've been taking to keep the government in the money? SECRETARY RUBIN: Well, that's a different issue. What we have said with respect to the extraordinary measures is that -- and you all probably have the letter that we sent to Speaker Gingrich, the Majority Leader and House Majority Leader 14 -- that the measures that we have available to us would have taken us through either February -- both available to us legally and which we deem to be prudent would have taken us through either February 29th or March 1st. We weren't quite sure which because these n~~ers are difficult to project with accuracy. That problem, fortunately, has been mooted by the legislation that was passed last week and in some ways, even more importantly, by the letter that the leadership presented to the President on Thursday. Q Dr. Rivlin, if you're trying to balance the budget in seven years, why do you increase discretionary spending in 1997? Wouldn't it make more sense to keep it all along on a freeze rather than -- I mean, some people might say you're increasing the spending just because it's an election year. DIRECTOR RIVLIN: Some people might. But that's not the reason. The reason is that we want to protect the programs that we really think are necessary to grow the economy and to protect the environment. And while we are downsizing the government generally and are continuing to do that, you can't do it too fast. We need to get systems in place that will make it possible to run the ordinary functions of government more efficiently and with less money. Q The governors think that they may be on the verge of a breakthrough in three areas on the budget -- Medicaid, welfare and the third category of employment and training. From what you know of the work they've done, how likely do you think it is that something that would really make a difference is going to emerge here? DIRECTOR RIVLIN: I think they've made a lot of progress and I was with the President this morning when we I was with the President this morning when we listened to their report of the progress that they had made. But they have not presented a plan yet, and we can't tell exactly what the details are or how we would react to it. Q But if they do in fact agree on these state-administered programs in a bipartisan way, which they would have to with a 75 percent requirement, WOUldn't that carry an awful lot of weight with the White House? DIRECTOR RIVLIN: That would be very helpful. But the President and the Congress still have to work this out. They have made a lot of progress, too. I think we are narrowing the differences. But it is very important to the administration to 15 make sure that we are not undercutting the populations for whom these programs are designed, who are the most vulnerable people in the country; and that we also give the governors a great deal of flexibility, but don't just give them a blank check. So we have to look at all the details. And the details in these two progr~~s, Medicaid and AFDC, are exceedingly complicated. We want to simplify them, but at the moment they are complex. Q Dr. Rivlin, Al Kamen reports in The Washington Post this morning that you're seriously being considered for the Federal Reserve. (Laughter.) DIRECTOR RIVLIN: That's Al Kamen's opinion. I have a big job here, especially in the next few months. I can't imagine leaving the budget in the middle of this historic negotiation and chance to get a balanced budget for the first time in a long time. Q How about sometime after that? Q Sounded like a yes. Q Sounded like a yes to us. Q Secretary Rubin, would you comment on the relationship DIRECTOR RIVL!N: Oh, no, that was not intended -(laughter.) This was intended to say no story here at all; no way, no how. You mean, you're not frustrated and unhappy with all of you colleagues? Q DIRECTOR RIVLIN: Not at all. Q Secretary Rubin, could you comment on the relationship between this budget and the suspended, perhaps, sometime resumed budget negotiations? This is the last proposal that we understand the President made during those talks. Does the fact that you're making it in a binder now and as the first installment of the budget mean this is where the White House stands and it won't move? SECRETARY RUBIN: Well, this is the President's budget proposal. It is, as you know, th~ proposal tha~ developed and that he had discussed a~ length With the Republicans. The 16 President has had a consistent position through this whole thing, which is that we should work together, we should keep our doors open, stay in touch with each other on an cngoing basis and continue to work toward getting a balanced budget. And then, as you know, he has discussed many times -- including the State of the Union -- the commonalities that exist between the two proposals and the ability to get a balanced budget simply by taking the amounts that are in common. And as Alice said, the vast -- of those amounts have common policy underlying them. So I think what he has presented is a basis for reaching a balanced budget and, in addition, a modest tax cut. Q So these could change if those negotiations were resumed? SECRETARY RUBIN: Well, I think -- forget what I think. The President very much thinks it would be constructive to continue negotiations and continue tho discussions. But we have here a budget that does go to balance and that does reflect the commonalities between the congressional majority and the administration's proposal. I just want to add one thing on debt limit, because I did -- when I said before, in response to your question, that in a sense the things that we could do were moot that, of course, was premised on the assumption that the Congress WOUld, in fact, put in place the debt ceiling increase. But the reason I feel that it was such a constructive week last week is because of the letter that the congressional leadership delivered to the President. Q One last thing, Mr. Secretary: if you get to October based on what Congress does, will you then be in a position to renew your use of the extraordinary measures you Use this year to get you past the election? SECRETARY RUBIN: That1s a very difficult question to answer at this point because it depends on a number of technical factors that I suspect will be a part of our discussion Q -- what, five weeks? SECRETARY RUBIN: No, but the -- no, no. Where we are right now Q Are you going -- you will be able to reimburse based on these li SECRETARY RUBIN: Well, that's the question. You see, if you've reimbursed the Civil Service trust -- if you've reimbursed the Civil Service Retirement Fund and G-Fund, then, of course -Q You could do it again. SECRETARY RUBIN: -- those become available as instruments that could be used to avoid a problem. If :hey haven't been, then they can't be -- Q So that's the thing to watch? SECRETARY RUB!N: It would certainly Q You do that, you'll be able to do it; if you don't, then you may not be able to. SECRET.~Y RUBIN: It is certainly one thing to watch. Mr. Secretary one international question, Mr. Sec~etary. There's a published report today that France and Germany may support full G-7 membership for Russia. Do you want to comment on the report and the U.S. position? Q SECRETARY RUBIN: Yes, I saw that, too, actually. I think the best answer is simply to say there certainly has been no decision on that. Q What's our feeling about it. Q Did President Chirac discuss it with President Clinton? SECRETARY RUBIN: Let me stick with what I just said. There certainly has been no decision on that. Thank you. THE PRESS: END Thank you. 2:19 P.M. EST DEPARTMENT OF THE TREASURY omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. eWASIDNGTON, D.C. - 20220 - (202) 622-2960 FOR RELEASE AT 9 A.M. EST February 6, 1996 Contact: Michelle Smith (202) 622-2960 TREASURY REPORTS PROGRESS OPENING JAPAN'S FINANCIAL MARKETS The U.S. Treasury and the Japanese Ministry of Finance met in Tokyo today to review progress under the U.S.-Japan financial services agreement announced in Washington last January by President Clinton and then-Prime Minister Murayama. Reporting on the results of the meeting, Treasury Deputy Secretary Lawrence H. Summers expressed general satisfaction with the Japanese Government's implementation of the agreement so far. "We are reasonably pleased with the way things are going," Summers said. "The Japanese Government has delivered an extensive number of legislative and regulatory changes required under the agreement to open up new opportunities in the financial sector. We are also encouraged by the significant additional deregulation of the corporate pension market now under consideration. "We are already seeing some encouraging signs of progress on the ground in terms of new business for foreign financial institutions in the areas of asset management and corporate finance," Summers said. Summers emphasized Treasury's commitment to continue an intensive follow-up process to monitor implementation of the Japanese commitments in the agreement. Summers also said Treasury would continue to be engaged in promoting deregulation and liberalization in the Japanese financial market. "Looking forward. we want to continue to encourage positive changes in the Japanese financial system," he said. "Improved transparency and stronger disclosure standards and the development of a more active domestic capital market, including a functioning asset-backed securities market, are important steps in responding to the challenges now facing the Japanese economy and its financial system. " -30- RR-856 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2(HO DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220 " Fact Sheet: Progress Under U.S.-Japan Financial Services Agreement Following is a list of significant changes in the Japanese financial markets that have been implemented in accordance with the U.S.-Japan financial services agreement: The JFY 1995 budget, approved in March 1995, gave investment advisory companies (lACs) full access to the $200 billion public pension fund market. The first lAC mandates, totaling roughly $850 million, were awarded in January 1996. U.S. firms won two of these mandates. ... As a result of the elimination of restrictions on the corporate pension market, private pension fund assets under management by foreign lACs rose by more than one-third between March 1995 and September 199.5. * Balanced investment requirements on managers of public and private pension funds have been substantially liberalized, increasing the scope for specialization. * An advisory body to the Ministry of Health and Welfare issued a report in June 1995 supponing the revision of pension actuarial standards from a book-value to a market- value basis. The new standards will be written by this summer and implemented in IFY 1997. At today's meeting, the Finance Ministry reaffirmed its support for market-value accounting and its expectation that the actuarial standards will be revised by mid-1996. * Effective February 1, 1995, fund managers were permitted to conduct investment trust (mutual fund) and pension fund management activities in one entity, significantly lowering the costs of entering the fund management business in Japan. The number of foreign firms licensed to engage in the Japanese mutual fund business has doubled from 5 before the agreement to 10 today. Corporate Securities * In February 1995, the Finance Ministry announced a list of newly permissible financial instruments, including a range of foreign-originated asset-backed securities, exchangeable bonds, and dual currency bonds with currency options. At today's meeting, the Finance Ministry stated its commitment to introduce a domestic asset-backed securities market by the end of the current fiscal year (March 1996). -2- * Effective January I, 1996, minimum rating requirements and financial criteria on ail Japanese corporate bond issues at home and abroad were eliminated. Effective April I, 1996, the listing requirement for domestic commercial paper (CP) issuance will also be eliminated, and the minimum rating requirement lowered. • In February 1995, the Finance Ministry implemented transparent procedural protections for new financial instruments which bring the Japanese regime closer to the U.S. Securities and Exchange Commission's "no action" procedures. ... Two foreign brokerage houses for the first time won solo lead management mandates for Japanese domestic corporate bond issues worth roughly $100 million each. Cross-Border Capital Transactions * ... .. 2/6/96 In April 1995, the Finance Ministry introduced a new, simplified approval and notification system for many cross-border capital transactions, such as euroyen and I'samurai ll securities offerings. The Finance Ministry has granted a total of 466 comprehensive approvals for non-resident issues of euroyen securities, and accepted 104 comprehensive notifications for resident securities issues offshore. No applications for comprehensive approval/notification were denied, and no conditions or limitations imposed on issuance. The 90-day offshore seasoning period on non-resident euroyen issues was eliminated (ahead of schedule) in August 1995. The offshore seasoning period on resident euroyens will be shortened from 90 to 40 days, effective in April 1996, in anticipation of its total elimination by April 1998. In April 1995, restrictions were lifted on Japanese corporate investors' access to a wide range of financial instruments available outside Japan. UBLIC DEBT NEWS Department "I the Treasl::-v • FOR IMMEDIATE RELEASE February 6, 1996 Bureau of the Public Deb! • WashinQ'lOn. DC 20239 CONTACT: Office of Financing U 202 - 219 3350 fEu i J Ji~ 0 I 4 0 2 RESULTS OF TREASURY'S AUCTION OF 3-YEAR NOTES Tenders for $18, 5061n:dl~0l{'6fi '3::~y'e.i:ti< notes, Series W-1999 to be issued February 15, 1996 and to mature February 15, 1999 were accepted today (CUSIP: 912827W73). The interest rate on the notes will be 5~. The range of accepted bids and corresponding prices are as follows: Low High Average Yield S.037%5.046%5.043~ Price 99.898 99.873 99.882 Tenders at the high yield were allotted 51%-. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $49,440,971 Accepted $18,505,941 The $18,506 million of accepted tenders includes $857 million of noncompetitive tenders and $17,649 million of competitive tenders from the public. In addition, $3,472 million of tenders was also accepted at the average price from Federal Reserve Banks for their own account in exchange for maturing securities. The $857 million noncompetitive total includes $250 million awarded to foreign official institutions. RR-857 I 1500 PENNSYLVANlA AVENUE. N.W.· WASHINGTON, D.C.. 20220. (202) 622-2960 FOR RELEASE AT 2:30 P.M. February 6, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction cwo series of Treasury bills totaling approximately $27,400 million, to be issued February 1S, 1996. This offering will provide about $300 million of new cash for the Treasury, as the maturing weekly bills are outstanding in the amount of $27,107 million. Federal Reserve Banks hold $6,765 million of the maturing bills for their own accounts, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $3,259 million as agents for foreign and international monetary authorities, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Due to the ~ublic debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury pills will not be issued to Federal Reserve Banks ~s agents for foreign and international moneta~ authorit;es in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt # Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable T~easury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-858 HIGHLIGHTS OP TREASURY OFFBRINGS OF WBBKLY BILLS TO BB ISSUED FEBRUARY 15, 1996 February 6, 1996 Qffering AmQw-.~ . • • . . Description of Offeringl Term and type of security CUSIP number . . . . Auction date . . . . . . Issue date ... Maturity dat~ . . . original iS9ue date . . CUrrently outstanding Minimum bid amount . Multiples . . . . . . . $13,700 million $13,700 million 91-day bill 182-day bill 912794 3D 4 February 12, 1996 February IS, 1996 August 15, 1996 Pebruary 15. 1996 912794 Y7 3 February 12. 1996 February 15. 1996 May 16, 1996 November 16, 1995 $14,817 million $10,000 $ 1,000 $10,000 $ 1,000 IDe following rules apply to .11 securities m§ntioned abOV~1 submission of Bid§: A~cepted in full up to $1,000,000 at the average Noncompetitive bids . d~scount rate of accepted competitive bids (1) Must be expressed as a discount rate with competitive bids two decimals e.g., 7.10%. (2) Net long position for each bidder must be reported when the Bum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. i Maximum.Recognized Bid st a Single Yield Maximum Award . . . . . Receipt of Tenders: Noncompetitive tenders Competitive tenders fRyment Terms . . . 35' of public offering 35\ of public offering Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR RELEASE AT 3:00 PM February 6, 1996 hB i Contact: Peter Hollenbach j S~ Uu j 4 0 ( 202 ) 219-3302 PUBLIC DEBT ANNOtrNC~S FOR SECURITIES IN THE STRIPS PROGRAlW FOR JANUARY 1996 AcTrviw Treasury's Bureau of the Public Debt announced activity figures for the month of January 1996, of securities within the Separate Trading of Registered Interest and Principal of Securities program (STRIPS). Dollar Amounts in Thousands $864,913,622 Principal Outstanding (Eligible Securities) Held in Unstripped Form $641,964,774 Held in Stripped Form $222,948,848 $14,081,346 Reconstituted in January The accompanying table gives a breakdown of STRIPS activity by individual loan description. The balances in this table are subject to audit and subseqent revision. These monthly figures are included in Table VI of the Monthly Statement of the Public Debt, entitled "Holdings of Treasury Securities in Stripped Form." Information about "Holdings of Treasury Securities in Stripped Form" is now available on the Department of Commerce's Economic Bulletin Board (EBB). The EBB, which can be accessed using personal computers, is an inexpensive service provided by the Department of Commerce. For more information concerning this service call 202-482-1986. 000 PA-211 (RR-859) TABLE VI - HOLOINGS OF TREASURY SECURITIES IN STRIPPEO FORM, JANUARY 31,1996 (In thousands) ------------------ ---- ------------- ---- ----------------------- --- --------------Loan Oescnptlon Maturity Oate Principal Amount Outstanding II --------------------------- ---------------------- - - - - - - - - - 1 1 Total I Portion Held In I Portion Held In II Unstnpped Form I Stripped Form II I ----.--------- --- ------------. -- --------------------- ------------------ ----8-7/8% Note A-1996 7 -3/8% Note C-1996 7-1/4% Note 0-1996 8-112% Note A-1997 8-5/8% Note 8-1997 8-7/8% Note C-1997 8-1/8% Note A-1998 9% Note B-1998 9-1/4% Note C-1998 8-7/8% Note 0-1998 8-7/8% Note A-1999 9-1/8% Note B-1999 8% Note C-1999 7-7/8% Note 0-1999 8-112% Note A-2000 8-7/8% Note B-2000 8-3/4% Note C-2000 8-112% Note 0-2000. 7-3/4% Note A-200L 8% Note 8-2001 7-7/8% Note C-2001 7-112% Note 0-2001 7-112% Note A-2002 6-3/8% Note B-2002 6-1/4% Note A-2003 5-3/4% Note B-2003 5-7/8% Note A-2004 7-114% Note B-2004 7-1/4% Note C-2004 7-7/8% Note 0-2004 7-1/2% Note A-2005 6-112% Note B-2005. 6-112% Note C-2005 .. 5-7/8% Note 0-2005 11-5/8% Bond 2004. 12% Bond 2005 .. 10-3/4% Bond 2005 9-3/8% Bond 2006 11-3/4% Bond 2009-14. 11-1/4% Bond 2015 10-5/8% Bond 2015 9-7/8% Bond 2015 9-1/4% Bond 2016. 7-1/4% Bond 2016 7-112% Bond 2016 ... 8-3/4% Bond 2017 8-7/8% Bond 2017. 9-118% Bond 2018 9% Bond 2018 8-7/8% Bond 2019. 8-1/8% Bond 2019 .. 8-112% Bond 2020 .. 8-3/4% Bond 2020. 8-3/4% Bond 2020. 7-7/8% Bond 2021 .. 8-1/8% Bond 2021 8-118% Bond 202L . 8% Bond 202L 7-1/4% Bond 2022 7-5/8% Bond 2022. 7-1/8% Bond 2023 6-1/4% Bond 2023 7-112% Bond 2024 7-5/8% Bond 2025 6-7/8% Bond 2025 02115/96 05/15/96 11/15/96 05/15/97 08/15/97 11/15/97 02115/98 05/15/98 08/15/98 11/15/98 02/15/99 05/15/99 08/15/99 11/15/99 02/15/00 05/15/00 08/15/00 11/15/00 02115/01 05/15/01 08/15/01 11/15/01 05/15/02 08/15/02 02/15/03. 08/15/03 02/15/04 05/15/04 08/15104 11/15/04 02/15/05 05/15/05. 08/15/05. 11/15/05 11/15/04. ' 05/15/05 08/15/05 02/15/06 11/15/14 02/15/15 08/15/15 11115/15 02/15/16 05/15/16 11/15/16 05/15/17 .. 08/15/17. 05/15/18 11/15/18 02/15/19 08/15/19 02/15/20. 05/15/20 08/15/20 02/15/21 .. 05/15/21 08/15/2L 11/15/21 . 08/15/22 11/15/22. 02/15/23 08/15/23 11/15/24. 02/15/25. 08/15/25 2,220,800 II 3,809,600 I I 3,216,000 II 1,214,400 I I 2,195,200 I I 2,852,800 II 1,347,840 II 2,180,600 II 2,884,800 I I 3,107,200 II 1,440,000 II 2,985,600 II 2,586,100 I 3,380,800 I 2,558,800 I 4,664,000 I 4,048,640 I 4,082,800 I 2,928,800 I 3,240,750 I 2,604,800 I 2,220,160 I 1,453,760 I 1,408,000 I 227,968 I 272,000 I 01 800 I 33,600 II 011 400 II 011 011 6,229,809 16,276,043 17,042,810 8,706,837 7,167,636 6,955,529 7,811,228 6,984,787 8,457,846 6,795,675 8,279,623 7,061,503 7,577,544 7,393,160 8,114,233 5,832,230 7,032,006 7,436,882 8,384,002 9,157,333 9,734,385 22,005,942 10,260,637 22,451,015 23,334,723 27,739,028 12,955,077 14,439,572 13,312,867 14,373,760 13,834,354 14,739,504 15,002,580 15,209,920 4,378,606 2,471,008 7,857,713 4,753,164 2,388,784 9,821,719 2,533,916 3,823,059 6,639,654 18,525,151 17,905,168 9,494,649 9,197,658 2,387,039 2,666,070 5,194,798 16,701,832 6,403,268 4,431,043 6,205,006 9,742,173 4,677,288 3,633,882 6,307,994 7,842,390 3,715,626 14,588,761 22,528,756 5,913,742 8,542,770 12,602,007 8,450,609 20,085,643 20,258,810 9,921,237 9,362,836 9,808,329 9,159,068 9,165,387 11,342,646 9,902,875 9,719,623 10,047,103 10,163,644 10,773,960 10,673,033 10,496,230 11,080,646 11,519,682 11,312,802 12,398,083 12,339,185 24,226,102 11,714,397 23,859,015 23,562,691 28,011,028 12,955,077 14,440,372 13,346,467 14,373,760 13,834,754 14,739,504 15,002,580 15,209,920 8,301,806 4,260,758 9,269,713 4,755,916 6,005,584 12,667,799 7,149,916 6,899,859 7,266,854 18,823,551 18,864,448 18,194,169 14,016,858 8,708,639 9,032,870 19,250,798 20,213,832 10,228,868 10,158,883 21,418,606 11,113,373 11,958,888 12,163,482 32,798,394 10,352,790 10,699,626 18,374,361 22,909,044 11,469,662 11,725,170 12,602,007 o II 3,923,200 1,789,750 1,412,000 2,752 3,616,800 2,846,080 4,616,000 3,076,800 627,200 298,400 959,280 8,699,520 4,819,200 6,321,600 6,366,800 14,056,000 3,512,000 3,825,600 5,727,840 15,213,600 1,371,200 7,281,600 8,529,600 26,490,400 2,510,400 6,984,000 3,785,600 380,288 5,555,920 3,182,400 0 I I I I I I I I I I I I I I I I Reconstrtuted This Month #1 -----------------------38,400 48,000 8,000 14,000 25,600 9,600 73,600 203,600 27,200 12,800 73,600 153,600 11,500 188,800 42,800 32,000 92,000 318,000 122,400 87,500 129,600 98,480 186,320 228,800 213,600 240,800 0 0 0 0 0 0 0 0 249,600 24,000 431,200 0 456,800 923,520 407,360 224,000 111,200 112,000 0 579,200 337,600 75,200 297,400 195,200 360,320 443,200 629,280 1,461,920 62,400 376,960 116,800 690,850 272,000 473,600 564,800 605,536 205,200 713,600 0 ---------------- - - - - - - - - - - - - - ------------------------------Total 864,913,622 I 641,964,774 I 222,948,848 II 14,081,346 ======================================= =============================================================================================== #1 Effective May 1, 1987, seCUrities held In stripped form were eligible for reconstitution to their unstnpped form Note On the 4th workday of each month Table VI Wlil be available after 3 00 p m eastern time on the Commerce Oepartmenrs Economic Bulletin Board (EBB) The telephOne number for more Infonmatlon about EBB IS (202) 482-1986 The balances In thiS table are subject to audit and subsequent adjustments UBLIC DEBT NEWS Department ,.1 the Tr<"a~l::-'" • Bureau of the Public Debt • W;}shinl!'ton. DC 20239 FOR IMMEDIATE RELEASE February 7, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 10-YEAR NOTES Tenders for $14,009 million of 10-year notes, Series A-2006, to be issued February 15, 1996 and to mature February 15, 2006 were accepted today (CUSIP: 912827W81). The interest rate on the notes will be 5 5/8~. The range of accepted bids and corresponding prices are as follows: Low High Average Yield 5.639%" 5.660%5.649~ Price 99.894 99.736 99.819 $59,300,000 was accepted at lower yields. Tenders at the high yield were allotted 82~. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $28,206,533 Accepted $14,009,293 The $14,009 million of accepted tenders includes $540 million of noncompetitive tenders and $13,469 million of competitive tenders from the public. In addition, $1,500 million of tenders was also accepted at the average price from Federal Reserve Banks for their own account in exchange for maturing securities. The minimum par amount required for STRIPS is $320,000. Larger amounts must be in multiples of that amount. The $540 million noncompetitive total includes $100 million awarded to foreign official institutions. RR-860 DEPARTMENT OF TREASURY THE TREASURY ·NE·WS ~~/78~q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ................................ OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20'220 - (202) 622-2960 FOR IMMEDIATE RELEASE February 8, 1996 Contact: Rebecca Lowenthal (202) 622-2960 u.s. TREASURY TO BRING MILLIONS IN CONTRACTS TO SMALL, MINORITY AND WOMEN-OWNED BUSINESSES For the fifth time in two years, the U.S. Treasury Department will host a conference designed to bring government business directly to historically underutilized businesses around the country on April 29, 1996 in Arlington, Virginia. This "PARTNERSHIPS" conference will offer as much as $2 million in federal procurement opportunities to attending companies. Contracts of up to $25,000 will be awarded on the spot using the government Visa purchase card -- business representatives who bring their price lists and calculators in the morning may leave Treasury in the afternoon with new contracts from the Internal Revenue Service, Customs Service, Office of the Comptroller of the Currency and other Treasury bureaus. Larger contracts will be issued within 10 working days, demonstrating Treasury's commitment to faster, more efficient procurement that makes it easier and more desirable to become a business partner with Treasury. "Treasury's interest in a strong economy applies to our own contracting activities. We support competitive bidding for our contracts, and encourage participation by small, women and minority-owned businesses," said George Munoz, Assistant Secretary for Management and Chief Financial Officer at Treasury. Since the first PARTNERSHIPS event in May 1994, attracting 1,300 businesspeople and prime contractors, Treasury has issued over $10 million worth of contracts for goods and services ranging from computer equipment and furniture to dog food and maintenance. The conference allows small, minority and women-owned businesses to meet directly with prime contractors with subcontracting needs and provides a forum to recognize Treasury's Small and Large Business Partners of the Year. The April 29 conference will be held at the Doubletree Hotel National Airport in Arlington, Virginia from 7:30 a.m. to 5 p.m. The registration fee is $45 per person if registered by March 1, $60 by April 29, and $80 on-site. For information, contact the Federal Small Business Technology Council at (800) 878-2940 ext. 221. To receive a fax list of bid opportunities, updated daily, call (202) 622-1133 after April 18. -30RR-861 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT ~~~~~~~~ .... OF THE TREASURY ~~/78~9~~ ................ EMBARGOED FOR RELEASE AT 9-.30 AM. E.D.T. FEBRUARY S. 1996 Sh&elDellt of Sec:tEtary Robert F.. Rubia UDited Stares Depanmeac of the Treas1uy before the Hoase Colllllliuee OD Ranld", ad F"UWlcial Serrices February S, ~ Mr. ChairmaD. I apprecia1e tbis opportunity to testify before you and the otaer distinguished Members of your' Committee. In the last week. the debt limit discussion bas proceeded in a welcomed spirit of bipartisan cooperation. On February 1. Majority Leader Dole. Speaker Gingrich and Majority Leader Armer wrote the PresideDL They committed to passing mutually acceptable legislation. by February 29th, to increase the debt limit to emure the Uoited StaleS comiDues to meet its obligations. The same day, CoDgreSS passed legislation to authorize Treasury temporarily to borrow S29 billion outSide the debt limit. 'Ibis biD., H.R. 2924. will enable us to deal with the March 1st cnmdl date of beDefil payuiems. It was adopted with the support of the Congressioaal MiDority. which bas urged action on the debt limit througbout this process. President Cimon signed that bill into law this moming. Now Congress and the President musl agree on legislation that addresses the debt limit problem on a long-term basis. By emuring that America can meet its obliptions. we will protect the holders of government securities. Social Security recipients. and other federal beneficiaries from 3Jl'f additional risk. It" s clearly time to get this job done. . Since my last appearance before the Committee, much bas changed. We have rea:bed. in my vieW. a common understanding of how important it is to protect the creditworthiness of the Voiced States. a vital aatioaal asset that musl never be tamished by anyone for any reason. It is DOW time that comity replace ~ and the debate over the debt limit be drawn to a close. . Last December. I testified before this Committee about actiODS I bad taken aDd anticipated taking to protect America"s creditworthiness absent adoption of a c:iea debt limit iDaease. I will only briefly review that history today. and then tarn to more current issues. In July. 1995. our Adminisuation began asking Congress to adopt a clean debt limit· bill. Our cotmmmicarioDS on this matter were consistent and clear. I said. rust, default is unthinkable. RR-862 1II ................................ OFFICE OF PUBUCAFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 1 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 Second, the United States will not default because, in the final analysis, Congress will fulfill its responsibilities and pass acceptable debt limit legislation. Third, if Congress did not adopt such legislation, Treasury would be forced to use extraordinary means - subject to resolving legal and practical problems -to avoid default, although I cautioned there were costs attached to all such actions. Fourth, that I would notify Congress before taking any extraordinary actions to ensure the United States government remained under the debt limit and was able to finance its operations. F~ passage of a clean bill will permit the debate on the budget to proceed on its own terms, unencumbered by risks to the nation's credit. Because the debt limit was not increased last Fall, it was necessary for me to take actions to ensure we had cash and credit to meet obligations. In October, we cut the size of a Treasury auction and, in November, we delayed others. On October 18th, we stopped issuing what are called "SLGS· - securities that state and local governments use to lower their debt service burdens. Early in November, Treasury called in nearly $2.5 billion in "compensating balances· from a number of large financial institutions. Then, on November 15th, I was forced to invoke statutory authority provided to Treasury Secretaries by Congress during the Reagan Administration. November 15th was the date when we would have been out of debt limit room and out of cash, and unable to meet all of our financial obligations. We were on the eve of default. Counsel always advised me that this decision with respect to the application of the statute could only be made in the context of the facts which existed on the eve of default. It was only at that time that I was able to determine that we could replace $39.8 billion in securities from the Civil Service Retirement and Disability Fund and $21.4 billion in securities from the so-called "G-Fund· with non-interest bearing cash credits. As I said to the Committee in December, workers and retirees are fully protected by the statutes that authorized those actions. The asset value of the funds has not been diminished by one nickel, and the statutes provide for full and automatic restoration of unpaid interest. Finally, on December 29th, despite all the previous actions, Treasury did not have sufficient debt ceiling room to issue securities to the Civil Service Retirement and Disability Fund to allow the fund to invest its $14 billion semiannual interest payment. As I told the Committee last year, the suspension of 2 the investment, as authorized by statute, made it possible to continue financing operations through January and until the middle of February 1996. Each action I mentioned was necessary because a debt limit increase was not at hand. Each action fit my criteria of only employing those means that were legal, practical and prudent. Every one of them was driven by my responsibility as Treasury Secretary to protect the full faith and credit of the United States, and only by that concem And as I said, in the case of the Civil Service Retirement and Disability Fund action on November 15th, counsel advised that decision could only be made in the context of the facts that existed on the eve of default. As we entered the New Year, Treasury continued to examine other options, if needed, that would permit regular government financing to go forward. As I promised this Committee, once we determined whether further legal, prudent and practical options were available to us, we would report our findings to Congress and the American people. On January 22, I made good on that commitment. I announced that by February 29th or March 1st, absent enactment of a straightforward debt limit increase, we would not be able to meet obligations. I further said that there were only three remaining options available - consistent with what was legal, prudent and practical - that could be exercised by February 15th in order to pay obligations due on that date. These actions, approved by our Department's Office of General Counsel and the Justice Department's Office of Legal Counsel, include: • Suspending the reinvestment of the approximately $3.9 billion of dollar denominated Treasury securities held by the Exchange Stabilization Fund, an action that several prior Treasury Secretaries have taken. • Amending my November 15 determination on the length of the debt issuance suspension period to fourteen months, thus permitting the redemption of approximately $6.4 billion in additional Treasury debt held by the Civil Service Retirement and Disability Fund, and its replacement with a cash credit. And, I must point out, I must base the final decision on an application of the statute to the facts which exist at the time of the determination. • And, finally, exchanging approximately $9.0 billion of assets in the portfolio of the Federal Financing Bank for an equivalent amount of Treasury securities held by certain government trust funds. A swap between the Treasury and the FFB will then let us cancel those Treasury securities. This action is authorized by statute. 3 Following these steps, and without legislation by Congress, there are no additional legal and prudent measures I can take to meet obligations. We reached that conclusion after considering and rejecting other actions because they failed to meet our criteria of doing what was right to avoid default. I will not delay mailing tax refunds owed the American people. I will not sell the nation's gold. I cannot go beyond the $9.0 billion in asset exchanges with the Federal Financing Bank. There are legal, practical and prudential arguments supporting each of these decisions. Delaying tax refunds would hurt more than 70 million Americans who depend on those refunds. It still would provide only a short-term deferral of the problem, because we could not and would not hold their money forever. Secretary Baker considered and dismissed selling gold in 1985 and said: "It would undercut confidence here and abroad based on the widespread belief that the gold reserve is the foundation of our fmancial system, and because Congress clearly has the power to prevent a default by assuming its responsibility with respect to the debt limit. Similar arguments prevail today. U I do not have legal authority to divest any of the other 189 government trust funds for debt management purposes, only the G-Fund and the Civil Service Fund. In addition, the President took Social Security off the table. As to the balance of the FFB assets, I have been advised by counsel that the FFB assets we have identified are the only FFB assets that can be legally sold to the trust funds in a manner that reduces the amount of debt outstanding that is subject to the debt limit. In any case, resorting to any of these measures is no way for a great nation to manage its financial affairs. That is why the commitment of the Leadership to move acceptable debt fuD,it legislation. by February 29th, and the enactment of the Archer bill, which allows for orderly financing and relieves anxieties about government's ability to make payments, is so important. The conclusive answer is right before us. The Congress should pass a debt limit increase for at least one year to separate this issue from the budget debate and get it out beyond the election. That would end the risk both for our credit and for federal beneficiaries, and I think it is important that we do exactly that. This debate began last year when some said that default was an acceptable price for getting the version of the budget they preferred enacted into law. That kind of comment isn't being heard any more. That is because, I believe, people have a better understanding of what is at stake. In that sense, much has been accomplished during this difficult period. 4 A nation's financial reputation is an invaluable asset; its creditworthiness is a sacred trust. Our reputation has enormous practical importance for our country; it should not be called into question, it ought not be subject to uncertainty for any purpose. We must honor interest and principal obligations, and we need to protect the trust of Social Security recipients, veterans, indigent children, active duty military personnel, civilian employees and government contractors -- indeed, everyone who counts on the full faith and credit of the United States. National leaders regardless of party have always acted to protect our creditworthiness. In my December testimony, I read affirmations of this principle from Alan Greenspan, Paul Vo1cker, two Republican and four Democratic former Treasury Secretaries, and comments from the major international rating agencies. These quotes are in the record, and I shall not repeat them. Protecting the nation's credit is a bipartisan, indeed, a non-partisan, tradition. More than a decade ago, President Reagan urged Congress to adopt an increase in the debt limit. In a letter he wrote to then Majority Leader Howard Baker, he gave voice to sentiments I share today. He said, "This country now possesses the strongest credit in the world. The full consequences of default -- or even the prospect of default -- by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The nation can ill afford to allow such a result." Throughout this process, it has been my view that the Secretary of the Treasury must act -- doing what is clearly legal and within the bounds of prudence - to protect the creditworthiness of the United States. We did what we needed to do to avoid default. We communicated our intentions to Congress clearly and well in advance. Upon reaching the end of our options, we reported that to Congress as well. We have now reached a new and, I hope, concluding chapter in the debt limit debate. Congress has taken steps to protect this very important symbol of our economy, our nation's creditworthiness. I look forward to working with you, all of you, so that we may make good on the Leaders' commitment, to pass and sign debt limit legislation acceptable to the President and Congress, and then return to the hard but important work of balancing the budget and raising the living standards of our people. #### 5 DEPARTMENT OF THE TREASURY (~ . . . .~.+"!l ~~~ ~~'\" TREASURY N' E W·,' S C ~~/789~. . . . . . . . . . . . . . . . . .. . .................... OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C.• 20220. (202) 622-2960 ! ! i_ J FOR IMMEDIATE RELEASE February 8, 1996 STATEMENT OF TREASURY SPOKESMAN HOWARD SCHLOSS The Treasury Department has been comprehensive and prompt in complying with Congressional document requests concerning the debt limit. Treasury has produced more than 4,300 pages of documents in response to requests from Majority Leader Armey, Congressman Saxton and Congressman Bachus. The Department has had four lawyers solely dedicated to this task since December 1, and more than 750 hours have been spent by Treasury staff on document production requests. Staff from the House Banking, Judiciary, Government Reform, Ways and Means and Joint Economic committees' have had access to the documents we have provided,· as have staff from the offices of Congressman Solomon, Congressman Cox, Congressman Smith and Congressman Bachus. In an attempt to be as forthcoming as possible, Treasury has even shared draft legal opinions with staff and counsel for the House Banking Committee, the Joint Economic Committee and Congressman Bachus' office. -30- RR-863 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 UBLIC DEBT NEWS Departmenl nflhc Treasu:-v • Bureau oflhe Public Debl • Washin~!On. DC 20239 CONTACT: D£fice of Finart6ing 202-219-3350 FOR IMMEDIATE RELEASE February 8, 1996 RESULTS OF TREASURY'S AUCTION OF 7-DAY BILLS Tenders for $8,055 million of 7-day bills to be issued February 15, 1996 and to mature February 22, 1996 were accepted today (CUSIP: 912794X33). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 5.12%' 5.17%5.14%' Investment Rate 5.23%' 5.29%5.23%" Price 99.900 99.899 99.900 Tenders at the high discount rate were allotted 28%'. The investment rate i9 the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 5.15 RR-864 99.900 Receiyed $41,693,570 Accepted $8,055,370 $41,693,220 350 $41,693,570 $8,055,020 350 $8,055,370 o o o o $41,693,570 $8,055,370 5.16 99.900 UBLIC DEBT NEWS Department 0fthc TreasL::'v • Bureau of the Public Debt • FOR IMMEDIATE RELEASE February 8, 1996 Washin~ton. DC 20239 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 30-YEAR BONDS Tenders for $12,001 million of 30-year bonds to be issued February 15, 1996 and to mature February 15, 2026 were accepted today (CUSIP: 912810EW4). The interest rate on the bonds will be 6~. The range of accepted bids and corresponding prices are as follows: Low High Average Yield 6.110%6.130%6.119%" Jrice 98.496 98.226 98.374 Tenders at the high yield were allotted 81%. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $24,685,772 Accepted $12,001,082 The $12,001 million of accepted tenders includes $324 million of noncompetitive tenders and $11,677 million of competitive tenders from the public. In addition, $900 million of tenders was also accepted at the average price from Federal Reserve Banks for their own account in exchange for maturing securities. The minimum par amount required for STRIPS is $100,000. Larger amounts must be in multiples of that amount. RR-865 DEPARTMENT OF THE TREASURY ~~J78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .................................. OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 REMARKS BY RICHARD S. CARNELL ASSISTANT SECRETARY OF THE TREASURY FOR FINANCIAL INSTITUTIONS WOMEN IN HOUSING AND FINANCE SYMPOSIUM THE GRAND HYATT WASHINGTON, D.C. FEBRUARY 8, 1996 Introduction I always welcome an opportunity to speak with Women in Housing and Finance -- a group that includes so many of my friends and colleagues. But the opportunity to speak here as a pinch-hitter for Speaker Gingrich -- that was irresistible. I took it in a flash. Today I'd like to talk to you about some of the challenges we face in financial services. I'm going to focus on Glass-Steagall reform, but I'll also have a word or two to say about SAIF, community development financial institutions, and regulatory burden relief. Strengths of Our Financial System I'd like to begin by talking about the strengths of our nation's financial system. Let me name five of those strengths. First, we have the broadest, deepest capital markets in the world -- capable of financing innovation and growth at relatively low cost. Second, our financial workforce is highly-skilled, from the backroom to the boardroom. They are a tremendous -- and often under-appreciated -- resource. RR-866 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 Third, the nation's consumers are knowledgeable and demanding -- which, in turn, encourages financial institutions to compete, innovate, and be responsive. Fourth, our system has, to a very large degree, democratized credit. Most people in this country have access to some form of credit. Credit is not, as it once was, the preserve of the affluent. That's not to say the system works perfectly. It doesn't. But compared to a century ago or to many other countries, consumers in the United States generally have very good access. And fifth, our financial system is remarkably innovative and adaptable. (Of course, given our legal and regulatory structure, it has to be.) Americans remain the Thomas Edisons -- even the Michelangelos -- of the financial world. Against the backdrop of these strengths, our financial system does have some very real shortcomings. One of these shortcomings is a set of outmoded and overly restrictive bank structure laws. I'd like to focus on this a bit because it's relevant to the ongoing debate over modernizing our financial system. Laws such as the Glass-Steagall Act and the Bank Holding Company Act impose needless costs and dampen innovation. That's a bit ironic because, as I've indicated, innovation and adaptability are hallmarks of our financial services sector. Naturally, financial institutions put this same innovation to work inventing their way around outmoded legal constraints. They do this successfully. But they also do this at the cost of diverting resources that could better be used elsewhere. Expertise of this kind has much more limited utility than other financial innovation. If you develop electronic money or home-banking software, you could potentially market it worldwide. But you'd sure have trouble exporting Glass-Steagall avoidance techniques, or the latest strategies for coping with Regulation Y. Since other countries don't inflict similar constraints on themselves, they have little use for these innovations. The fact that our bank structure laws are out of date is not for lack of trying. And we can take satisfaction that the Riegle-Neal Interstate Banking and Branching Efficiency Act largely resolved a debate over interstate banking that goes back 60, 70, even 200 years -- perhaps the longest-running battle in American banking law. 3 Changes Occurring in Our Financial System Nonetheless, the failure of our bank structure laws to keep pace with the changes over the past several decades becomes all the more glaringly apparent when we consider the profound changes now occurring in our financial system. Let me just give you a few examples, first by being a bit retrospective. If you look back about 30 or 40 years, you find the financial services industry neatly segmented into specific, regulated markets. Commercial banks take deposits, offer checking accounts, and make loans. Thrifts offer savings accounts and home mortgages. You go to your stock broker to buy securities, and visit your neighborhood insurance agent for your insurance needs. Now fast forward to the present. Despite the legal and regulatory barriers that created that balkanized system of several decades ago, financial services have begun to converge. Commercial banks and their affiliates engage in a wide range of investment banking activities. Securities firms make bridge loans. Indeed, distinctions between loans and securities, and between securities and financial futures, have become increasingly tenuous and artificial. The fact is, the financial services industry looks different today because there are some very powerful forces changing it. I want to talk about three in partiCUlar: technology, financial innovation, and globalization. This list is by no means exclusive, but it illustrates some of the key issues. So let me walk through them with you. Technology The first -- and perhaps most significant -- force for change is technology. It has a remarkably broad reach. Technology has connected global markets, driven down the cost of backroom operations, brought us ATMs. It's at the forefront of electronic money and electronic banking. And technology may well be creating economies of scale that could drive consolidation within the industry for many years to come. My descriptions here don't even scratch the surface of a CD. Much of the technological revolution has centered on information technology. In his book, The Road Ahead, Bill Gates writes: "What characterizes this period in history is the completely new ways in which information can be changed and manipulated, and the increasing speeds at which we can handle it." Additionally, Gates argues, we 4 are approaching frictionless capitalism in which buyers and sellers -- aided by information and low-cost communication -- are closely linked. This information revolution has profound implications for financial services. Think of how banking originally came to be. People who had money to lend weren't in a position to assess the credit of people who needed to borrow. But they knew the bank's credit -- represented by its reputation for meeting all its obligations. And the bank knew (or could learn about) potential borrowers' credit. That informational advantage was its stock in trade. What does it mean for banking, then, if information and communication improve to the point that investors, and borrowers, and other participants in financial markets can link up with one another much more readily than in the past? Of course, that happened with commercial borrowing by large corporations -- which turned from commercial loans to commercial paper. But it does appear that this process -- this disintermediation -- will spread into new areas. If market participants can communicate directly with one another, share information, buy and sell almost effortlessly in a virtual marketplace, then we have to expect that the pace of disintermediation will accelerate. Financial Innovation Technology has also played an important role in facilitating financial innovation, which I consider to be the second major force. Let me use one example. Thirty years ago, Americans couldn't legally own monetary gold. Today, you can own Eurobonds, floating rate bonds, strips, futures, options on futures, options on indexes, income warrants, CMOs, MBS's, currency swaps, floor-ceiling swaps and, yes, even a Libor-squared turbo swap. It's a dizzying array of financial products -- but they play an important role. Financial innovation has meant lower costs, greater flexibility for users, increased liquidity and better risk allocation. But, at the same time, many of these financial products have perplexed regulators -- for example, distinctions between certain futures and securities have become blurred. This presents enormous challenges for regulators and our regulatory system. Globalization Globalization is another force transforming our financial system. Financial markets are increasingly integrated, with large volumes and ranges of financial instruments being traded across borders. Firms today can "pass the book" and engage in 24 hour 5 trading in markets around the globe. Large multinational offering of stock are commonplace and mutual funds have strong international components as investors chase the higher returns of riskier emerging markets or seek to invest in equities on the London or Tokyo exchanges. Of course, this increased globalization carries with it many risks, just as it does opportunities. Many financial services providers today are players in an enormous, unpredictable market -- surely there will be more with the passage of time. But, as financial markets become even more integrated, and even more globalized, numerous questions arise: Could there be new challenges to systemic stability? What is an appropriate regulatory scheme? We must think through these and other issues very carefully. What are the implications? The implications of these changes are dramatic. So, I would like to draw some general conclusions about the implications of the changes to the financial system. Disintermediation is virtually certain to continue, reducing the role of traditional financial intermediation and increasing the role of informational intermediation. In short, knowledge is power, and those who deal in information -- for example, nonfinancial firms such as developers of computer software -- will be important participants . The convergence of different types of financial services and financial institutions will continue, thereby undercutting the existing regulatory structure. This still leaves us with a specific problem: Markets have changed, and customer needs have changed, but financial intermediaries remain constrained by antiquated laws designed for different circumstances. Of course, this has lead to calls for financial modernization -- which is typically assumed to mean repeal of the GlassSteagall law . In Glass-Steagall we have an easily identifiable target -- the separation of commercial and investment banking. And we want to remedy the problem. But we still need to ask the following question: Is this what we need for the next century? Is Glass-Steagall reform responsive to the changes in the financial services industry? I think there are really two ways of answering that question. 6 The first answer is: Yes. Glass-Steagall is an unnecessary, artificial constraint imposed under dramatically different circumstances. It never made sense to begin with. And it's long overdue for the regulatory scrap-heap. Maybe some day, when you peruse through an economics textbook on CD ROM, you might just click on the words "misallocated resources" and get pictures of Carter Glass and Henry Steagall. The second answer is that Glass-Steagall reform -- in the form of scores of statutory pages of restrictions and requirements -- is a short-term fix, making incremental advances on what several decades of regulatory and legal rulings have already put in place. Looking ahead, what we really need is a regulatory and legal structure that will bring us into the 21st century -- that will support the institutions and products that comprise the future financial services industry in such a way as to promote efficiency, stability, and equity. Globalization and disintermediation are realities. But is the regulatory and legal system equipped to meet their challenges? I can't tell you what the financial services industry of the next century will look like. I don't have a crystal ball. But I can tell you it must, by and large, be shaped by the market -- not the government. Certainly, the government will continue to address issues of safety and soundness, fairness of access, and significant market failures. Bat the government also needs to create a legal and regulatory structure that enhances free-market competition. Financial modernization in that respect is an issue for the long-term, but we should be addressing it right now. If we wait too long, we run the risk of falling behind our competitors around the globe who do not operate with the same restrictions, but who do operate in the same global marketplace as us. I believe it's important that we remove the outdated barriers to competition that were put in place by the Depression-era banking laws. And I have spent a good part of my professional life to advance that objective. At the same time, however, I continue to have some concerns about current proposals. My concern is that the Glass-Steagall reform proposal being considered on the Hill would have the effect of locking the financial services industry in the 1980s or early 1990s. And I find it to be rather ironic that the premise of current legislation is the separation of deposit-taking and securities activities -- and the separation of banking and insurance - when in fact the reality is that financial products and financial institutions are converging. 7 Yes, I want to see financial modernization. But, let's not do it at the cost of impeding future change. The cost of taking a few steps forward should not be having our feet nailed to the floor. Other Concerns Now let me take just a few minutes to talk about some other important items that deserve attention. I know this is 1996, and in years that end with an even number, less tends to happen in Washington than some might like. Still, there is time to make a difference. First, I want to send a clear message about the importance of resolving the problems of the Savings Association Insurance Fund. As most of you are aware, the recapitalization of the SAIF was included in the budget reconciliation bill which was vetoed last year. Since the time that the bipartisan SAIF solution passed -- and I want to thank Chairmen D' Amato and Leach, Senator Sarbanes and Congressman Gonzalez for their hard work and leadership on this matter -- the FDIC has lowered premiums for banks (who have fully recapitalized the BIF), and a large premium differential between most banks and thrifts has opened up. If we don't take steps soon to recapitalize the SAIF, the incentive for thrifts to get out may be too strong to overcome. Ingenious attorneys who have had a year to work on this problem will find ways for thrifts to lessen their reliance on SAIF-insured deposits. Deposits will migrate elsewhere and, as the deposit base shrinks, we will come closer and closer to the possibility of a FICO default and a seriously weakened SAIF. That shouldn't be allowed to happen. The solution doesn't rely on anything magical. Congress needs to act soon to pass again the bipartisan solution that we all agreed upon just a few short months ago. Second, let's provide full funding for the Community Development Financial Institutions Fund. As I am sure many of you are aware, the CDFI Fund has gotten off the ground in the Treasury Department. The round that made available $30 million for CDFI and $15 million for Bank Enterprise Act activities has just closed and the review for that competitive process is now beginning. The Fund's programs will help distressed urban and rural communities to restore neighborhoods, start new businesses and grow their local economies. This is an approach to community lending that virtually everyone can agree upon and it deserves the chance to work. And third, I am hopeful that the Congress will still find a way to pass meaningful regulatory burden relief legislation. The Administration has worked very hard these 8 past three years to eliminate unnecessary regulatory burdens wherever possible. For example, the OCC and OTS have been doing a comprehensive review of every regulation on the books. If a regulation isn't needed, it's being eliminated. But there is only so much you can accomplish administratively -- we need to work on it legislatively as well. Regulatory burden relief legislation will have a much better chance if it is not encumbered by needlessly divisive provisions, like CRA-gutting amendments, or connected with the extraneous controversy over bank insurance powers. In short, we have to be careful about loading up the bill with items that give just about everyone something to shoot at. Because when that happens, we have that old staple phenomenon of federal banking legislation, the circular firing squad -- in which everyone hits his or her target, but no one comes out ahead. Thank you, and I'll be glad to take questions now. uuu# DEPARTMENT OF THE TREASURY NEWS ~~/78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ............................ OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 ADV 1:15 P.M. EST Remarks as prepared for delivery February 12, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN NATIONAL ASSOCIATION OF STATE TREASURERS Thank you, Mrs. Withrow, for that introduction. Mrs. Withrow has been a tremendous asset to the state of Ohio, a real leader for the association, and she's done a marvelous job as Treasurer of the United States. At the outset today, President McGrath, I want to thank the great many members of the National Association of State Treasurers who signed the letter in November supporting our efforts to separate the debt limit issue from the budget debate and our work to protect the full faith and credit of the United States. This is a critical issue facing our national leadership, and your understanding of the potential impact of a failure to meet our obligations, and your support, has made an important contribution to a successful resolution of this matter. Thank you. I'm honored to be the first Treasury Secretary to have the opportunity to address the NAST, and I feel a sense of kinship since we deal with many similar problems. I have a great deal to cover this afternoon, including the economy and the budget and the debt limit. I spent 26 years in the private sector and two years at the White House before coming to Treasury. I was familiar with the economic side of Treasury's portfolio, and I quickly came to have a deep appreciation for the other area of Treasury's responsibility - law enforcement. Roughly 40 percent of the federal government's law enforcement officers are in Treasury. It's important that Americans have economic security, and because it is likewise important that they feel physically secure -- and this is such a significant part of my job -- I want to touch briefly on this area too. RR-867 (more) Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 In the past three years this administration has made a real contribution to what have been encouraging crime trends in the nation. In terms of areas where Treasury is involved, our Customs Service has put a major dent in the Cali drug cartel, the ATF has been deeply involved in the investigative work in the World Trade Center and Oklahoma City bombings, our specialized fmancial crimes unit has a very important program aimed at countering money laundering. And our Secret Service is effectively countering state of the art counterfeiting technology and credit card fraud. Beyond that, there's Treasury's involvement in the administration's crime bill, with the provision to put 100,000 additional law enforcement officers on the street, the assault weapons ban and the Brady Law. That's a long list, but it's an enormously important part of Treasury's work, and one to which I attach a high priority. Having said that, I want to discuss the economy and economic policy, which have undergone a sea-change in the past three years. It is worth reflecting on the magnitude of those changes because the contrast with the prior four years is stark, and we tend to forget. Alan Greenspan said in his congressional testimony that the fundamentals of our economy have not looked this strong in 30 years. And he's right. Real economic growth over the past three years has averaged 2.5 percent. During the previous four years it averaged just 1.5 percent. If those numbers sound a little low to you, it's because the technical experts in the federal government in December of last year changed the way the GDP calculation is done to what is called the chain-weighted methodology. They still show a remarkable difference in growth rates -- two-thirds higher over the past three years at an annual rate than in the previous four years. The other numbers are equally encouraging. Unemployment is 5.8 percent, and it was over 7 percent when this administration started. The economy has created more than 7.7 million new jobs in the past three years against the 2.4 million in the previous four years. Inflation is at a near 30-year low, averaging just 2.6 percent against 4.2 percent during the prior four years. Mortgage rates are very low by historical standards. Business investment has surged. There has been some softening of late, and I wouldn't be surprised to see a dampening effect on first-quarter growth, especially with the government shutdown and the blizzard, but I think the most likely scenario is then a return to solid growth, with a continuation of low inflation. My view is based on what forecasters say and on the sense I get from discussions with people. 3 Looking past the immediate future, our great challenge is to be on the right policy path to continue to grow economically in the years and decades ahead, and to do so in a way that works for all Americans. That's what the budget debate in Washington is really all about. The Wall Street Journal Washington Bureau Chief wrote the other day that this is the most important economic public policy debate since the 1960s. I agree, though it is probably the most important economic public policy debate in this country in the past 50 or 60 years. The President and the congressional majority have both proposed budgets that go to balance in seven years with CBO scoring, but with enormous differences in priorities, differences that are critical to the future of our economy and our society. The context of the debate is a period of vast economic change, arguably the greatest change since the industrial revolution, consisting of globalization, the economic emergence of Asia as the future center of the world economy, increased technological changes, and advances in work force organization. Further, at the same time we are entering this new economy, we are experiencing a falling median real wage and a long term increase in income disparity. The policy choices that are made must position our economy to take advantage of change, and see that every American has the opportunity to have a higher standard of living. The President's balanced budget is driven by a broad view about what is best for our long-term economic health. It goes to balance, yes, but at the same time would make investments in the areas that are essential to productivity -- in education, training, and technology, in programs to bring the residents of our inner cities into the economic mainstream. And it maintains effective programs in Medicaid and Medicare and the other areas of our social compact, reducing expenditures in these areas to rates consistent with that objective. The budget plan advanced by the congressional majority involves substantial cuts in all the areas of public investment that we just discussed, and in our judgment it goes too far in Medicare, Medicaid and the like. The focus in that budget is on large tax cuts that go primarily to those in our economy who are doing best, and which in my view do not have economic benefits commensurate with their cost. That's the debate in a nutshell. You can have social and moral views on all this: but, putting these aside, this can be viewed totally and independently from a hard-nosed business-like view of what we must do for economic success in the years and decades ahead. In my view, the answer is clear, and that is the approach I have discussed today. Having said that, as the President said in his State of the Union address, there is enough common ground to put in place a seven-year, CBO-scored balanced budget this year, and leave the differences, which the Wall Street Journal referred to as the most important economic public policy debate in 30 years -- to the elections. This is what I believe we should all work to do. 4 Beyond matters of budget policy, there are areas of international economic policy which are similarly important to our economic future. Just briefly, they are opening markets, dealing with crises that open capital markets can bring from time to time, such as the Mexico situatio~ and third, promoting development and reform in the developing world, which is the most rapidly growing market for our goods and services. Having said that, I want to spend the remainder of my time on some other matters of importance, investment practices and the debt limit. I believe Mrs. Withrow spoke with you in October about sound investment policies and practices. When I testified about the debt limit last week I told Congress my duty as Secretary of the Treasury is to maintain the creditworthiness of the United States. So too, as you know better than I, state and local officials have the duty of protecting the assets contributed to them. In the wake of the Orange County bankruptcy, Treasury hosted a meeting of various groups of state and local officials, including NAST, to discuss the importance of sound investment practices. We and Chairman Levitt, who has also spoken to you on this topic, will host a followup meeting on March 12th to discuss progress since our last meeting and to find out what still must be done. I believe that the main role for us at the federal level is to maintain the visibility of the problem, so that concern doesn't just fade away. If we can help you address the problem, and prevent pressure for investment offices to become profit centers, then we will have served a useful role. On a somewhat tangentially related matter, as you are aware, protecting the assets of the taxpayers is one of our most important responsibilities. That is every bit the case with their deposits in financial institutions as it is with the funds they entrust to the government. The FDICs Savings Association Insurance Fund backs up the government's guarantee of deposits at savings institutions nationwide. This fund has some serious weaknesses. For example, it has only about 43 cents in reserves for each $100 of insured deposits -- one third of the reserve level required by law. Now is the time for Congress to enact legislation to correct these weaknesses and strengthen the fund. Now, with regard to the debt limit, as treasurers, with a fiduciary responsibility, you perhaps more than others have a keen appreciation for our two aims during this difficult period. 5 On the one hand, it was necessary to strongly urge acceptable legislation raising the debt limit, as all Treasury Secretaries before me for some decades have done. On the other hand, it was necessary to make certain that what was said publicly by those of us with the responsibility in the debt area did nothing to impact on the markets. I believe that we have accomplished both of these purposes, in an unprecedentedly difficult political environment. The failure of Congress to increase the debt limit forced us to employ statutory powers that were granted to secretaries of the Treasury by the Republican Senate and Democratic House, and signed by President Reagan in 1986, as well as additional powers that were enacted in 1987 to provide resources to deal with a debt limit impasse. This is, as I have observed many times, and I believe you will agree, no way for a great nation to manage its financial affairs. Having said that, two weeks ago I believe reached a new phase in the debt limit debate. Firstly, the congressional leadership provided a letter to the President committing to increase the debt limit in a manner acceptable to both the President and Congress. And Bill Archer, chairman of the House Ways and Means Committee, successfully enacted legislation getting us past the crunch period of March first. We are seeing a new phase of bipartisan cooperation. It has been a difficult period, starting back in July when the debate first began. At the beginning, there were people in positions of responsibility saying that default for a period was an acceptable price to pay to get one version of the budget. I believe the ensuing months have greatly increased the understanding that the consequences of not meeting our obligations and maintaining calm markets make default unthinkable. That, I believe, will serve us well, not only now, but in the longer run. Looking forward, the solution is to enact a debt limit extension that takes us past the election season, a one-year extension at a minimum. The debt limit window of opportunity will open on Monday February 26th when Congress returns and the leadership has said it W!ints to act by Thursday February 29th. The spirit of cooperation has returned to this issue with the realization that this is more than a bipartisan matter, it is a non-partisan issue. I'm looking forward to being in the Oval Office sometime in early March, for the signing of a debt limit extension that lets our debate return to the matter of how best to prepare the U.S. to compete in an increasingly global economy. Thank you. -30- UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE February 12, 1996 i i: L : '- : '"'J ,J ""' j'1,9NrACT: Office of Financing v 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $13,785 million of 26-week bills to be issued February 15, 1996 and to mature August 15, 1996 were accepted today (CUSIP: 9127943D4). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.70% 4.71% 4.71% Investment Rate 4.89% 4.90% 4.90% Price 97.624 97.619 97.619 Tenders at the high discount rate were allotted 20%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS RR-868 Received $60,778,074 Acce:gted $13,785,170 $54,493,650 1,247,824 $55,741,474 $7,500,746 1,247,824 $8,748,570 3,400,000 3,400,000 1,636,600 $60,778,074 1,636,600 $13,785,170 UBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE February 12, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $13,815 million of 13-week bills to be issued February 15, 1996 and to mature May 16, 1996 were accepted today (CUSIP: 912794Y73). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.77% 4.80% 4.80% Investment Rate 4.91% 4.94% 4.94% Price 98.794 98.787 98.787 Tenders at the high discount rate were allotted 42%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $51,301,053 Accepted $13,815,033 $46,395,070 1,460,498 $47,855,568 $8,909,050 1, 460« 498 $10,369,548 3,365,485 3,365,485 80,000 $51,301,053 80,000 $13,815,033 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.78 - 98.792 RR-869 4.79 - 98.789 DEPARTMENT OF THE TREASURY!~) ~~'t' TREASURY NEWS ~~178~9~·. . . . . . . . . . . . . .1I................ .............................. OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 ADV 12 P.M. CST (1 P.M. EST) Remarks as prepared for delivery February 13, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN TRI-COUNTY BUSINESS REPRESENTATIVES LUNCHEON WAUSAU, WISCONSIN Before I begin, let me just say a few words about Dave Obey. I've been at the White House for two years and at Treasury one, and one of the things I have come to appreciate, vastly more than when I was in the private sector, is how important it is to have a critical mass of people in Congress who want to make the system work. We now have a situation in the House where there is a large group of people who in some fair measure operate on the principal they either want it their way or no way. But oUI political system can't work that way. Instead, you need a critical mass of people -- regardless of their views -- who are there to govern, know how to make the system work, and are skilled in that. David Obey has those qualities, and he is clearly a leader. So whether you're a Democrat or a Republican, it is critical to have people like David Obey on both sides of the aisle. As I've gotten to know David, I've gotten to know and respect enormously his ability to be a person of deep abiding principles, and to bring to Congress a great deal of common sense with respect to the economy. But the key is that governing and working to find common ground are not at all inconsistent with having principles and working hard to pursue them. I think maybe that's where some of the people who are new in Congress are confused. Some of you may have heard this, but let me give you an example of what I mean about David Obey. The President was flying to Bosnia, and Bob Livingston, the Republican Chairman of the Appropriations Committee, was on the trip. He told the president that if the budget debate were left to him and Dave Obey, they'd settle it in no time. Unfortunately, obviously this isn't entirely up to Dave Obey and Bob Livingston, but it tells you kind of person he is. RR-870 (more) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 On the economy, David has long been an advocate of fiscal responsibility, while at the same time he has been an advocate of education and the other public investments that are so important to future productivity. Now, let me spend a few minutes talking about some of the critical issues that face us today from the perspective of being Treasury Secretary. Specifically, I want to deal with the economy, the budget debate, and the debt limit issue. But I have a broad range of items on my plate. Treasury also deals with tax policy, including the area of tax reform, and Treasury has important responsibilities in our international economic relations, including Russia, China and Mexico. Beyond that, Treasury has 40 percent of the officers in federal law enforcement in our Customs, Secret Service, and ATF Bureaus, the enforcement side at the IRS, and our critically important anti-money laundering operations. I'd be delighted to answer questions in those areas today also. Having said that, to set the stage for our discussion today it would be useful to look at what has happened in the economy in the past three years, because the contrast is so stark, compared to the prior four years, and we tend to forget. Alan Greenspan has testified to Congress that the fundamentals of our economy have not looked this strong in 30 years. And he's right. Real economic growth over the past three years has averaged 2.5 percent. During the previous four years it averaged just 1.5 percent. If those numbers sound a little low, it's because the technical experts changed the way the economic growth or GDP calculation is done last month to what they call chain-weighting, to make it more up-todate. But the figures still show a remarkable difference in growth rates -- two-thirds higher over the past three years at an annual rate than in the previous four years. Unemployment is 5.8 percent, and it was over 7 percent when this administration started. The economy has created more than 7.7 million new jobs in the past three years against the 2.4 million in the previous four years. Inflation is at a near 30-year low, averaging just 2.6 percent against 4.2 percent. Mortgage rates, and intermediate and long term rates more generally, are very low by historical standards. Business investment has surged. Our industrial heartland has bounced back. Wisconsin lost 3,000 jobs in the recession, but in the past three years employment has grown by 171,000 jobs. Not all the changes nationally have been economic. The other night the President said that the era of big government is over. The federal government has 200,000 fewer employees today than three years ago. The Treasury Department, with 153,000 people, is nearly 10 percent smaller today than three years ago. I had been involved in similar cost-cutting activities in the private sector, and I can tell you that the reductions at Treasury -- and I believe in the other federal agencies -- reflect a real institutionalization in their cultures of the philosophy of reinventing government which the President and Vice President have so energetically pursued. At Treasury, it has taken hold up and down the hierarchical levels. 3 Looking again at the national economy, there has been some softening of late, and I wouldn't be surprised to see a dampening effect on first-quarter growth, especially with the government shutdown and the blizzard but, based on what forecasters say and on the sense I get from discussions with people, I think the most likely scenario is then a return to solid growth, with a continuation of low inflation. Our economic strength is due in part to the private sector becoming more efficient over the past seven or eight years, and becoming competitive in the global economy for the first time in this generation across a broad range of industries. That is clearly manifest in the manufacturing industries of the Midwest. But the indispensable key to the recovery and to sustaining the recovery was the powerful 1993 deficit reduction program proposed and fought for by the President, against the advice of his political advisers because he felt fiscal responsibility was THE threshold economic issue. The votes in both Houses were very close, and that absolutely critical legislation would not have passed -- with profound adverse ramifications -- without the courageous political leadership of David Obey and a few others like him. We have cut the deficit relative to the size of the economy by more than half in three years -- from 4.7 percent of GDP to just 2.3 percent, and in absolute dollar terms has been nearly cut in half. We have not seen this kind of positive fiscal progress since Harry Truman was president. President Clinton is deeply committed to continuing the fiscal discipline he brought to the federal government budget process after the 12 years from 1980 to 1992 when the federal debt quadrupled. Now, the key is to be on the right policy path to continue to grow in the years and decades ahead, and to do so in a way that works for all Americans. That's what the budget debate in Washington is really all about. The Wall Street Journal Washington bureau chief wrote the other day that this is the most important economic public policy debate since the 1960s. I agree, though I think it is probably the most important economic public policy debate in this country in the past 50 or 60 years. The President and the congressional majority have both proposed budgets that go to balance in seven years with CBO evaluation, but with enormous differences in priorities, differences that are critical to the future of our economy and our society. Before I discuss our budget program itself, it would be useful to examine what drives our approach to budget policy. The context of the budget debate is a period of vast economic change, arguably the greatest change since the industrial revolution, consisting of globalization, the economic emergence of Asia, the rapid rate of technological changes, and advances in work force organization. Further, at the same time we are entering this new economy, we have experienced a decade of falling median real wage and an increase in income disparity, which are serious threats to our economy and to our social fabric. 4 I want to share with you some figures I think are critically related to our economic future and our social fabric. The Committee for Economic Development recently reported that a third of the neighborhoods in our 100 largest cities are distressed or in danger. The Organization for Economic Cooperation and Development (OECD) in Paris ranks us at the top of a list of 16 industrialized nations in income disparity. Moreover, the study also tells us that a greater percentage of our children are poor than in almost all other Western industrialized nations. The number of children in this country under the age of 18 who live in poverty rose by roughly half between 1979 and 1994. That is not a recipe for a healthy future for any of us. As we examine the budget debate, let me suggest a way of thinking about it. The issues the President talks about, education, training, technology and the like, aren't liberal or conservative, Democratic or Republican. Putting these labels aside, and even putting aside moral and social judgments, the budget can be viewed totally and independently from a hard-nosed business-like view of what we must do for economic competitiveness and success in the years and decades ahead., and maintaining our social fabric. With regard to those choices, the President's balanced budget goes to balance, yes, but at the same time would make public investments in the areas that are essential to productivity -- education, training, technology and the environment. Moreover, it maintains effective programs in Medicaid and Medicare and the other areas of our social compact, reducing expenditures but not by amounts that in our judgment exceed the objective of maintaining effective programs. On the other hand, the budget plan advanced by the congressional majority entails relatively significant cuts in the areas of public investment and the social compact that we just discussed, and that pays for large tax cuts that in my view do not have economic benefits commensurate with their costs. That's the debate in a nutshell. And I would urge you to view that debate from a hard-nosed business-like perspective of what is requisite for our future economic success, and our social fabric. The question now is, where do we go from here? We are four months into fiscal 1996 without a budget. We need to work together to resolve these matters. And if we cannot do that now, we must continue on the road of fiscal responsibility we've traveled these past three years. The atmosphere in Washington has improved of late, and I believe that will permit us to continue traveling on that path. Having said that, I want to close with a few words about a rather pressing issue on my desk at the moment -- the debt limit. 5 Since July, I have had two aims. On the one hand, it was critical to strongly urge acceptable legislation raising the debt limit, as all Treasury Secretaries before me for some decades have done. On the other hand, it was critical to make certain that comments by those of us with the responsibility in the debt area did nothing to impact on the markets. I believe that we have accomplished both of these purposes, as evidenced by the market calmness on the issue of the debt limit and by the recent developing bipartisan coalescence around dealing with the debt limit on a mutually acceptable basis, in an unprecedentedly difficult political environment. The failure of Congress to increase the debt limit forced us to employ statutory powers that were granted to secretaries of the Treasury by the Republican Senate and Democratic House, and signed by President Reagan in 1986, as well as additional powers that were enacted in 1987 to provide resources to deal with a debt limit impasse. However, this is, and I believe you will agree, no way for a great nation to manage its financial affairs. Having said that, two weeks ago I believe we reached a new phase in the debt limit debate. First, the congressional leadership provided a letter to the President committing to increase the debt limit in a manner acceptable to both the President and Congress. And second, Bill Archer, chairman of the House Ways and Means Committee, successfully enacted legislation getting us past the crunch period of March 1st. We are seeing a new phase of bipartisan cooperation. It has been a difficult period, starting back in July when the debate first began. At the beginning, there were people in positions of responsibility saying that default for a period was an acceptable price to pay to get one version of the budget. We -- and I -were saying that the nation's creditworthiness is an invaluable asset and that should never be subject to uncertainty for any reason. I believe the ensuing months have greatly increased the understanding that the consequences of not meeting our obligations and maintaining calm markets make default unthinkable. That, I believe, will serve us well, not only now, but in the longer run. Looking forward, the solution is to enact a debt limit extension that takes us past the election season, a one-year extension at a minimum. Congress returns on Monday, February 26th, and the leadership has said it wants to act by Thursday February 29th. The spirit of cooperation has returned to this issue with the realization that this is more than a bipartisan matter, it is a non-partisan issue. I'm looking forward to being in the Oval Office sometime in early March, for the signing of a debt limit extension that lets our debate return to the matter of how best to prepare the U.S. to compete in an increasingly global economy. Thank you. -30- PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE February 12, 1996 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF TIIE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECTED BY FLOODS IN IDAHO The Bureau of Public Debt took action to assist victims of floods that struck Idaho by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of Idaho affected by the floods. These procedures will remain in effect through March 31, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area. Most financial institutions serve as paying agents for savings bonds. The counties of Benewah, Bonner, Boundary, Clearwater, Kootenai, Latah, Lewis, Nez Perce, and Shoshone, and the Nez Perce Indian Reservation are included in the initial declaration. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect for those areas. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-1048, available at most financial institutions or the Federal Reserve Bank. Bond owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number,-approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-212 (RR-87 1) PUBLIC DEBT NEWS Department of the Treasury • Bureau of the Public Deb:t • 'Washington, DC 20239 FOR IMMEDIATE RELEASE) ~:) February 12, 1996 L ; '- ) ,i ,_ J I 0 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECTED BY FLOODS IN OREGON The Bureau of Public Debt took action to assist victims of floods that struck Oregon by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of Oregon affected by the floods. These procedures will remain in effect through March 31, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area. Most financial institutions serve as paying agents for savings bonds. The counties of Benton, Clackamas, Clatsop, Columbia, Hood River, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Sherman, Tillamook, Umatilla, Union, Wasco, Yamhill, and the Warm Springs Reservation are included in the initial declaration. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect. for those areas .. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-I048, available at most financial institutions or the Federal Reserve Bank. Bond owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number, approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-213 (RR-872) PUBLIC DEBT NEWS i I" Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 FOR IMMEDIATE RELEASE February 12, 1996 Contact: Peter Hollenbach (202) 219-3302 BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS AFFECTED BY FLOODS IN WASHINGTON The Bureau of Public Debt took action to assist victims of floods that struck Washington by expediting the replacement or payment of United States Savings Bonds for owners in the affected areas. The emergency procedures are effective immediately for paying agents and owners in those areas of Washington affected by the floods. These procedures will remain in effect through March 31, 1996. Public Debt's action waives the normal six-month minimum holding period for Series EE savings bonds presented to authorized paying agents for redemption by residents of the affected area. Most financial institutions serve as paying agents for savings bonds. The counties of Asotin, Clark, Columbia, Cowlitz, Kittitas, Klickitat, Lewis, Pierce, Skamania, Thurston, Walla Walla, Whitman, and Yakima are included in the initial declaration. Should additional counties be declared disaster areas the emergency procedures for savings bonds owners will go into effect for those areas. The replacement of bonds lost or destroyed will also be expedited by Public Debt. Bond owners should complete form PD-1048, available at most financial institutions or the Federal Reserve Bank. Bond owners should include as much information as possible about the lost bonds on the form. This information should include how the bonds were inscribed, social security number, approximate dates of issue, bond denominations and serial numbers if available. The completed form must be certified by a notary public or an officer of a financial institution. Completed forms should be forwarded to Public Debt's Savings Bond Operations Office located at 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the words "Floods" on the front of their envelopes to help expedite the processing of claims. 000 PA-214 (RR-873) DEPARTMENT OF THE TREASURY ~178f9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ................................ OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622-2960 FOR RELEASE AT 2:30 P.M. February 13, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series of Treasury bills totaling approximately $26,400 million, to be issued February 22, 1996. This offering will result in a paydown for the Treasury of about $6,425 million, as the maturing bills total $32,813 million (including the 7-day cash management bill to be issued February 15, 1996, in the amount of $8,055 million). Federal Reserve Banks hold $6,924 million of bills for their own accounts in the maturing issues. These may be refunded at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $2,610 million of the maturing issues as agents for foreign and international monetary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions. Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-874 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED FEBRUARY 22, 1996 February 13, 1996 Offering Amount . $13,200 million $13,200 million Description of Offering: Term and type of security CUSIP number Auction date Issue date Maturity date Original issue date Currently outstanding Minimum bid amount ' Multiples . 91-day bill 912794 Y8 1 February 20, 1996 February 22, 1996 May 23, 1996 November 24, 1995 $12,647 million $10,000 $ 1,000 182-day bill 912794 Z7 2 February 20, 1996 February 22, 1996 August 22, 1996 August 24, 1995 $18,464 million $10,000 $ 1,000 The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date • t "_. ' I... DEPARTMENT OF THE-1REA5U'R't! i WASHINGTON. D.C. SECRETARY OF THE TREASURY February 14, 1996 The Honorable Newt Gingrich Speaker U.S. House of Representatives Washington, D.C. 20515 Dear Mr. Speaker: We should all be pleased with the recent spirit of bipartisan cooperation on the debt limit issue as evidenced in your February 1 letter to the President and the subsequent enactment of H.R. 2924. Pursuant to my letter of January 22 and my testimony before the House Banking Committee, I wish to inform you that Treasury is proceeding with the three actions we will take to avoid defaulting on our obligations tomorrow. First, I have amended my November 15 determination of a 12-month debt issuance suspension period to extend that period by another two months, to 14 months. This action will pennit the redemption of approximately $6.4 billion in additional Treasury debt held by the Civil Service Retirement and Disability Fund (CSRDF). Second, the Federal Financing Bank (FFB) is in the process of exchanging approximately $8.6 billion of its assets, consisting of debt obligations of the U.S. Postal Service and the Tennessee Valley Authority. for an equivalent amount of Treasury securities held by the CSRDF. An exchange between FFB and Treasury will allow Treasury to cancel such Treasury securities. In addition, the Postal Service has elected to prepay $800 million of its debt to FFB. Prior to such election, FFB had planned to exchange such debt with a government trust fund. Third, I have authorized suspending the reinvestment of the approximately $3.9 billion of Treasury securities held by the Exchange Stabilization Fund. We look forward to working with you and Majority Leader Dole so that we can enact debt limit legislation acceptable to both Congress and the President by the end of this month. Sincerely, i2~ Robert E. Rubin ..' • \J • " .. .. • A .. GLOBAL INFORMATION CEt-4TE'R WI • The New $100 Note . • c < • v e < . u .... u.,,* FOR IMMEDIATE RELEASE: Thursday, February 15, 1996 Contact: u.S. Department of Treasury Public Affairs Office Ph: 202-622-5881 u.s. CAMPAIGN INFORMING PEOPLE ABOUT THE NEW 5100 BILL WASHINGTON, D.C. -- The U.S. government is conducting a worldwide public education campaign to familiarize people with its newly designed $100 bill. which includes advanced and proven protective features to stay ahead of evolving technology. The new bills are scheduled for global release in the first quarter of 1996, The global education campaign is using pamphlets, posters, training videos, briefings and targeted advertising to reach the hundreds of millions of people who use U.S. currency. The U.S. Treaswy has sent detailed materials to more than 200 U.S. diplomatic missions. whose representatives are already meeting with government officials, financial institutions and the business commWlity, the media and the general public to infonn them of the upcoming currency introduction. Millions of pieces of literature have been printed and distributed through the U.S. Information Service (USIS) in 20 languages. In some countries, the USIS has translated materials into additional languages or dialects, including Latvian, Egyptian·Arabic and Tagalog. To further ensure that users of U.S. currency have quick access to information, the Treasury has established six global information centers to provide information and coordinate regional outreach. ttWith two-thirds of all U.S. currency circulating outside the borders of the United States, we have a responsibility to educate those who put their trust in our currency," said Treasury Under Secretary John D. Hawke. The Federal Reserve System's 12 banks and 25 branches are responsible for educating depository financial institutions in their respective regions about the new series currency. In November 1995, they began an extensive program of train-the-trainer seminars for institutions and serve as a regional source for informational materials that are useful for cash handlers and the general public. 115000 (more) The Treasury's Bureau of Engraving and Printing has been producing and building an inventory of new SI 00 notes since September 1995. Nearly 600 million notes have been already been printed. After shipment to Federal Reserve Banks across the United States, the enhanced Series 1996 notes will be introduced into global circulation as the older notes are returned to the Federal Reserve. Both types of bills will be legal U.S. tender. The United States will not devalue either its older or new currency in any way. But people who exchange U.S. dollars outside the country should seek out currency handlers who have reputations for charging the fairest fees, U.S. officials advise. "Holders of U.S. currency worldwide can rest assured that the U.S. government will not recall its currency," said Federal Reserve Board Chairman Alan Greenspan. "As older notes reach the Federal Reserve from depository institutions, they will simply be replaced by the newer notes. Both the old design and the new issue will be honored at full face value." As new currency is being printed, the public education campaign is informing people around the world that the new bill design is intended to help U.S. currency maintain its edge against modern high-tech reprographic equipment such as color copiers, digital scanners, laser printers and computer pUblishing software. "This is the first significant change in U.S. currency since 1928, but altering the design of bills to improve security and maintain their integrity is nothing new," said U.S. Treasurer Mary Ellen Withrow, who has been making public speaking appearances as part of the campaign. U.S. currency has changed more than 12 times since 1785. Withrow noted that the new currency will retain its distinctive "Americanu look, with size historical portraits and ink colors remaining the same. The cotton and linen paper will retain its unique crisp feel, Withrow said. The new design will, however, include a number of other protective features, the most obvious being the enlargement of the portrait, which is also shifted to the left to accommodate a watermark. Microprinting and security threads, which first appeared in the 1990 series of U. S. bills, have been retained in the new currency. Protective fearures tor the new S100 note include: o A watennark to the right of the portrait depicting the same historical figure as the portrait. The watermark cannot be copied and is visible only when held up to a bright light. o A security thread that will glow red when exposed to ultraviolet light. For added security, the thread 'Nill be in a unique position on each denomination. o Color-shifting ink. The number in the lower-right corner on the front of the note looks green when viewed straight on, but appears black when viewed at an angle. (mo~) o Microprinting in the numeral in the note's lower left-hand comer and on the coat of Ben Franklin in [he bill's portrait. o Concentric fine-line printing in the portrait and on the back of rhe note. This type of printing is extremely difficult to copy. The release of the new $100 bilI marks the first in the series of newly designed notes, which will be released at the rate of about one a year. Protective femures may vary according to denomination. The $100 bill will have a full package of enhanced features, while smaller notes may have fewer features. The greatest strength of the new note series is the accumulation of different protective elements. More infonnation about the redesigned U.S. currency is available by calling the Global Information Center at (202) 622-2970, or by requesting document 591 through the U.S. Treasury's interactive fax system at (202) 622-2040. Information is also available from the Treasury's Web site at http://www.ustreas.go v/ . ### DEPARTMENT OF THE TREASURY '.< TREASURY ~~/7~89~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .............................. OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 An Evaluahon of the Flat I ax Remarks by _ Deputy Secretary of the Treasury Lawrence H. Summers The Brookings Institution February 16, 1996 Introduction I'm glad to be here at this Brookings conference on fundamental tax reform. I can't predict what will happen in the tax debate over the next several years, but I can confidently predict that with long and variable lags the kind of analytical work contained in the papers presented at this conference will make an important difference in the shape of our tax system. I have to say that the scene here at this lunch seems incomplete without Joe Pechman. Joe was occasionally wrong, usually right, and never in doubt. His good cheer and good sense have much to do with why Brookings has been at the center of tax debates for more than a generation. I believe that he has been an example and role model. - not just for myself but for many of the speakers at this conference. Four Criteria Tax reform must be evaluated in terms of its effects on deficit reduction, economic growth, simplicity and fairness. We in the administration will continue to evaluate tax proposal in terms of these criteria. Today I want to examine and raise questions about so-called flat tax proposals from these perspectives. As I have said often in the last few weeks, the flat tax is a bad idea whose time should never come. But that is not to say the present system is okay or there are not ideas associated with the flat tax that have merit. The Present Economic Context The tax system is a tool of economic policy. How it should be used depends on the economic context. Before plunging into an analysis of the flat tax, let me offer some observations on the current economic context. RR-875 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 1) The US now has a strong macroeconomic foundation for economic gro\\th. The deficit has declined for 3 years in a row and is now the lowest in the industrialized world. Building on this base, there is now a bi-partisan consensus on the need to balance the budget on a specific 7 yr time-table on rigorous CBO standards and on the basis of spending cuts. Inflation is lower than in a generation and its pernicious interaction with the tax system is largely a problem of the past. With these developments, it is perhaps not surprising that capital costs have fallen dramatically as the stock market has soared. As Jim' Tobin recognized long ago, the markets valuation of existing assets is the best single summary statistic for incentive to invest in new asset. And the Q ratio has never been higher. Second, the aggregate US economy is now in very good shape. While its pace will .fluctuate from quarter to quarter, economic expansion continues. This is the first investmentled low-inflation recovery since John Kennedy was president. Investment in equipment, tools for our workers, as a share of GDP is at a post-war high. International comparisons provide an indicator of how we were doing relative to how we could be doing. The US began the 1990s as the richest and most productive country in the world, and it is now clear it will pull away over this entire decade - growing more rapidly than the economies of Europe or Japan. Rising Inequality Third, the fruits of prosperity have not been shared evenly. Even as our economy has grown for many ears now, median wages have not risen as the real income of the least skilled have declined by 20% or more. The decline in opportunities for less skilled workers in our country surely has something to do with the fact that one in 50 adult American males between age 20 & age 50 are now in jail and nearly one-eighth are without work - as the number of labor force dropouts has risen sharply. At the same time, the global economy presents an ever more attractive opportunity to a small most able minority of our work force. That is why the real income of the top 1% of American workers has nearly doubled over the last decade. Rising inequality is a fact. In my view, it is a great and dangerous mistake to suppose the poor are getting poorer because the rich are getting richer. As the President has said so often, he wants to see more millionaires in America. We need economic growth, and it is inevitably driven by those who succeed. But, equality in assessing who should be taxed more and who should be taxed less, ability to pay has to play an important role on anybody's economic or political theory. I dwell on these points on changing economy because the backdrop for our current tax reform debate is very different than the setting of the debates of 10 - 30 yrs ago. With capital costs down, investment up, middle class falling behind, the priorities of the early 1980s of providing more investment incentives - even at the expense of fairness, should not be the top priorities of today. Today we do need to spur economic growth in any way we can. But at least equally, we need to make sure that its benefits are widely shared. Let me turn then to the flat tax and discuss the problems it raises in each of the four critical areas: deficit neutrality, economic growth, siI?-Plicity, and fairness. Deficit Reduction First, deficit reduction. I don't think anyone wants to see us embark on reforms that would raise the deficit. We need to work to do what we can to cut spending and we will. But deficit neutrality must be a touchstone in evaluating tax reform proposals. There is a tendency in discussions of tax reform to make proposals look more attractive by revenue estimating some but not all of their features. Let me concentrate on the so-called Armey flat tax. Because it has been specified in more detail than many other proposals. It is the Treasury's estimate that at the proposed 17% tax rate, this proposal will lose $138.3 billion at 1996 income levels - implying a 7 year revenue loss of more than $1 trillion - a figure larger than anybody' s total proposal in the great budget discussion we are now having. Making the proposal neutral would require imposing tax burdens at a flat rate of 20.8%. More than 20% greater than the rate suggested by its authors. Allowing for just payroll tax deductions as suggested by the Kemp commission and mortgage, interest and charitable deductions would raise the rate on some estimates to 25%. And, allowing transition relief for existing assets and deductions for state and local taxes would add another 4 - 5% points to the rate - bringing it close to 30%. Proponents suggest that these rates are not necessary because of the wondrous growth dividend a flat tax would bring about. As Yogi Berra, I might say, I get a sense of Deja V oodoo hearing about voodoo economics all over again. Let's be clear, the official forecasts have, if anything, been too optimistic about the effects of tax reform when tax rates were cut. For example, in 1982, Treasury forecast revenue growth from $631 billion to $802 billion in 1985. CBO forecast revenue growth to $781 billion in FY85. Actual revenues were far below forecast $731 billion in FY1985. I could make similar comparisons using many different base years. Conversely, the 1993 increases in tax rates on the highest income tax payers did not produce the recession or the revenue loss forecast by the supply siders. For the only year that data are now available, (1993) individual income tax liabilities came in 1% above Treasury's $499 billion forecast. Moreover, it is now become clear to objective observers that the apparent slower growth between 1992 and 1993 in taxes paid by the highest income tax payers can be fully explained by documented shifts in compensation from the first quarter of 1993 to the latest quarter of 1992 to avoid the anticipated changes in tax rates. Economic Growth Let me tum now to economic growth. Here there are three concerns about the flat tax proposals as they are usually discussed. Three concerns: the impact on savings; the impact on businesses' economic health; the impact on economic stability. Doubtful Effects on Saving One of the chief advantages that are put forth for the flat tax is that replacing income taxes with taxation of consumption could boost national savings by raising the return on savings. Long-term decline in the rate of private savings is a major economic concern. So anything a flat tax could offer in this regard would be very significant. Unfortunately, the predictions. as I have learned painfully, of some standard theoretical economic models about the effects of changes in rates of return on private savings are not borne out. The 1980s with a dramatic reduction in tax rates and a disinflation induced increase in real interest rates provide a very good natural experiment. Real after tax interest rates on ten year Treasury bonds rose from 112 percent in the 1970s to 5.4% in the 1980s. Real yields on municipal bond - an alternative proxy for after tax returns - increased form negative 1 in the 1970s to 3.8% in the 1980s. And the private savings declined from 8.1 % in the 1970s to 6.1 % in the 1980s. As the traditional target saving argument highlights, increases in rates of return can actually reduce private savings. There are other reasons for wondering whether a flat tax might not depress savings. Current tax rules favor liquid savings vehicles like life insurance, pensions and IRS which keep money out of reach for a long time. They provide an incentive for financial institutions to sell savings -- something that would be lost under the flat tax. Moreover, corporate savings through retained earnings now encouraged by dividend taxes, would, according to most estimates, decline when they were eliminated. A decline that would not be fully offset by an increase in personal savings. All in all, promoting savings is not a reason to revolutionize the tax system. Flat Tax Harm to Business Most popular discussion has focused on flat tax effects on individuals. But the flat tax could very likely be very burdensome for many businesses. It is true that it would substitute expensing for the amortization of purchases of equipment and structures. But it would also eliminate interest deductions, disallow depreciation allowances on past investments, and impose taxes on fringe benefit payments. I am told that there are many corporate treasurers who have not been pleased with when they have filled out the post-card that their companies would need to send to the IRS under a flat tax. Let me dwell for just a moment on one aspect of this: the non-deductibility of interest under a flat tax. It is all very well to argue, as economists are wont to do, that bond holders and stock holders are just suppliers of capital in different forms. But, for a grocery store that finances its inventory with bank loans, or a heavily mortgaged wholesale operating on a very thin margin, a tax that did not allow interest to be treated as a cost could well be the difference between positive and negative profits. Exacerbation of Business Cycles I am also concerned by what a flat tax would mean for automatic stabilization. The lower marginal tax rates would tend to magnify business cycles by reducing the cushion now provided by falling tax receipts in recessions, and rising tax receipts in booms. More importantly, the expensing of investment feature contained in the flat tax might well make corporate tax collections highly counter-cyclical as investment contracted in recessions and rose in booms. And, there is even a final point. Depending on the rules governing net operating losses, an issue presumably to be dealt with on the worksheets leading up to the post card tax return, firms might well have an incentive to avoid making investments in years when their profitability was depressed. These arguments suggest to me the capital formation case for economic benefits of a flat tax is simply not there. I don't know about the other benefits, it is worth remembering that it would raise marginal tax rates for people in our economy who already face the highest marginal tax rates - the working poor. It's worth remembering that Treasury's estimate got the effects of the 1993 high income tax increase exactly right. And,finally, if I might descend into academic argument for a moment, even increases in economic efficiency through reductions in Harberger triangles do not always translate into increase in GNP. Simplicity Gains? What then about simplicity? As Herb Stein has observed, a postcard tax return is a bit obsolete when millions of tax payers can file by pushing buttons on a telephone, and millions more can file electronically. It is worth remembering that a flat tax would do nothing to simplify the current morass of rules regarding the definition of independent contractor that plagues small businesses; would not make it easier or unnecessary to distinguish between personal and business use of an automobile; and would not change the situation regarding home/office deductions. Nor would tax shelters be a thing of the past. I don't know whether Marty Ginsberg's incorporate every automobile that is sold" plan would really work under the flat tax, but I do know that it would magnify the pressures under the current tax to convert ordinary income into capital income. I was once told that a third of the code is directed at rules preventing the conversion of income into capital gains form. These protections would have to be more, not less strong under a flat tax. When I think about issues relating to the transition to a flat tax, I am reminded of Chairman Mao's assertion that the cultural revolution was just a transition problem. Think about all the lRAs in existence today. There will have to be a special provision for them 35 years from now when their owners retire. More seriously, what is to be done that is both simple and fair with the $3 trillion in depreciation deductions that lie ahead for past investments in physical capital? If these are simply wiped away, the playing field will be completely unfair for those who make investment tomorrow to compete with those who invested yesterday. If some scheme is found for permitting these deductions, extremely complex rules would be necessary whenever assets are transferred. And, in any event, the low rates promised by flat tax advocates would start to nse. Finally in the area of simplicity, there is the reality that the United States is now alone in the world. A flat tax would convert the United States into the world's greatest tax haven. Countries would shift borrowing out of the United States and into countries where interest was deductible. It would shift investment into the United States. It is hard to believe that foreign governments would not respond. They might well attempt to extend their tax reach beyond their borders into the US by taxing non-repatriated income, or by imposing onerously strict recapitalization rules on US business operations within their borders to prevent perceived exploitation of interest deductibility. And I leave to the lawyers the problem of drafting rules to cover the transfer pricing type problems associated with tied sales and financing transactions between unrelated parties. Fairness Let me turn finally to the question of fairness. Before getting to the core issues of vertical and horizontal equity, it is worth noting two problems that are small compared to the problems of a flat tax, but large by most other standards: First, a flat tax would scale back the current incentive for employer-provided health insurance. Gruber and Poterba estimate that the volume of such health insurance might decline by as much as 12%. If only half of this decline represented a decline in the number of persons covered, this could mean more than 5 million additional uncovered Americas. It is clear that we as a country are not going to take active public measures to universalize access' to health insurance - despite the adverse selection problems that plague the health insurance market. I cannot help but wonder whether this is the right time to scale back the principal incentive we provide for there to be insurance for typical American families. And then there is the question of owner-occupied housing. I do not know if Green Hendershott and Capoza estimate that the flat tax could reduce the price of housing by 38% and encourage substantial defaults is correct, but it is hard to believe that it would not impose a windfall loss on millions of Americans who made investments in reliance on the current tax code. I don't' think this is fair. But, the core fairness problem with the flat tax goes to the income it taxes and the income it doesn't. Consider a man who inherits $10 million from the spectacularly successful investments of his father who earns $600 thousand a year on this investment, and who hires a chef who is paid $50,000 a year. Who should pay more taxes? If you think the chef should pay more, perhaps you see a fairness case for the flat tax. If not, there is a problem. Another set of fairness problems stems from which income groups would see their taxburdens lightened, and who would bear a heavier burden under the flat tax. A revenueneutral Arrney-Shelby proposal would lower the tax burden still further on the higher-income groups that have benefitted the most over the past two decades, by establishing a single rate where there are now multiple rates, and by exempting income from capital when capital income is received disproportionately by the highest income families. The combination of those two effects would reduce taxes on upper-income Americans -- families with incomes of $200,000 or more. On the other hand, it would increase taxes for the group of families with income below $200,000. If the flat tax rate were 20.8 percent with the proposed standard deductions, these families would see their Federal taxes fall by more than 28 percent, while families in income groups under $200,000 would pay on average between 5 and 70 percent more in taxes. For example, the total tax burden for a typical married couple with $50,000 of wages, two children, and employer provided health insurance would increase by more than $1600. A two-child, married couple earning about $18,000 would see their tax load increase by more than $2400. The heaviest blows would fall on the working poor and low-income families, even though they benefit from generous standard deductions that eliminate direct taxation of their wages, for two reasons. These families would see their wages drop or fringe benefits reduced because of the denial of payroll tax deductions and deductions for health insurance at the business level -- they would effectively bear the burden of these taxes. Second, the Armey-Shelby flat tax plan would eliminate entirely the earned income tax credit (EITC). Flat tax advocates sometimes claim that the EITC will no longer be necessary because low income families will be exempt from income taxes by the increased standard deductions. But these flat tax supporters ignore the vital role of the EITC in the tax-transfer system. Under current law, many low income families are already exempted from income tax because the tax threshold is set roughly equal to the poverty level. But the EITC provides a mechanism, through the income tax system, to offset the distortionary effects of other taxes imposed directly or indirectly on low-income families. For example, a low-income worker currently loses about 15 cents in payroll taxes (including the employer portion) and 24 cents in food stamp benefits for each dollar earned. For a very low-income family, the EITC offsets this work disincentive by providing up to a 40 percent credit for very dollar earned. By making work pay, the EITC encourages parents to take the step from welfare to the workforce. Currently, about 19 million workers and their families receive the EITC. Some of these families would lose the EITC but receive an offsetting benefit from the increase in standard deductions. But repealing the EITC in the context of the Armey-Shelby flat tax would cause about 15 million workers and their families who have income below the current tax thresholds to lose an average of $1,360 per taxpayer in benefits. What about the claim that the flat tax would lower marginal tax rates for many taxpayers? The average reduction in marginal tax rates is greatly exaggerated by looking only at the decline in the top marginal rate on income, which falls from 39.6 percent to 20.8 percent under a revenue-neutral version of the Armey-Shelby tax. A family of four with the estimated 1996 median income for four-person families of $48,700 would actually see their Federal individual marginal tax rate increase from 15 percent to 20.8 percent. Taking account of both halves of the payroll tax and state and local income taxes (at an average state marginal rate of 5%), the family would see its total marginal tax rate increase from 34.6% to 42.7% under the flat tax. The increase comes about not only because of the increase in the Federal marginal rate, but because of the elimination of deductions for state and local income taxes and the employer portion of the payroll tax. Just looking at Federal individual income tax rates, the Armey-Shelby flat tax would increase marginal tax rates for 39,9 million taxpayers (28%), keep marginal rates the same for 4l.2 million taxpayers (29 percent), and reduce marginal rates for 59.4 million taxpayers (42 percent). Marginal rates would decline or remain the same for low-income taxpayers and very high income taxpayers. The marginal tax rate increases would be targeted at middle income taxpayers who are currently in the 15% bracket. Conclusion Let me conclude by emphasizing that the Administration is committed to evaluating all proposed reforms on the criteria of fairness, efficiency, simplicity, and revenue adequacy. By that token, it would be a serious mistake to consider reforms, such as the flat tax, that would reduce revenue and interfere with our overriding national goal of reducing the deficit. Nor given the economic developments that have unfolded over the past decade should we be considering proposals that would shift the tax burden still further from upper income to lower and middle income families, create serious economic: disruptions, or substantially weaken Federal support for important social programs and goals. Evaluated by these criteria, the flat tax has many many problems. Finally, I want to compliment once again the researchers who have contributed to this conference. They have provided an empirical and analytic base for evaluating the flat tax and other proposals. By doing so, they have improved policymakers' range of choices, and have helped to ensure that tax reform will be based on an understanding of reforms' true consequences, not unsupported assertions and promises. Thank you. NEWS TREASURY OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220 • (202) 622·2960 NEWS ADVISORY February 20, 1996 Contact: Darren McKinney (202) 622-2960 SUMMERS, WEISE TO TOVR V.S./MEXICO BORDER Treasury's Deputy Secretary Lawrence H. Summers will join U.S. Customs Service Commissioner George Weise for a tour of Customs border facilities in the San Diego area this Friday morning, February 23. Following private morning meetings with Customs inspectors, agents and managers, and a tour of a Customs drug seizure vault (pool video and still photos will be provided), Summers and Weise will address a meeting of the Border Trade Alliance at Otay Mesa's Main Port of Entry at approximately lla.m. This meeting will be open to the mecia. A general press availability is tentatively scheduled at Otay Mesa for 11:45 a.m. - 30 - Customs/San Diego Contact: Bobbie Cassidy (619) 557-5772 RR-876 UBLIC DEBT NEWS Department of the Treasury • Bureau oftM PUb1icbebt' .. Washmgton, DC 20239 FOR IMMEDIATE RELEASE February 20, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $13,203 million of 26-week bills to be issued February 22, 1996 and to mature August 22, 1996 were accepted today (CUSIP: 912794Z72). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.72!!> 4.75!!> 4.75!!> Investment Rate 4.92!!> 4.95!!> 4.95% Price 97.614 97.599 97.599 Tenders at the high discount rate were allotted 31!!>. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $48,584,794 Accepted $13,203,319 $42,196,483 1,177,911 $43,374,394 $6,815,008 1.177,911 $7,992,919 3,550,000 3,550,000 1,660,400 $48,584,794 1. 660,400 $13,203,319 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.73 - 97.609 RR-877 4.74 - 97.604 UBLIC DEBT NEWS ! ::' '.' , ' . ': Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239 ~ t ._-' ...... I ,,-, , , _J FOR IMMEDIATE RELEASE February 20, 1996 \ I: ,: :. "I CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $13,308 million of I3-week bills to be issued February 22, 1996 and to mature May 23, 1996 were accepted today (CUSIP: 912794Y81). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.75% 4.78% 4.78% Investment Rate 4.89% 4.92% 4.92% Price 98.799 98.792 98.792 Tenders at the high discount rate were allotted 48%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $47,866,843 Accepted $13,308,103 $42,879,376 1, 441,603 $44,320,979 $8,320,636 1, 441, 603 $9,762,239 3,373,664 3,373,664 172,200 $47,866,843 172,200 $13,308,103 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.76 -- 98.797 RR-878 4.77 -- 98.794 DEPARTMENT OF THE TREASURY ,NEWS TREASURY OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASIDNGTON, D.C .• 20220. (202) 622-2960 FOR RELEASE AT 2:30 P.M_ February 20, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY'S WEEKLY BILL OFFERING The Treasury will auction two series of Treasury bills totaling approximately $24,400 million, to be issued February 29, 1996. This offering will result in a paydown for the Treasury of about $2,075 million, as the maturing weekly bills are outstanding in the amount of $26,484 million_ Federal Reserve Banks hold $7,090 million of the maturing bills for their own accounts, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders_ Federal Reserve Banks hold $4,313 million as agents for foreign and international monetary authorities, which may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Due to the public debt limit and Treasury's need to plan for the debt level, additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in these auctions_ Tenders for the bills will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D_ C_ This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. ' Details about each of the new securities are given in the attached offering highlights. 000 Attachment RR-879 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS TO BE ISSUED FEBRUARY 29, 1996 February 20, 1996 Offering Amount . $12,200 million $12,200 million Description of Offering: Term and type of security CUSIP number Auction date Issue date Maturity date Original issue date Currently outstandingMinimum bid amount Multiples . 91-day bill 912794 Y9 9 February 26, 1996 February 29, 1996 May 30, 1996 June I, 1995 $32,661 million $10,000 $ 1,000 182-day bill 912794 3E 2 February 26, 1996 February 29, 1996 August 29, 1996 February 29, 1996 $10,000 $ 1,000 The following rules apply to all securities mentioned above: Submission of Bids: Noncompetitive bids Competitive bids Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids . (1) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield 35% of public offering Maximum Award . 35% of public offering Receipt of Tenders: Noncompetitive tenders Competitive tenders Payment Terms . Prior to 12:00 noon Eastern Standard time on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date , DEPARTMENT OF THE TREASURY ; ~:, 1789 TREASURY NE W S _ OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE February 20, 1996 Contact: Michelle Smith (202) 622-2013 TREASURY TO OPEN NADBANK OFFICE IN LOS ANGELES Treasury Deputy Secretary Lawrence H. Summers will speak at the opening of the North American Development Bank's (NADBank) U.S. Community Adjustment and Investment Office at noon this Thursday, February 22 at 13191 Crossroads Parkway North, City of Industry, California. Joining Deputy Secretary Summers will be Congressman Esteban Torres and NADBank deputy managing director Victor Miramontes. The NADBank is a binational bank established by the United States and Mexican governments to fund environmental infrastructure projects within 100 kilometers of the border and to provide funding for community adjustment and investment in furtherance of the purposes of NAFT A. The Los Angeles office will work with the U. S. Government to provide needed capital for business adjustments and retooling in order to create private-sector job opportunities for displaced workers. -30- RR-880 For press releases, speeches, public schedules and official biographies, call our 24-hollr fax line at (202) 622-2040 DEPARTMENT OF THE TREASURY 1REASURY (~lNE W 178<) _ S OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR IMMEDIATE RELEASE February 21, 1996 CONTACT: Office of Financing 202/219-3350 TREASURY TO AUCTION CASH MANAGEMENT BILLS The Treasury will auction approximately $29,000 million of 55-day Treasury cash management bills to be issued February 23, 1996. Competitive and noncompetitive tenders will be received at all Federal Reserve Banks and Branches. Tenders will not be accepted for bills to be maintained on the book-entry records of the Department of the Treasury (TREASURY DIRECT). Tenders will not be received at the Bureau of the Public Debt, Washington, D.C. Tenders for the bills will not be accepted from Federal Reserve Banks for foreign and international monetary authorities. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and issue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about the new security are given in the attached offering highlights. 000 Attachment RR-881 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERING OF 55-DAY CASH MANAGEMENT BILL February 21, 1996 Offering Amount . . . . . . $29,000 million Description of Offering: Term and type of security . CUSIP number . Auction date . Issue date . . . . . . . . Maturity date . . ... Original issue date . . Currently outstanding . . . Minimum bid amount . . . . Multiples. . . . . . . Minimum to hold amount . . Multiples to hold .... Submission of Bids: Noncompetitive bids Competitive bids 55-day Cash Management Bill 912794 Y3 2 February 22, 1996 February 23, 1996 April 18, 1996 October 19, 1995 $25,629 million $10,000 $1,000 $10,000 $1,000 Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids ( 1 ) Must be expressed as a discount rate with two decimals, e.g., 7.10%. (2 ) Net long position for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position is $2 billion or greate:::-. (3 ) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid at a Single Yield · 35% of public offering Maximum Award . · 35% of public offering . . . Receipt of Tenders: Noncompetitive tenders Prior to 12:00 noon Eastern Standard time on auction day Competitive tenders . . . · Prior to 1:00 p.m. Eastern Standard time on auction day Payment Terms . . . . . . . Full payment with tender or by charge to a funds account at a Federal Reserve Bank on issue date 1REASURY NEWS OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 FOR RELEASE AT 2:30 P.M. February 21, 1996 CONTACT: Office of Financing 202/219-3350 TRFASURY TO AUCTION 2 - YEAR AND 5 - YEAR NOTES TOTALING $30,250 MILLION The Treasury will auction $18,250 million of 2-year notes and $12,000 million of 5-year notes to refund $26,868 million of publicly-held securities maturing February 29, 1996, and to raise about $3,375 million new cash. In addition to the public holdings, Federal Reserve Banks hold $1,703 million of the maturing securities for their own accounts, which may be refunded by issuing additional amounts of the new securities. The maturing securities held by the public include $5,297 million held by Federal Reserve Banks as agents for foreign and international monetary authorities. Due to the Treasury's need to avoid exceeding the debt limit, no additional notes will be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. Maturing notes held by Federal Reserve Banks as agents for such accounts may be rolled over on a noncompetitive basis within the public offering amounts. Both the 2-year and S-year note auctions will be conducted in the single-price auction format. All competitive and noncompetitive awards will be at the highest yield of accepted competitive tenders. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D. C. This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular (31 CFR Part 356) for the sale and isSue by the Treasury to the public of marketable Treasury bills, notes, and bonds. Details about each of the new securities are given in the attached offering highlights. If the auction of 2-year Treasury notes to be held Tuesday, February 27, 1996, results in a high yield in a range of 5.125 percent through and including 5.249 percent, the 2-year notes will be considered an additional issue of the outstanding 5-1/8 percent 5-year notes of Series K-1998 (CUSIP No. 912827J94) originally issued March 1, 1993. The additional issue of the notes would have the same CUSIP number as the outstanding notes, which are currently outstanding in the amount of $11,686 million. If the auction results in the issuance of an additional amount of the Series K-1998 notes rather than a new 2-year note, it will be noted at the bottom of the Treasury's auction results press release. 000 Attachment RR-882 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC OF 2-YEAR AND 5-YEAR NOTES TO BE ISSUED FEBRUARY 29, 1996 February 21, 1996 Offering Amount . Description of Offering: Term and type of security Series CUSIP number Auction date Issue date Dated date Maturity date Interest rate Yield . Interest payment dates. Minimum bid amount Multiples . Accrued interest payable by investor Premium or discount . $18,250 million 2-year notes AC-1998 912827 W9 9 February 27, 1996 February 29, 1996 February 29, 1996 February 28, 1998 Determined based on the highest accepted bid Determined at auction .The last calendar day of August and February through February 28, 1998 $5,000 $1,000 None Determined at auction $12,000 million 5-year notes F-2001 912827 X2 3 February 28, 1996 February 29, 1996 February 29, 1996 February 28, 2001 Determined based on the highest accepted bid Determined at auction The last calendar day of August and February through February 28, 2001 $1,000 $1,000 None Determined at auction The followinq rules apply to all securities mentioned above: Submission of Bids: Accepted in full up to $5,000,000 at the highest accepted yield Noncompetitive bids (1) Must be expressed as a yield with three decimals, e.g., 7.123% Competitive bids (2) Net long position for each bidder must be reported when the sum of the total bid amount, at all yields, and the net long position is $2 billion or greater. (3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. Maximum Recognized Bid 35% of public offering at a Single Yield 35% of public offering Maximum Award . Receipt of Tenders: Prior to 12:00 noon Eastern Standard time on auction day Noncompetitive tenders Prior to 1:00 p.m. Eastern Standard time on auction day Competitive tenders Full payment with tender or by charge to a funds account at a Payment Terms . Federal Reserve Bank on issue date DEPARTMENT ,- OF THE ~ TREASURY NEWS TREASURY OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N .W.• WASHINGTON, D.C. • 20220 • (202) 622-2960 ADV 8:30 AM. EST Remarks as prepared for delivery February 22, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN OCC CONFERENCE ON COMMUNITY DEVELOPMENT I appreciate the opportunity to be the keynote speaker on an issue critical to the future of this country. I believe this nation will fall far short of its full economic potential unless our cities and economically distressed rural areas are healthy. Community lending can play a pivotal role in attaining that goal, while simultaneously creating profit opportunities for business. Today I want to discuss what government and the private sector can accomplish together for these areas. I will focus on two matters central to my role as Treasury Secreta..ry: financial capital and law enforcement. Let me begin by speaking more broadly about the policy debate under way in this country and its impact on community development. There is a great debate in Washington about the future of this country. The Wall Street Journal's Washington bureau chief describes it as the most important in 30 years. I agree. The debate is about differing views of what will best serve our economy to compete and succeed globally, for the years and decades ahead, with rising living standards for all Americans. Both sides are committed to fiscal discipline and balancing the budget. Beyond this, the president's vision is built upon robust investments in education and training, in technology, in helping people in our inner cities and other distressed areas become part of the mainstream economy, and effective programs in Medicare and Medicaid and the other components of our social compact. The other, that of the congressional majority, entails relatively severe cuts in those areas, including tax increases on the lowest wage working Americans by reducing the Earned Income Tax Credit, and large tax cuts that go primarily to the most affluent and which in my view do not have economic benefits commensurate with the cost. RR-883 (more) For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 This debate is central to the future of our cities. And in my view the future of our cities and our other distressed areas is central to the future of our economy and our nation, and therefore the future of all Americans, no matter where they live or work. The budget debate has a high profile, but the problems of our cities and distressed rural areas do n04 and should. Our responsibility is clear: we must replace economic distress and criminal violence with economic opportunity and the freedom to live in security. Consider the scope of our problems. A recent Committee for Economic Development report said that a third of the neighborhoods in our 100 largest cities are already distressed or in danger. The Census Bureau says that well over four in 10 Americans in poverty live in our inner cities. The Organization for F ~onomic Cooperation and Development in Paris, the OECD, ranks us at the top of a list of 16 industrialized nations in income disparity. Moreover, the data in that study says that poor children in the United States are poorer than the children in about all other Western industrialized nations. That is not a formula for a healthy economy or social fabric for any of us. It will take a number of years and a comprehensive set of policy responses to do what needs to be done. Today, I want to focus on two issues I mentioned: Firs4 how access to financial capital can create jobs, opportunity and hope, and second, how we can create a safer environment in our cities by battling back against crime and especially gun violence, because economic development can't just happen unless one creates an environment in which people want to open a business, build a home, raise a family. I mention crime and gun violence for two reasons -- because the Treasury Department has about 40 percent of the law enforcement officers in the federal governmen4 including the Bureau of Alcohol, Tobacco and Firearms which deals with guns. And I mention crime because I believe in a holistic approach to economic development. I also want to offer a few words about how our business community can participate in our communities. Investing in human capital is an important facet of addressing the needs of the residents of our inner cities, but there also is a shortage of financial capital in our inner cities. The answer to the problems of the inner cities lies in empowermen4 not transfer payments, though we must maintain an effective safety net. I was in the South Bronx last summer. It was remarkable. I saw the resurgence of housing, not over one block but over an enormous area. And, I talked to business owners who had trouble getting capital, but did get the capital and are building businesses and creating jobs. Now, though, the very programs that were essential in the developing rebirth of the South Bronx are threatened in the budget debate. 3 For example, the Community Reinvestment Act is under threat. As you know, the CRA encourages federally insured financial institutions to serve creditworthy borrowers in neighborhoods which have been ignored or overlooked in the past. The CRA is working, and working well. I suspect many of you saw the story last week in the Wall Street Journal about how successful community lending is becoming. The story pointed out how community lending -- and I'm talking, as I said, about loans to creditworthy borrowers -- is just plain good business. I agree. The administration has worked hard, with financial institutions and community groups, to make the CRA more effective and less burdensome. But there is sentiment by some in Congress to curtail CRA rather than give the new program the opportunity to work. The second area critical to improving capital access is the Community Development Financial Institutions Fund. It provides seed and expansion capital through loans, grants and equity investments to community based banks, credit unions, community loan funds, microenterprise lenders, and the like. These organizations make loans and investments to help small businesses and for housing, and they help people find jobs and start businesses. Three years ago this project had broad bipartisan support, but today it is opposed by the congressional majority. We recently issued our first call for CDFIs and mainstream financial institutions around the country to apply to the Fund for assistance and incentives, and the response was very encouraging -- requests outstripped the available resources by roughly 10-to-I. We cannot allow this very good program to be destroyed. I would urge you, on both the CRA and the CDFI Fund, and on the programs that invest in human capital -- like Head Start, the Job Corps and the rest -- to take an active role in building and sustaining political support for these initiatives. If I might digress for a moment, I had the opportunity recently to open the inaugural meeting of the CDFI Fund Advisory Board. We got into a roundtable discussion about community lending. It was fascinating talking with people working in their communities. I looked back over my notes of that discussion and there are several points they made that I want to touch on. Virtually everyone said that it is critical in lending into a community, most particularly business loans, that there be a support structure of professionals available to advise and provide business mentoring for small businesses. I agree. Second, there was a unanimity that the approaches we have taken to the Community Reinvestment Act and the CDFI Fund permits a great deal of local flexibility as opposed to placing a national template over all regions of the country, and that this flexibility was the best approach. Third, I found tremendous support for preserving the low income housing tax credit. 4 Fourth, many of those I spoke to had experience in the area of microlending, and reported very good results in the real world, both in generating economic activity and repayment rates. And finally, I heard considerable interest in the idea of finding ways to securitize the kinds of loans that are being made in communii.j development. Let me spend a moment on the microenterprise point, the third area in the broader development agenda. The CDFI Fund is well positioned to launch new efforts in these areas in the coming years. Microenterprise lending is an approach which President and Mrs. Clinton are familiar with from Arkansas. It has had remarkable success in low income areas in other countries and should here too if applied on a broad scale. Micro-enterprise lending is a highly cost-effective way to put money into the hands of entrepreneurs who need very limited amounts of capital, for example, lending someone who wants to open a tailor's shop money for a sewing machine, or lending a mechanic money for special tools to take on more complex and profitable repair jobs. President Clinton asked Treasury to launch a microenterprise project through the CDFI Fund, including coordination across the government. Moreover, at the president's direction, we are establishing a Presidential Award program so those involved in micro lending can compete for recognition just as large American corporations compete for the Baldrige Award. The fourth point I want to touch on is the area of tax incentives. As part of the President's 1997 budget, I'm pleased to announce that we've included a new, targeted tax incentive to encourage companies to clean up contaminated, abandoned industrial sites known as ''brownfields,'' in economically distressed rural and urban areas. By allowing companies to write off the costs of clean-up in five years instead of the life of the propery, we can get these properties back into productive use. The Vice President will be r.:..:king an announcement of another initiative a: :he White House Empowerment Conference later this morning, so stay tuned. I encourage all of you to take a close look at opportunities these incentives may make more attractive. Before I touch on public safety issues, I want to add a word about private sector involvement in distressed areas. The problems of these areas affect all Americans, are critical to our economic future, and may well be our nation's most important domestic economic and social issue. Substantial, systemic and ongoing involvement of the business community is critical to bringing the inner cities and their residents into the economic mainstream. I bring this up at each speech I give to a corporate audience. The private sector, by mentoring small businesses, counseling fust-time home-buyers, working in the schools and the like -- can have an important long term impact on the economic health of the inner cities and other distressed areas. 5 Let me end with a brief note on the topic of public safety. You can invest in human capital. You can make financial capital available. You can volunteer to help. But if you don't have public safety, it all isn't going to work. Crime is a broad issue, and I want to comment on just one facet of the administration's anti-crime efforts here today as it relates to my responsibilities as Treasury Secretary. Gun violence is becoming particularly acute amongst this nation's young. In 1994, just under 50,000 people under the age of 18 were arrested on weapons charges. At Treasury, we are looking at better ways to find and prosecute gun-pushers. But just as there is a debate over the budget, there is also an important debate over law enforcement. The President got the Brady Law and assault weapons ban enacted. But now there are strong efforts to roll back these gains. Just as is the case with the economic programs critical to our cities, we cannot ~ermit a rollback of the gains in law enforcement. You, as people involved in community development, have a vital stake in these law enforcement issues. And we all have a vital stake in our cities and distressed rural areas, no matter where we live or work, because -- as I said at the outset -- our nation will fall far short of its economic potential unless we deal effectively with the challenges facing these areas. In helping rebuild our nation's communities, no one can afford to sit by the sidelines. That plain fact has driven remarkable progress in the last decade, as community-based development has brought homes, businesses, jobs, and renewed hopes to neighborhoods across our country. Businesses and banks, national nonprofit intermediaries and foundations, community groups and civic organizations, state, local, and federal government -- all have joined in partnership to tap into America's entrepreneurial spirit and improve our national well-being. We now have the chance to make locally driven, private sector partnerships reach communities across the land. Our challenge is to act as catalyst with seed capital and a helping start. The challenge to individuals is to take advantage of educational opportunities and commit to hard work. The challenge to communities is to organize themselves for change. And the challenge to the business sector is to see its long-term self-interest in bringing everyone into the mainstream economy. It is going to take all of us rising to these challenges to help bring all Americans into the economic mainstream. But I believe that that is the only way the United States can reach its full potential in the global economy of the 21st century. And the banking and financial services sectors of our economy can play a critical role in meeting this challenge. Thank you. UBLIC DEBT NEWS Department nf the Trcasu:-v • Bureau of the ~ubltc Debt ..•. Wa~h;~~;on. FOR IMMEDIATE RELEASE February 22, 1996 DC 20239 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 55-DAY BILLS Tenders for $29,192 million of 55-day bills to be issued February 23, 1996 and to mature April 18, 1996 were accepted today (CUSIP: 912794Y32). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 5.00%' 5.02%, 5.02%" Investment Rate 5.12%' 5.14%' 5.14%" Price 99.236 99.233 99.23::3 Tenders at the high discount rate were allotted 97%'. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 5.01 - 99.235 RR-884 Received $85,705,660 Accepted $29,191,759 $85,705,060 600 $85,705,660 $29,191,159 600 $29,191,759 o o o $85,705,660 o $29,191,759 Monthly Treasury Statement of Receipts and Outlays of the United States Government For Fiscal Year 1996 Through January 31, 1996, and Other Periods Highlight This issue includes the transfer of the remaining assets and liabilities of the Resolution Trust Corporation to the FSLlC Resolution Fund. RECEIPTS, OUTLAYS, AND SURPLUS/DEFICIT THROUGH JANUARY 1996 600 B I L L I 0 N S Contents Summary, page 2 500 Receipts, page 6 400 Outlays, page 7 300 Means of financing, page 20 Receipts/outlays by month, page 26 200 Federal trust funds/securities, page 28 100 Receipts by source/outlays by function, page 29 0 Explanatory notes, page 30 -100 Compiled and Published by Department of the Treasury Financial Management Service Introduction of receipts are treated as deductions from gross receipts; revolving and management fund receipts, reimbursements and refunds of monies preViously expended are treated as deductions from gross outlays; and interest on the publiC debt (public issues) is recognized on the accrual basis, Major information sources include accounting data reported by Federal entities, disbursing officers, and Federal Reserve banks The Monthly Treasury Statement of Receipts and Outlays of the United States Government (MTS) IS prepared by the Financial Management Service, Department of the Treasury, and after approval by the Fiscal ASSistant Secretary of the Treasury, is normally released on the 15th workday of the month following the reporting month, The publication IS based on data provided by Federal entities, diSbursing officers, and Federal Reserve banks, Triad of Publications The MTS is part of a triad of Treasury financial reports, The Daily Treasury Statement is published each working day of the Federal Govemment It provides data on the cash and debt operations of the Treasury based upon reporting of the Treasury account balances by Federal Reserve banks, The MTS is a report of Government receipts and outlays, based on agency reporting, The US, Government Annual Report is the official publication of the detailed receipts and outlays of the Government It is published annually in accordance with legislative mandates given to the Secretary of the Treasury, Audience The MTS is published to meet the needs of: Those responsible for or interested in the cash position of the Treasury; Those who are responsible for or interested in the Govemment's budget results; and individuals and businesses whose operations depend upon or are related to the Government's financial operations, Disclosure Statement This statement summarizes the financial activities of the Federal Government and off-budget Federal entities conducted in accordance with the Budget of the U,S, Government, Le" receipts and outlays of funds, the surplus or deficit and the means of financing the deficit or disposing of the surplus, Information is presented on a modified cash basis: receipts are accounted for on the basis of collections; refunds Data Sources and Infonnation The Explanatory Notes section of this publication provides information concerning the flow of data into the MTS and sources of information relevant to the MTS, Table 1. Summary of Receipts, Outlays, and the Deficit/Surplus of the U.S. Government, Fiscal Years 1995 and 1996, by Month [$ millions] Period Receipts Outlays Deficit/Surplus (--) FY 1995 October ." ........... , ................ November . . , . . . . . . . . . . . .... , . , ...... December " , . . . . . . . . . . ................. January .... , ., ...... , .... February .. , ... ..... , ...... .................... March " April . . . . . . . . . .. .............. , ..... May . . . . . . .. . . . . June July . . .. . . . . . . . ........ " .... August ............. September 89,024 87,673 130,810 131,801 82,544 92,532 165,392 90,405 147,868 92,749 96,560 143,219 120,365 124,915 135,613 116,166 120,899 143,074 115,673 129,958 135,054 106,328 130.411 135,972 31,342 37,242 4,803 -15,635 38,355 50,543 -49,720 39,553 -12,814 13,579 33,851 -7,247 ........................... 1,350,576 1,514,428 163,852 October ................ .................. November .................. December .......... ................. , ............. January 95,593 90,008 138,271 142,922 118,352 128.458 132,984 123,647 22,758 38.450 -5,286 -19,274 Year-to-Date •••••••••••••.•••.••• , ••••• 466,793 503.441 36.648 Year-to-Date FY 1996 2 Table 2. Summary of Budget and Off-Budget Results and Financing of the U.S. Government, January 1996 and Other Periods [$ millions] Classification Total on-budget and off-budget results: .............. Total receipts .......... Budget Estimates Full Fiscal Year' Current Fiscal Year to Date This Month Prior Fiscal Year to Date (1995) Budget Estimates Next Fiscal Year (1997)' 142,922 466,793 1,414,641 439,307 1,473,929 110,615 32,307 356,788 110,005 1,046,796 367,845 332,363 106,944 1,088,626 385,303 ...................... . ................ 123,647 503,441 1,578,481 497,060 1,654,983 ................ ........................ 98,056 25,591 413,727 89,714 1,273,064 305,417 409,969 87,090 1,337,953 317,030 ..................... +19,274 -36,648 -162,840 -57,752 -179,054 On-budget surplus (+) or deficit (-) ................ Off-budget surplus (+) or deficit (-) ................ +12,558 +6,716 -56,939 +20,291 -225,268 +62,428 -77,607 +19,854 -247,327 +68,273 ............. -19,274 36,648 162,840 57,752 179,054 Means of financing: Borrowing from the public . ......................... Reduction of operating cash, increase (-) ......... By other means ...................................... -4,747 -16,959 2,432 28,588 495 7,565 195,312 -10,000 -22,472 73,006 -13,902 -1,352 213,415 ..................... On-budget receipts ... Off-budget receipts ................... Reduction in corporate subsidies Total outlays .......... On-budget outlays Off-budget outlays .. Total surplus (+) or deficit (-) Total on-budget and off-budget financing 1,000 2,000 ... No Transactions. Note: Details may not add to totals due to rounding. 'These figures are based on the Mid-Session Review of the FY 1996 Budget, released by the Office of Management and Budget on July 31, 1995. Figure 1. Monthly Receipts, Outlays, and Budget Deficit/Surplus of the U.S. Government, Fiscal Years 1994 and 1995 $ billions 180 160 140 120 100 80 60 40 20 0 -20 -40 -60 Outlays ./ ./ ...................... / i ~ ......... . ... \ ;' ..... Receipts Deficit(-)/Surplus -80~--~-r--.--.--.---.--.--.--.--,--,---r--,--,--, Oct. Dec. Feb. Jun. Apr. Aug. Oct. FY 96 FY 95 3 Dec. Jan. -34,361 Figure 2. Monthly Receipts of the U.S. Government, by Source, Fiscal Years 1995 and 1996 $ billions 1 20 04---r-~--.---r-~~~~--~--~~--.---r-~--.-~ Oct. Dec. Feb. Apr. Jun. Aug. Oct. FY FY 95 96 Dec. Jan. Figure 3. Monthly Outlays of the U.S. Government, by FunCtion, Fiscal Years 1995 and 1996 $ billions 180~--------------------------------------------, I Total Outlays Social Security & Medicare 1 Iinterest Oct. Dec. Feb. Apr. I Jun. Aug. Oct. FY FY 95 96 4 Dec. Jan. Table 3. Summary of Receipts and Outlays of the U.S. Government, January 1996 and Other Periods [$ millions] Classification This Month Current Fiscal Year to Date Comparable Prior Period Budget Estimates Full Fiscal Year' Budget Receipts Individual income taxes ......................................... . Corporation income taxes ....................................... . Social insurance taxes and contributions: Employment taxes and contributions (off-budget) ........... . Employment taxes and contributions (on-budget) ............ . Unemployment insurance ..................................... . Other retirement contributions ................................ . Excise taxes ..................................................... . Estate and gift taxes ........................................... . Customs duties .................................................. . Miscellaneous receipts ........................................... . 86.192 5,158 230,734 47,053 213,971 39,726 619,975 164,193 32,307 8,435 1,081 374 4,241 1,288 1,482 2,364 110,005 33,328 5,457 1,472 18,718 5,179 6,300 8,548 106,944 32,804 5,621 1,505 19,052 4,519 6,960 8,205 367,845 105,894 28,390 4,451 57,456 16,225 20,999 29,213 Total Receipts ................................................ . 142,922 466,793 439,307 1,414,641 (On-budget) ................................................. . 110,615 356,768 332,363 1,046,796 (Off-budget) ................................................ . 32,307 110,005 106,944 367,845 Reduction in corporate subsidies ....................•. 1,000 Budget Outlays Legislative Branch ............................................... . The Judiciary ........................................... . Executive Office of the President .............................. . Funds Appropriated to the President ........................... . Department of Agriculture ....................................... . Department of Commerce ...................................... . Department of Defense-Military ............................... . Department of Defense-Civil .................................. . Department of Education ....................................... . Department of Energy ........................................... . Department of Health and Human Services ................... . Department of Housing and Urban Development .............. . Department of the Interior ...................................... . Department of Justice ........................................... . Department of Labor ............................................ . Department of State ............................................ . Department of Transportation ................................... . Department of the Treasury: Interest on the PubliC Debt .................................. . Other .......................................................... . Department of Veterans Affairs ................................. . Environmental Protection Agency ............................... . General Services Administration ................................ . National Aeronautics and Space Administration ................ . Office of Personnel Management ............................... . Small Business Administration .................................. . Social Security Administration ................................... . Other independent agencies .................................... . Allowances ....................................................... . Undistributed offsetting receipts: Interest ........................................................ . Other .......................................................... . Total outlays ................................................. .. 262 320 768 939 60 3,191 20,839 1,248 80,891 10,678 9,907 5,515 102,466 8,785 2,156 3,740 11,301 1,610 12,673 1,125 870 81 6,230 25,243 1,217 83,508 10,440 10,923 6,083 96,891 9,732 2,588 3,569 9,704 2,194 13,088 2,952 3,339 188 10,681 56,348 4,051 249,543 31,934 30,324 15,580 324,928 21,388 7,264 13,760 33,809 5,539 37,457 122,033 1,207 11,245 1,970 -266 28,960 -526 129,236 467 11,450 2,053 812 4,428 13,948 322 120,093 1,370 349,259 21,812 37,707 6,507 494 13,681 42,992 310 380,481 12,904 -550 -65 -2,812 -46,681 -10,825 -44,649 -10,753 -95,851 -40,348 123,647 503,441 497,060 1,578,461 18 1,073 4,249 363 19,371 2,718 3,624 1,139 25,452 2,646 537 1,110 3,533 300 3,115 20,923 406 2,152 595 -393 1,208 3,379 -9 4,117 13,312 332 114,883 143 (On-budget) ................................................. . 98,056 413,727 409,969 1,273,064 (Off-budget) ............................................... .. 25,591 89,714 87,090 305,417 Surplus (+) or deficit (-) .................................. .. +19,274 -36,646 -57,752 -162,640 (On-budget) ................................................. . 12,558 -56,939 -77,607 -225,268 (Off-budget) ............................................... .. +6,716 +20,291 +19,854 +62,428 'These figures are based on the Mid-Session Review of the FY 1996 Budget, released by the Office of Management and Budget on July 31, 1995. Note: Details may not add to totals due to rounding. 5 Table 4. Receipts of the U.S. Government, January 1996 and Other Periods [$ millions] Current Fiscal Vear to Date This Month Classification GrOll Receipts 1 Refunds (Deduct) I Receipts GrOll Receipts I Refunds (Deduct) 1 Receipts Prior Fiscal Vear to Date Groll Receipts I Refunds (Deduct) I Receipts .. Individual Income taxes: Withheld Presidential Election Campaign Fund Other Total-Individual income taxes ........................ . Corporation income taxes ................................... . Social Insurance taxes and contributions: Employment taxes and contributions: Federal old-age and survivors ins. trust fund: Federal Insurance Contributions Act taxes ... . Self-Employment Contributions Act taxes ........... . Deposits by States .. .................. . ............ . ................................ . Other Total-FOASI trust fund ............................ . Federal disability insurance trust fund: Federal Insurance Contributions Act taxes ..... Self-Employment Contributions Act taxes Receipts from railroad retirement account ...... . Deposits by States .................................... . . . . . . . . . . . . . ............ . Other Total-FDI trust fund .................. . Federal hospital insurance trust fund: Federal Insurance Contributions Act taxes Self-Employment Contributions Act taxes Receipts from Railroad Retirement Board DepoSits by States ............. . Total-FHI trust fund ........ . Railroad retirement accounts: Rail industry pension fund ........... . Railroad Social Security equivalent benefit ..... Total-Employment taxes and contributions Unemployment insurance: State taxes deposited in Treasury ...................... . Federal Unemployment Tax Act taxes ......... . Railroad unemployment taxes ....................... . Railroad debt repayment ...................... . Total-Unemployment insurance ........ . 86,511 178,473 2 39,385 192.811 2 42.277 '55.351 1 '31,159 319 86,192 235,090 4,356 230,734 217,861 3,890 213,971 46,226 6,500 39,726 76,284 664 5,158 53,204 6,151 47,053 '26,039 '1,279 26,039 1,279 643 .. .. 91,829 1,457 (' ') ( ) ( ) (' ') 92,473 1,457 -1 27,317 27,317 93,928 643 93,285 76,950 76,950 '4,641 '349 4.641 349 16,443 397 119 16,323 397 29,347 647 29,347 647 6,381 1,223 ( .. .. ( ) -1 ) 76,284 664 1 .. .. ( 1 ) .. ( ( ) n ) 4,990 4,990 16,839 119 16,720 29,994 29,994 '7,495 '560 7,495 560 31,409 660 -13 31,422 660 31,008 431 31,008 431 ) (") 8,054 8,054 32,069 -13 32,082 31,439 31,439 .. ( 249 179 47 202 179 705 624 84 621 624 721 651 7 714 651 40,789 47 40,742 144,166 833 143,333 139,755 7 139,748 792 294 5 10 792 285 5 4,388 1,076 10 17 4,388 1,059 10 4,416 1,207 12 14 4,416 1,193 12 1,090 10 1,081 5,475 17 5,457 5,635 14 5,621 Other retirement contributions: Federal employees retirement - employee contributions ........................................... . Contributions for non-federal employees ........ . 368 6 368 6 1,447 25 1,447 25 1,472 33 1,472 33 Total-Other retirement contributions .......... . 374 374 1,472 1,472 1,505 1,505 Total-Social insurance taxes end contributions ....................................... . 42,254 57 42,197 151,112 851 150,262 146,895 21 146,874 Excise taxes: Miscellaneous excise taxes2 •................••............. Airport and airway trust fund .............................. . Highway trust fund ......................................... . Black lung disability trust fund ............................ . 1,456 502 2,282 41 39 1,417 502 2,282 41 9,471 1,865 7,568 196 279 6 97 9,192 1,859 7,472 196 9,641 1,728 7,873 198 169 9 211 9,472 1,718 7,663 198 Total-Excise taxes ...........................•......... 4,280 39 4,241 19,100 382 1B,718 19,440 389 19,052 Estate and gift taxes .......................••...••........... 1,321 33 U88 5,313 134 5,179 4,644 126 4,519 Customs duties .........................•....•................ 1,574 92 1,462 6,69B 398 6,300 7,401 441 6,960 Miscellaneous Receipts: Deposits of eamings by Federal Reserve banks All other ........................................ . 2,159 207 2,159 206 7,420 1,132 4 7,420 1,128 6,884 1,327 6 6,884 1,321 2,384 Total - Miscellaneous receipts ....................... . 2,365 8,552 4 8,54B 8,212 6 8,205 Total - Receipts ....................................... . 144,686 1,764 142,922 479,070 12,277 466,793 450,679 11,372 439,307 Total - On-budget ..................................... . 112,379 1,764 110,615 38B,302 11,514 356,788 343,735 11,372 332,363 Total - Off-budget ..................................... . 32,307 32,307 110,768 763 110,005 106,944 'In accordance Wlth the SOC1a1 Secunty Act as amended: "IndiVIdual Income Taxes. WIthheld" have been Increased and "Federal Insurance Contribution Act Taxes" correspondingly dea'eased by $1,502 mllhon to correct estimates for the quarter ending December 31. 1995 and "Individual Income Taxes. Other" have been Increased and "Self-Employment Contribution Act Taxes" correspondIngly decreased by $2,584 million to correct estimates for the calendar year 1993 and pnor 'Includes amounts for the windfall profits tax pursuant to PL 96-223, No Transactions. (" .) Less than $500.000. Note: Detalls may not add to totals due to rOUnding. 6 106,944 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods [$ millions] This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross IAPPlicablel Outlays Receipts Outlays Gross IAPPlicablel 0 tI Outlays Receipts u ays Gross IAPPlicablel 0 tl Outlays Receipts u ays Classification Legislative Branch: Senate.............. . .............. . House of Representatives ... . Joint items ................ . Congressional Budget Office ...................... . Architect of the Capitol ..... . Library of Congress ......... . Govemment Printing Office: . ................. . Revolving fund (net) ................. General fund appropriations General Accounting Office .................................. . United States Tax Court ............. . Other Legislative Branch agencies ............... . Proprietary receipts from the public ........................ . Intrabudgetary transactions ................................. . -1 Total-Legislative Branch ............................... . 264 35 54 (" .) .. ( 35 54 ) 8 2 18 33 (") 8 138 231 28 2 18 33 58 111 38 38 7 7 64 2 64 3 3 -1 -1 2 8 7 2 56 111 74 402 14 26 142 10 10 -3 -2 51 27 138 768 1,134 9 8 8 2 894 36 833 31 831 31 2 939 872 870 14 26 142 10 10 3 -2 774 2 2 9 306 12 306 12 896 36 941 145 245 26 138 230 28 ) 8 262 2 146 246 26 ..1 ( 6 7 2 11 10 6 -4 10 72 402 51 27 138 11 10 -6 -4 1,125 The Judiciary: Supreme Court of the United States ...................... . Courts of Appeals. District Courts. and other judicial services .................................................... . Other ........................................................ . Total-The Judiciary ..............•.....•................ 320 Executive Office of the President: Compensation of the President and the White House Office ....................................................... . Office of Management and Budget ........................ . Other ........................................................ , 4 5 8 4 5 8 12 18 30 12 18 30 12 19 51 12 19 51 18 18 60 60 81 81 65 -25 235 194 5 127 894 687 17 151 -24 894 687 17 297 2.237 1.895 24 3 11 11 7 274 -274 -323 338 138 1.736 323 474 314 6 314 6 319 Total-Executive Office of the President Funds Appropriated to the President: International Security Assistance: Foreign military loan program ..... . . ............ . Foreign military financing program ....... Economic support fund ................................... . Peacekeeping Operations ................................. . Other ........ .... . ............................. . Proprietary receipts from the public .. Total-Intemational Security Assistance Intemational Development Assistance: Multilateral Assistance: Contribution to the International Development ASSOCiation .................................... . Intemational organizations and programs ..... . Other ............................................. . Total-Multilateral ASSistance Agency for International Development: Sustainable development assistance program Assistance for eastern europe and the baltic States .. Assistance for the new independent States of the former soviet union ................................... . Development fund for Africa ........................... . Operating expenses .................................... . Payment to the Foreign Service retirement and disability fund .......................................... . Other .. '" .............................................. . Proprietary receipts from the public ................... . Intrabudgetary transactions .................... . 40 235 194 (* *) 5 3 477 320 138 2.237 1.895 24 262 -262 420 4.039 7 1.262 4,459 627 16 212 627 16 212 509 210 201 509 210 201 319 855 855 920 920 199 23 199 23 622 622 88 88 503 110 503 110 31 34 43 31 34 43 154 189 153 154 189 153 212 216 179 212 216 179 45 63 -282 1.347 300 1.047 -59 60 29 16 72 30 77 -61 72 30 1.882 2.385 377 2.008 541 -75 -29 4.913 68 4.371 ( ( 10 103 12 -103 96 18 288 78 -288 Total-Agency for International Development ...... . 352 113 239 1.303 307 996 Overseas Private Investment Corporation ............... . Peace Corps .............................................. . Other ................................................ . 11 6 4 15 7 32 60 29 90 15 7 119 585 2.279 397 343 541 -1 1.062 22 4.913 704 343 Intemational Monetary Programs ................. . Military Sales Programs: Special defense acquisition fund Foreign military sales trust fund Kuwait civil reconstruction trust fund ... . Proprietary receipts from the public ..................... . Other ........................................................ ' 1.062 Total-Funds Appropriated to the President .......... . 2,593 2 3 .. ( .. ( ) ) .. ( -1.060 6 12 1,520 1,073 9,502 7 ..) ) 1.060 6 51 45 82 19 282 22 Total-Intemational Development Assistance 158 -75 67 .. ) 5.390 -5.390 12 9 6,311 3,191 11,217 1 .. 4.371 ( 4.123 ) -4.123 9 4,987 6,230 Table 5. Outlays of the U.S. Govemme(lt, January 1996 and Other Periods-Continued [$ millions] Classification Department of Agriculture: Agricultural Research Service .. ............. Cooperative State Research Education and Extension Service: Cooperative state research activities ExtenSion Service .. . .............. Other .............. ................ Animal and Plant Health Inspection Service ........... Food Safety and Inspection Service ........... ........... Agricultural Marketing Service ............................... Farm Service Agency: Salaries and expenses ................................... Conservation programs .................................... Federal crop insurance corporation fund ................. Commodity Credit Corporation: Price support and related programs .................... National Wool Act Program ............................. Agricultural credit insurance fund ......................... Other ....................................................... Total-Farm Service Agency ........ ................... This Month Current Fiscal Year to Date Prior Fiscal Yaar to Date Gross jAPPlicable j Outlays Outlays Receipts Gross lAPPIiC8bI1 Outla s Outlays Receipts y Gros. jAPPlicable j Outlay. Receipts Outlays 71 71 252 252 248 248 32 38 3 46 53 71 32 38 3 46 53 71 129 131 10 156 177 363 129 131 10 156 177 363 149 142 15 175 172 385 149 142 15 175 172 385 -124 13 273 2 -124 13 271 116 1,766 967 336 116 1,766 631 363 1,783 235 363 1,783 -210 998 876 122 5,714 2,421 3,292 2,226 223 315 -92 ..) 254 619 -365 1 9,542 4 208 1 705 7,316 4 -498 191 8,818 3,376 5,442 12,135 3,376 8,759 67 21 14 208 85 44 208 85 44 197 106 35 ( ('.) 1,383 1,193 445 Natural Resources Conservation Service: Conservation operations ............................ Watershed and flood prevention operations .............. Other .......................................... Rural Utilities Service: Rural electrification and telephone fund ....... Rural development insurance fund ........................ Other ................................................ Rural housing and Community Development Service: Rural housing insurance fund ............................. .......................................... Other Foreign Agricultural Service .............. .................... 358 31 61 462 49 11 -105 -18 50 849 208 260 1,460 194 75 -611 14 185 737 219 149 972 177 66 -234 42 83 242 95 -10 175 68 95 -10 723 347 95 798 -75 347 95 940 388 407 804 135 388 407 Food and Consumer Service: Food stamp program .................... ................. State child nutrition programs ............................. Women, infants and children programs ................... .......................................... Other .. 2,256 707 308 42 2,256 707 308 42 8,631 2,829 1,253 124 8,631 2,829 1,253 124 8,717 2,658 1,220 205 8,717 2,658 1,220 205 ................... 3,314 3,314 12,838 12,838 12,801 12,801 Forest Service: National forest system .................................... Forest and rangeland protection .......................... Forest service permanent appropriations ................. ................................. Other .... 185 24 16 69 185 24 16 69 540 127 328 290 540 127 328 290 463 306 403 275 463 306 403 275 Total-Forest Service ... ................... ............. 293 293 1,285 1,285 1,447 1,447 .................... ............. Other Proprietary receipts from the public ......................... Intrabudgetary transactions .. ................................ 67 161 ('.) -45 147 -336 -45 187 r .) 63 -109 ....................... 6,252 4,249 27,092 6,252 20,839 31,032 5,788 25,243 Department of Commerce: Economic Development Administration ...................... ..................................... Bureau of the Census Promotion of Industry and Commerce ...................... 44 44 30 43 44 30 158 121 100 4 154 121 100 104 153 121 6 98 153 121 Science and Technology: National Oceanic and Atmospheric Administration National Institute of Standards and Technology ......... ......................................... Other 190 41 12 654 176 50 4 9 650 176 41 675 128 56 8 2 188 41 10 11 667 128 45 Total-Science and Technology .................. 242 3 239 880 13 867 859 19 840 18 -11 49 47 43 49 -43 (' .) 11 ('.) 47 -42 (" .) 363 1,307 Total-Food and Consumer Service Total-Department of Agriculture 67 21 14 2,002 18 ............ Other Propnetary receipts from the public ....... Intrabudgetary transactions ................. Offsetting govemmental receipts ............................ ('.) ....................... 378 Total-Department of Commerce 4 109 15 8 13 336 13 381 ) .. ) r .) 1,248 1,284 ( 60 .. ( 197 106 35 175 -381 .. ( 42 ) .. ( 67 ) 1,217 Table 5, Outlays of the U,S, Government, January 1996 and Other Periods-Continued [$ millions] This Month Current Fiscal Year to Data Prior Fiscal Year to Date Gross IAPPlicablel 0 tl Outlays Receipts u ays Groll IApPIIC8blel 0 tI Outlays Receipts u ays Gross IAPPlic.able I Outla s Outlays Receipts y Classification Department of Defense-Military: Military personnel: Department of the Army ........................... Department of the Navy ........................ Department of the Air Force .............................. 1,058 1,464 803 1,058 1,464 803 7,238 7,504 5,551 7,238 7,504 5,551 7,376 8,047 5,675 7,376 8,047 5,675 ................................ 3,325 3,325 20,294 20,294 21,098 21,098 Operation and maintenance: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies .......................................... 1,708 2,084 1,986 1,944 1,708 2,084 1,986 1,944 6,616 6,859 7,650 6,540 6,616 6,859 7,650 6,540 7,077 7,786 8,004 6,268 7,077 7,786 8,004 6,268 ....... ........... 7,723 7,723 27,665 27,665 29,135 29,135 Procurement: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies ................................. 547 1,523 2,190 320 547 1,523 2,190 320 2,215 6,318 5,617 1,219 2,215 6,318 5,617 1,219 2,524 7,748 7,284 1,381 2,524 7,748 7,284 1,381 4,579 4,579 15,370 15,370 18,937 18,937 Research, development, test, and evaluation: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies .......................................... 471 642 1,139 733 471 642 t,139 733 1,705 2,663 4,103 2,753 1,705 2,663 4,103 2,753 1,560 3,132 4,252 2,500 1,560 3,132 4,252 2,500 Total-Research, development, test and evaluation 2,985 2,985 11,225 11,225 11,444 11,444 Military construction: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies .......................................... 51 99 391 1 51 99 391 270 223 429 1,401 270 223 429 1,401 255 251 450 1,017 255 251 450 1,017 ............................. 543 543 2,323 2,323 1,973 1,973 136 107 87 13 136 107 87 6 426 432 342 48 426 432 342 26 371 318 349 49 371 318 349 32 -37 156 47 375 47 375 -67 37 -258 -7 2,076 -39 2,076 -41 87 -34 (. ') (") (' .) (") (' .) (") 7 9 3 6 (. ') (") (") (") 78 40 Total-Military personnel Total-Operation and maintenance Total-Procurement ............................ Total-Military construction Family housing: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies .......................................... Revolving and management funds: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies: Defense business operations fund ..................... Other ..................................................... Trust funds: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies .......................................... Proprietary receipts from the public: Department of the Army .................................. Department of the Navy .................................. Department of the Air Force .............................. Defense agencies .......................................... Intrabudgetary transactions: Department of the Army .................................. Department of the Navy ................................. Department of the Air Force .............................. Defense agencies .......................................... Offsetting governmental receipts: Department of the Army .................................. Defense agencies .......................................... Total-Department of Defense-Military ............. 7 -37 156 -258 -6 (") (. ') 1 114 114 -40 19 -75 -3 19,281 (") (") -90 19,371 9 2 9 3 146 61 187 -4 40 -19 75 3 17 21 -10 -217 17 21 -10 -217 17 3 78 22 38 698 118 -217 38 698 118 -217 81,320 -146 -61 -187 4 2 -2 (") (") 429 80,891 18 -67 37 2 (") 40 247 125 240 126 68 418 88 -51 84,270 87 -36 -247 -125 -240 -126 68 418 88 -51 (") (") 761 83,508 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] Classification Department 01 Defense-Civil Corps 01 Engineers Construction. general Operation and maintenance. general Other Proprietary receipts from the public This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross jAPPlicablej Outlays Outlays Receipts Gross jAPPlicablej Outla s Outlays Receipts y Gross jAPPlicablej Outlays Receipts Outlay. Total-Corps of Engineers 351 Military retirement: Payment to military retirement fund ...................... Military retirement fund . ... . . ... . . . .. . . . .. . . .. Intrabudgetary transactions ............ Education benefits Other ............. Proprietary receipts from the public Total-Department of Defense-Civil 376 370 610 17 80 -32 302 -17 17 334 1.356 80 -32 302 ................... 2,376 5 7 2,376 ( 2,738 10,699 9,365 -10,699 -5 25 3 5 6 -3 20 2,718 10,740 ..) 373 560 457 54 376 370 610 -54 54 1.301 1.390 1 6 10,699 9,365 -10,699 -5 23 -6 11,470 9.062 -11,470 14 25 62 10,678 10,490 44 373 560 457 -44 44 1.346 1 5 11,470 9,062 -11,470 14 23 -5 50 10,440 Department of Education: Office of Elementary and Secondary Education: Education for the disadvantaged Impact aid ........... School improvement programs Other 605 19 145 36 605 19 145 36 2,303 92 418 96 2,303 92 418 96 2,288 578 493 34 2.288 578 493 34 Total-Office of Elementary and Secondary Education 805 805 2,910 2.910 3,394 3,394 21 21 48 48 65 65 372 319 16 167 372 319 16 167 1,069 867 39 562 1,069 867 39 562 1,138 749 48 540 1,138 749 48 540 -2 1,115 168 21 75 480 -1 24 -24 2.708 330 59 264 821 -2 9 2,757 307 64 122 1,480 -3 33 2,708 330 59 264 821 -2 -24 2.757 307 64 122 1,480 -3 1,857 4,180 24 4,156 4,737 33 4,704 42 26 124 136 145 155 3 124 136 -3 16 145 155 -16 27 9,907 10,971 49 10,923 Office of Bilingual Education and Minority Languages Affairs ........... Office of Special Education and Rehabilitative Services: Special education Rehabilitation services and disability research Special institutions for persons with disabilities Office of Vocational and Adult Education Office of Postsecondary Education: College housing loans Student financial assistance Higher education Howard University Federal direct student loan program Federal family education loans Other Total-Office of Postsecondary Education Office of Educational Research and Improvement Departmental management Propnetary receipts from the public Total-Department of Education ........................ Department of Energy: Atomic energy defense activities Energy programs: General science and research activities Energy supply, Rand D activities Uranium supply and enrichment activities Fossil energy research and development Energy conservation Strategic petroleum reserve Clean coal technology Nuclear waste disposal fund Other 1.859 42 26 Power Marketing Administration Departmental administration Propnetary receipts from the public Intrabudgetary transactions Offsetting govemmental receipts ............................ 2 ..) ( 3,627 .. ( ) 3,624 9,934 842 842 4,174 4.174 4,071 4,071 69 210 9 37 57 20 69 210 9 37 57 20 348 1,099 36 168 216 77 348 1,099 36 168 216 77 581 1,131 31 145 191 78 581 1,131 31 145 191 78 18 79 83 277 ( ..) 83 276 111 351 111 351 498 2,304 ( ) 2,303 2,620 2,619 492 122 586 3 -94 122 -656 -330 -3 627 154 3 -66 33 -216 51 -3 409 1,139 1,247 5,515 18 79 498 Total-Energy programs Total-Department of Energy 2 1,115 168 21 75 480 -1 123 33 2 ..) (.. ) ( 189 216 51 1,548 10 .. 656 -330 6,762 8 13 154 -606 -159 -8 1,229 8,083 614 606 -159 7,312 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] Classification Department of Health and Human Services: Public Health Service: Food and Drug Administration ........................... . Health Resources and Services Administration .......... . Indian Health Services .................................... . Centers for Disease Control and Prevention ............ . National Institutes of Health .............................. . Substance Abuse and Mental Health Services Administration ............................................ . Agency for Health Care Policy and Research ........... . Assistant secretary for health ............................ . This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross !APPlicable! Outlays Outlays Receipts GrOlliAPPIlcabii Outlays Receipts Outlays Groll IAPPlicable I Outla s Outlays Receipts y 49 .. ( ) 49 298 198 168 746 298 198 168 746 246 839 671 614 3,409 245 839 671 614 3,409 264 773 793 596 3,372 119 9 46 119 9 46 668 41 221 668 41 221 775 41 162 1,632 6,709 6,708 6,777 2 262 773 793 596 3,372 775 41 162 Total-Public Health Service ........................... . 1,632 Health Care Financing Administration: Grants to States for Medicaid ........................... . Payments to health care trust funds .................... . 6,730 6,282 6,730 6,282 28,754 17,442 28,754 17,442 28,703 14,109 28,703 14,109 Federal hospital insurance trust fund: Benefit payments ....................................... . Administrative expenses ................................ . Interest on normalized tax transfers .................. . 9,971 198 9,971 198 38,987 436 38,987 436 34,772 390 34,772 390 Total-FHI trust fund ................................ . 10,169 10,169 39,423 39,423 35,162 35,162 Federal supplementary medical insurance trust fund: Benefit payments ....................................... . Administrative expenses ................................ . 5,498 261 5,498 261 22,508 563 22,508 563 20,365 575 20,365 575 Total-FSMI trust fund .............................. . 5,758 5,758 23,070 23,070 20,940 20,940 Other ...................................................... . -121 -121 23 23 3 3 Total-Health Care Financing Administration .......... . 28,819 28,819 108,712 108,712 98,917 98,917 1,691 145 37 1,691 145 37 6,183 360 113 6,183 360 113 6,100 536 154 6,100 536 154 Administration for children and families: Family support payments to States ..................... . Low income home energy assistance ................... . Refugee and entrant assistance ......................... . Payments to States for the job opportunities and baSic skills training program ................................... . State legalization impact assistance grants ............. . Payments to States for the child care and development block grant .............................................. . Social services block grant ............................... . Children and families services programs ................ . Payments to States for foster care and adoption aSSistance ................................................ . Other ...................................................... . Total-Administration for children and families Administration on aging ..................................... . Departmental management ................................. . Proprietary receipts from the public ........................ . Intrabudgetary transactions: Payments for health insurance for the aged: Federal hospital insurance trust fund ............. . Federal supplementary medical insurance trust fund .. Payments for tax and other credits: Federal hospital insurance trust fund ................. . Other .................................................... . Total-Department of Health and Human Services (* *) 2 6,775 73 73 288 288 (* *) (**) -2 -2 300 141 300 141 103 198 464 103 198 464 365 797 1,689 365 797 1,689 298 989 1,637 298 989 1,637 300 41 300 41 1,195 68 1,195 68 1,049 4 1,049 4 3,051 3,051 11,057 11,057 11,210 11,210 61 25 61 25 -1,853 233 105 233 105 -6,906 313 135 313 135 -6,350 -5,128 -5,128 -16,299 -16,299 -12,979 -12,979 -1,154 -1,154 -1,143 -1,143 -1,130 -1,130 25.452 109.373 102.486 103.244 1,853 27.305 1.853 11 6,906 6.907 6,350 6.352 96.891 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions) This Month Current Fiscal Vear to Date Prior Fiscal Vear to Date Groll !Applicable! Outlays Outlays Receipts Groll !APPlicable! Outla s Outlays Receipts y Groll !APplicable! Outlays Receipts Outlays Clallifieation Department of Housing and Urban Development Housing programs: PubliC enterprise funds Credit accounts: Federal housing administration fund Housing for the elderly or handicapped fund ... Other. ........... ........... Rent supplement payments ............ Homeownership assistance .............. Rental housing aSSistance Rental housing development grants Low-rent public housing ................ Public housing grants ............ College housing grants Lower income housing aSSistance ............... Section 8 contract renewals ................... Other ........... . .................. Total-Housing programs ............ Public and Indian Housing programs: Low-rent public housing-Loans and other expenses ... Payments for operation of low-income housing ............. ............. projects Community Partnerships Against Crime ...... Other .............. ................. Total-Public and Indian Housing programs Government National Mortgage ASSOCiation: Management and liquidating functions fund Guarantees of mortgage-backed securities 7 5 2 47 28 19 54 38 15 222 -17 52 6 9 55 218 56 4 -74 52 6 9 55 2.872 236 208 19 36 214 3.810 181 -939 55 208 19 36 214 3.305 306 188 44 39 214 3.381 223 -76 83 188 44 39 214 ) (") 28 333 1 846 510 33 335 1,363 6 2.585 1,499 108 335 1,363 6 2,585 1,499 108 346 1,230 7 3,283 1.529 52 346 1,230 7 3,283 1,529 52 280 1,804 9,528 4,019 5.509 10,597 3.643 6,955 .. 6 236 186 50 245 197 48 246 22 6 922 922 77 77 26 26 863 53 4 280 1.261 186 1,075 1,165 197 .. ( 28 333 1 846 510 33 2,083 6 246 22 6 280 ( ) .. .. ( ( ) .. (" .) 863 53 4 .. n ) (" .) (" .) ( 33 85 -51 82 265 -183 135 273 -139 Total-Government National Mortgage Association 33 85 -52 82 266 -184 135 274 -139 Community Planning and Development: . ................ Community Development Grants .... Home investment partnerships program ........... ........................ Other 396 90 28 8 396 90 20 1.611 388 116 35 1.611 388 81 1,413 404 104 41 1,413 404 63 Total-Community Planning and Development .. 514 8 507 2.116 35 2.081 1.921 41 1.880 338 18 52 338 18 -52 183 17 8 110 6 -8 131 183 17 -131 380 2,846 13,343 4,558 8,785 14,018 4,288 9,732 50 15 84 218 206 218 64 206 230 201 245 230 201 245 ............... ............. Management and Administration ............ Other Proprietary receipts from the public ....... ............ Offsetting governmental receipts Total-Department of Housing and Urban Development ............................................. Department of the Interior: Land and minerals management: Bureau of Land Management: Management of lands and resources .............. ............. Other .................. Minerals Management Service Office of Surface Mining Reclamation and .............. Enforcement Total-Land and minerals management Water and science: Bureau of Reclamation: ................. ........... Construction program Operation and maintenance Other Central utah project United States Geological Survey ............ Bureau of Mines Total-Water and science Fish and wildlife and parks: United States Fish and Wildlife Service National Biological Survey NatIOnal Park Service Total-Fish and wildlife and parks 110 6 3,027 50 15 84 64 ) 968 ( ) 25 25 139 139 114 114 174 174 627 627 790 790 21 19 23 20 46 15 85 74 113 21 155 53 104 126 24 168 55 73 8 85 74 69 21 155 44 104 2 21 19 10 20 46 13 7 53 24 168 48 15 128 500 52 448 554 80 474 95 8 123 95 8 123 389 26 450 389 26 450 383 34 496 383 226 226 865 865 913 913 143 13 12 44 77 77 34 496 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross !APPlicable! Outlays Outlays Receipts Gross !APPlicabl1 0 tl Outlays Receipts u ays Gross !APPlicable! Outla s Outlays Receipts y Classification Department of the Interior:-Continued Bureau of Indian Affairs: Operation of Indian programs Indian tribal funds Other ................................................... . Total-Bureau of Indian Affairs ......... . Territorial and international affairs ............ . Departmental offices ........................................ . Proprietary receipts from the public ........................ . Intrabudgetary transactions ................ . Offsetting governmental receipts ................... . Total-Department of the Interior 163 21 49 163 21 48 455 96 122 233 232 673 32 32 8 8 160 38 225 -38 .. Department of Justice: Legal activities .............................................. . Federal Bureau of Investigation ............................ . Drug Enforcement Administration ........................... . Immigration and Naturalization Service ..................... . Federal Prison System ...................... . .............. . Office of Justice Programs ................................. . Other ........................................................ . Intrabudgetary transactions ................................. . Offsetting governmental receipts ........................... . 233 170 97 228 299 76 105 -9 Total-Department of Justice .•...••....••...•.•.•.....• 1,199 -89 (. 0) 241 537 2,774 233 170 97 228 287 76 105 -9 810 683 281 662 1.060 295 245 -17 12 563 62 162 4 563 62 158 5 668 787 4 784 160 38 -561 -89 281 561 ) ( 778 -225 -38 5 455 96 117 -103 618 2,156 3,300 45 833 648 323 564 925 322 208 -16 236 810 683 281 662 1.015 295 245 -17 -236 281 3,740 3,808 ) ( 77 628 .. .. ( 281 77 .. ( ) ) 712 -628 -103 .. ( ) 2,588 833 648 323 564 43 196 882 322 208 -16 -196 239 3,569 77 -77 89 1,110 4,021 315 54 20 315 54 20 1.326 146 94 1.326 146 94 1.427 126 89 1.427 126 89 -29 -29 15 15 6 6 2.515 301 40 2.515 301 40 7.421 1.101 58 7.421 1.101 58 5 5 44 44 6.811 1.092 59 61 6.811 1.092 59 61 8 2 8 2 25 25 20 20 7 7 6 6 Total-Unemployment trust fund .................... . 2.872 2.872 8.655 8.655 8.049 8.049 Other ...................................................... . 8 8 26 26 27 27 3.240 3.240 10.263 10.263 9.724 9.724 -8 324 238 296 23 140 23 140 77 44 10 29 15 46 10 29 15 46 71 339 177 50 91 65 154 77 44 71 339 177 50 91 65 154 -622 189 50 95 94 130 -622 189 50 95 94 130 -5 -145 -145 -164 -164 3,533 11,388 11,301 9,869 Department of Labor: Employment and Training Administration: Training and employment services ....................... . Community Service Employment for Older Americans .. . Federal unemployment benefits and allowances ........ . State unemployment insurance and employment service operations ................................................ . Payments to the unemployment trust fund ............. . Advances to the unemployment trust fund and other funds ..................................................... . Unemployment trust fund: Federal-State unemployment insurance: State unemployment benefits ........................ . State administrative expenses ....................... . Federal administrative expenses ................ . Veterans employment and training .................. . Repayment of advances from the general fund .... . Railroad unemployment insurance ..................... . Other .................................................... . Total-Employment and Training Administration .. Pension Benefit Guaranty Corporation ............... . Employment Standards Administration: Salaries and expenses ................................... . Special benefits .................................. . Black lung disability trust fund ........................... . Other ...................................................... . Occupational Safety and Health Administration ............ . Bureau of Labor Statistics ................................. . Other ........................................................ . Proprietary receipts from the public ........................ . Intrabudgetary transactions ................................. . Total-Department of Labor ......•...................... 77 85 86 -1 -1 -5 3,618 86 13 164 87 132 -1 165 9,704 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] Current Fiscal Vear to Oate This Month Classification Gross Outlays Oepartment of State: Administration of Foreign Affairs: Diplomatic and consular programs AcquIsition and maintenance of buildings abroad Payment to Foreign Service retirement and disability fund Foreign Service retirement and disability fund Other IApplicable I Outlays Receipts Gross Outlays IApplicable I Outlays Receipts Prior Fiscal Vear to Oate Groll Outlays J I ApPIIC8ble Receipts Outla ys 140 50 140 50 566 195 566 195 420 151 420 151 30 38 23 30 38 23 56 150 117 56 150 117 129 149 118 129 149 118 281 281 1,084 1,084 967 967 12 25 16 12 25 16 327 194 75 327 194 75 1,107 252 49 1,107 252 49 -35 -35 -70 -70 -182 -182 300 300 1,610 1,610 2,194 2,194 1,298 17 17 1,298 17 17 6,251 60 89 6,251 60 89 6,100 63 62 6,100 63 62 1,332 1,332 6,400 6,400 6,226 6,226 National Highway TraffiC Safety Administration 25 25 101 101 92 92 Federal Railroad Administration: Grants to National Railroad Passenger Corporation Other 81 23 81 22 389 83 3 389 80 492 71 4 492 67 104 103 472 3 469 562 4 559 -70 181 305 -70 181 305 374 722 370 374 722 370 120 647 745 120 647 745 416 416 1,466 1,466 1,512 1,512 -219 -219 816 816 672 672 135 201 24 741 135 201 24 741 562 730 75 741 562 730 75 741 686 860 71 912 686 860 71 912 1,101 1,101 2,108 2,108 2,529 Total-Administration of Foreign Affairs International organizations and Conferences Migration and refugee assistance Other Proprietary receipts from the public .................. Intrabudgetary transactions ............ Offsetting governmental receipts Total-Department of State .............................. Department of Transportation: Federal Highway Administration: Highway trust fund: Federal-aid highways ............ Other Other programs Total-Federal Highway Administration Total-Federal Railroad Administration Federal Transit Administration: Formula grants Discretionary grants Other Total-Federal Transit Administration Federal Aviation Administration: Operations Airport and airway trust fund: Grants-in-aid for airports Facilities and equipment Research, engineering and development Operations Total-Airport and airway trust fund .. ) rO) ( ..) -1 ..) 882 2,924 2,924 3,201 162 37 44 36 162 37 35 773 128 176 51 2 773 128 176 49 278 278 1,128 2 173 92 47 2 2 6 36 51 -1 -1 -6 17 3,115 12,755 (00) ( Total-Federal Aviation Administration 882 ( Coast Guard: Operating expenses AcqUisition, construction, and improvements Retired pay Other Other Total-Coast Guard 44 52 Maritime Administration Other Proprietary receipts from the public Intrabudgetary transactions Offsetting governmental receipts Total-Department of Transportation 44 8 -1 ................... 3,132 14 ..) 2,529 .. ..) (..) 3,201 798 114 173 99 2 798 114 173 97 1,126 1,185 2 1,183 221 161 44 177 160 -1 25 126 90 -2 -1 -25 22 -22 82 12,673 13,161 74 13,088 -1 ( ( ( ) Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross IAPPlicablel Outlays Receipts Outlays Gross IAPPlicablel 0 tl Receipts u ays Outlays Gross IAPPlic.ablel Outla s Outlays Receipts y Classification Department of the Treasury: Departmental offices: Exchange stabilization fund ............ Other Financial Management Service: .............. Salaries and expenses Payment to the Resolution Funding Corporation Claims. judgements. and relief acts Net interest paid to loan guarantee financing accounts ........... . .......... Other Total-Financial Management Service Federal Financing Bank Bureau of Alcohol. Tobacco and Firearms: Salaries and expenses Internal revenue collections for Puerto Rico .... United States Custorns Service ................... Bureau of Engraving and Printing ....... .................. United States Mint Bureau of the Public Debt ................ .................. Internal Revenue Service: Processing. assistance. and management ................ Tax law enforcement Information systems ................... Payment where earned income credit exceeds liability for tax .......................................... Health insurance supplement to earned income credit .. Refunding internal revenue collections. interest ............... Other ...... ........... Total-Internal Revenue Service ..... United States Secret Service Comptroller of the Currency ... Office of Thrift Supervison .............. Interest on the public debt: Public issues (accrual basis) Special issues (cash basis) Total-Interest on the public debt Other .............. ............ Proprietary receipts from the public .' Receipts from off-budget federal entities Intrabudgetary transactions ........... Offsetting governmental receipts ..... .................. Total-Department of the Treasury ..................... -220 58 11 -231 58 -544 167 32 577 95 -4 12 32 577 95 -4 12 712 -576 167 -658 57 83 1.164 200 32 41 83 1.164 200 32 41 80 1.164 231 162 33 80 1.164 231 162 33 712 1.520 1.520 1.671 1.671 -113 -113 223 223 223 223 41 22 211 34 49 19 41 22 211 34 -77 19 90 82 624 36 126 92 90 82 624 36 -217 92 134 77 597 24 -50 95 134 77 597 24 -50 95 168 479 138 168 479 138 445 1.366 449 445 1.366 449 563 1,400 504 563 1.400 504 177 177 380 380 251 251 182 182 (") (") 757 -1 757 -1 895 1 895 1 1.145 1.145 3.396 3.396 3.614 3.614 66 -35 -55 188 129 64 188 46 -7 197 153 59 20.547 376 20.547 376 81.379 47.857 81.379 47.857 75.804 46.229 75.804 46.229 20.923 20.923 129.236 129.236 122.033 122.033 5 -606 25 1.579 25 -1.579 16 606 -713 -77 -3.267 376 -3.267 -376 -3.160 77 963 21,328 132,187 2,484 129,703 125,082 66 42 12 126 77 67 5 -713 22,292 15 32 343 82 71 6 102 73 -665 57 197 51 -15 1.344 16 -1.344 317 -3.160 -317 1,843 123,239 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] Classification Department of Veterans Affairs: Veterans Health Administration: Medical care Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Veterans Benefits Administration: PubliC enterprise funds: Guaranty and indemnity fund .............. Loan guaranty revolving fund Other. Compensation and pensions ............... Readjustment benefits .............................. Post-Vietnam era veterans education account ........... Insurance funds: National service life .............. United States govemment life .............. Veterans speCial life ............... Other This Month Current Fiscal Year to Date Prior Fiscal Year to Date Groll /APPlicable/ Outlays Outlays Receipts Gross /APPIic.able/ Outla s y Outlays Receipts Groll /APPlicable/ 0 tI Outlays Receipts u ay. 1,667 62 95 77 16 83 72 ....................... .............. Construction Departmental administration Proprietary receipts from the public: National service life ........... ................ ............. United States government life .................. ........... . .......... Other Intrabudgetary transactions .... 66 102 ................. 2,368 Total-Department of Veterans Affairs Environmental Protection Agency: . ................ Program and research operations ... .................. Abatement. control, and compliance ................... Water infrastructure financing ...... Hazardous substance superfund ......... ................... ................. ........... Other Proprietary receipts from the public ........ ................. Intrabudgetary transactions ................ Offsetting governmental receipts ............................ -385 Total-Office of Personnel Management ............... 400 292 47 4,583 408 13 103 1 15 5 358 5 46 351 6.151 66 102 228 373 216 ..) ( 207 116 46 83 r .) -20 453 r .) ) -4 2,152 12,274 4 193 240 134 64 -39 43 591 857 443 206 r .) ) 5,309 148 5,350 239 193 176 1 4.583 408 13 236 162 75 4,467 405 21 358 5 -38 .. ) 381 6 45 13 5.698 5.811 228 373 205 494 ( 73 .. -60 .. ( 68 r .) -4 11,450 12,094 312 475 687 446 404 85 43 591 857 443 206 -85 3 -3 88 2,053 2,073 -348 -110 192 14 648 -37 216 -14 14 812 -266 624 .. ) 169 131 48 83 431 r .) 5.350 144 66 32 27 4,467 405 21 381 6 -38 13 5.380 205 494 ..93 -93 230 -230 -4 849 11,245 .. 2 312 475 687 446 403 -101 -250 -2 104 1,970 ( -230 -4 230 ( -73 95 ) ( ) 101 -250 ................ Office of Personnel Management: Govemment payment for annuitants. employees health and life insurance benefits Payment to civil service retirement and disability fund .............. Civil service retirement and disability fund Employees life insurance fund Employees and retired employees health benefits fund Other Intrabudgetary transactions: Civil service retirement and disability fund: General fund contributions Other 17 46 8 83 72 -1 -486 24 77 Total-National Aeronautics and Space Administration ............................................ 5,309 216 ( 39 General Services Administration: ...................... Real property activities ............ Personal property activities ........... Other Proprietary receipts from the public ........... .............. National Aeronautics and Space Administration: ............... Human space flight Science. aeronautics and technology ... Mission support .............. Research and development Space flight. control and data communications .. ........... Construction of facilities Research and program management ... ............ Other 60 r .) 635 Total-General Services Administration 119 20 ............... Total-Environmental Protection Agency 3 r .) 4 193 240 134 64 1,667 46 78 31 8 103 1 18 5 471 Total-Veterans Benefits Administration 16 .. ( ) 40 595 2,140 648 -37 216 8 -486 24 77 -8 8 -393 827 429 453 223 68 8 25 429 453 223 68 8 25 (".) ( ) ( ( .. .. ) ) 1,762 1.444 715 275 133 93 3 3 1,762 1,444 715 275 133 93 3 3 396 530 546 1.514 942 103 80 5 396 530 546 1,514 942 103 80 5 1,208 1,208 4,428 4,428 4,117 4,117 375 375 1.100 1,100 1,199 1.199 175 1,306 3.216 -175 -54 19 12.996 541 5.176 6 12.996 -309 164 6 12.573 541 5.098 34 -2 -9 -9 -11 1,481 3,379 19,811 13,948 19,435 .. .. 3.216 ( ) 1,252 19 -2 4,860 16 851 5.012 5,863 .. ( -348 -110 192 ) (".) (* *) -266 857 5.265 12.573 -316 -168 34 -11 6,123 13,312 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] Classification Small Business Administration: Public enterprise fundS: Business loan fund ....................................... . Disaster loan fund ........................................ . Other ...................................................... . Other ........................................................ . This Month Current Fiscal Year to Date Gross IAPPlicablel Outlays Receipts Outlays Gross IApplicable I Receipts Outlays Outlays -11 21 38 31 -49 -10 (' ') 1 -1 51 62 Total-Small Business Administration 70 51 237 179 4 162 ( -9 562 134 121 Prior Fiscal Year to Date Gross IAPPlicable Outlays Receipts 112 89 I Outl ays ..5 ) 104 58 -2 161 136 218 8 177 ( ..5 ) 24 129 3 177 260 322 538 206 332 2,660 226 6,935 2 2,236 246 6,519 2,236 246 6,519 98,395 622 94,416 567 94,416 567 Social Security Administration: Payments to Social Security trust funds .................. . Special benefits for disabled coal miners .................. . Supplemental security income program .................... . Office of the Inspector General ............................ . 1,681 56 343 1,681 56 343 1 1 2,660 226 6,935 2 Federal old-age and survivors insurance trust fund (offbudget): Benefit payments ......................................... . Administrative expenses .................................. . Payment to railroad retirement account ................. . Quinquennial military service credit adjustment .......... . 25,019 106 25,019 106 98,395 622 129 129 Total-FOASI trust fund ............................... . 25,126 25,126 99,146 99,146 94,983 94,983 3,452 129 3,452 129 13,791 351 13,791 351 12,949 350 12,949 350 203 203 14,345 14,345 13,298 13,298 Federal disability insurance trust fund (off-budget): Benefit payments ......................................... . Administrative expenses .................................. . Payment to railroad retirement account ................. . Quinquennial military service credit adjustment .......... . Total-FDI trust fund .................................. . Proprietary receipts from the public: On-budget ............................................... . Off-budget ................................................ . Intrabudgetary transactions: On-budget: Quinquennial Adjustment for Military Service Credits from FOASI and FDI: ....................... . Off-budget1 .•....................••..••...•••••••••.••••.••• Total-Social Security Administration Other independent agencies: Board for Intemational Broadcasting ....................... . Corporation for National and Community Service ......... . Corporation for Public Broadcasting ....................... . District of Columbia: Federal payment .......................................... . Other ...................................................... . Equal Employment Opportunity Commission ............... . Export-Import Bank of the United States .................. . Federal Communi£ations Commission ...................... . Federal Deposit Insurance Corporation: Bank insurance fund ..................................... . Savings association insurance fund ...................... . FSLlC resolution fund: Resolution Trust Corporation closeout ................ . Other .................................................... . Affordable housing and bank enterprise ................. . Total-Federal Deposit Insurance Corporation Federal Emergency Management Agency: Public enterprise funds ................................... . Disaster relief ............................................. . Emergency management planning and assistance ...... . Other ...................................................... . Federal Trade Commission ................................. . Interstate Commerce Commission .......................... . legal Services Corporation ................................. . National Archives and Records Administration ............. . National Credit Union Administration: Credit union share insurance fund ....................... . Central liquidity facility .................................... . Other ..................................................... . 3,581 3,581 .. 146 ( ) -1,681 29,106 146 .. -146 229 -229 ( (' ') (' ') ) -1,681 -332 -2,660 28,960 120,323 230 165 .. -332 -2,660 -2,234 120,093 115,049 .. .. ) ('*) ('*) ( 44 44 135 275 135 275 78 3 27 (' *) 10 225 17 ( .. ) 78 3 27 -215 17 457 3 71 145 168 12 (' ') 547 7 457 -10 71 -403 161 107 122 218 357 -110 -235 379 126 1,148 498 -769 -372 969 102 899 59 -797 -37 357 759 4,135 374 -3,777 386 ( 18 114,883 67 151 286 714 77 703 51 ) ( -2,234 166 67 151 286 4 .. -165 714 12 -8 ) 353 77 350 20 32 2,994 124 -2,025 -106 7,116 489 -5,048 226 2 .. ( ) 1 1 2,068 716 2 -1,180 1,623 6,154 -4,532 3,773 10,723 -6,950 53 98 103 103 924 90 23 10 65 31 8 5 96 24 3 3 67 158 ) 67 26 8 94 182 645 78 57 31 8 205 924 18 280 645 78 -9 -15 -22 5 10 .. 21 ( ) ) ( 353 1,532 76 168 23 168 18 31 10 26 -25 .. ( ) 8 .. ( 2 3 17 55 (* ') 94 55 66 17 49 12 2 10 90 102 24 15 69 .. ) 15 158 68 6 -28 5 ( ( 1 .. ) 8 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions) This Month Classification IApplicable i Receipts Gross Outlays Other independent agencies:-Continued NatIonal Endowment for the Arts NallOnal Endowment for the Humanities ............... NatIonal Labor RelatIons Board .............. NatIonal SCIence FoundatIon Nuclear Regulatory Commission Panama Canal Commission . . ... . . . .. . . ... . . . . Postal Service: PubliC enterprise funds (off-budget) Payment to the Postal Service fund Railroad Retirement Board: Federal windfall subsidy ............ . . . . . . . . . . . Federal payments to the railroad retirement accounts .. Rail industry pension fund: Benefit payments Advances from FOASDI fund .............. OASDI certifications Administrative expenses ................. Interest on refunds of taxes .. . . . . . . . . . . . . . . . . . . . . . Other ............. Intrabudgetary transactions: Payments from other funds to the railroad retirement trust funds . . . . . . . . . . . . . ............ Other ...................... Supplemental annuity pension fund: Benefit payments ............... Interest on refund of taxes .................. Railroad Social Security equivalent benefit account: . ................. Benefit payments ............ Interest on refund of taxes ............. .............. Other Total-Railroad Retirement Board ................. ........... Oversight Board .............. Securities and Exchange Commission Smithsonian Institution Tennessee Valley Authority United States Information Agency Other Total-Other independent agencies Undistributed offsetting receipts: Other interest .................... Total-Employer share. employee retirement Prior Fiscal Year to Date Gross iAppilcabiei Out! s Outlays Receipts ay Gross iAPPnC8blei Outl Receipts ays Outlays 41 53 55 935 -38 -15 62 54 63 815 181 185 -1,542 79 17,243 84 80 102 80 102 86 109 86 109 936 -368 369 23 22 2 936 -368 369 23 22 2 915 -364 364 24 16 2 915 -364 364 24 16 2 -61 -102 -102 -109 -109 7 7 29 29 31 1 31 419 10 419 10 1,641 18 1,641 18 1,634 ..) 1,634 ( ( ( ( 1 1 16 22 21 260 -32 -8 41 53 55 935 163 202 -883 21 18,049 79 19 61 19 61 235 -94 94 7 13 235 -94 -61 16 22 21 260 51 49 4,266 21 .. 83 57 25,149 94 7 13 ..) ) 711 .. ( 711 .. ( ) ) 19 45 784 101 177 678 236 19 45 106 101 -58 7,456 7,982 -526 .. ( ........... Employer share, employee retirement: Legislative Branch: United States Tax Court: Tax court judges survivors annuity fund The Judiciary: Judicial survivors annuity fund .. Department of Defense--Civil: Military retirement fund Department of Health and Human Services: Federal hospital insurance trust fund: Federal employer contributions Postal Service employer contributions Payments for military service credits Department of State: Foreign Service retirement and disability fund Office of Personnel Management: Civil service retirement and disability fund .... SOCIal Security administration (off-budget): Federal old-age and survivors insurance trust fund: Federal employer contributions Payments for military service credits Federal dIsability insurance trust fund: Federal employer contributions Payments for military servIce credits Independent agencIes: Court of veterans appeals retirement fund Outlays Current Fiscal Year to Date ) 201 217 19,591 188 199 62 54 63 815 7 -14 18,331 -1,088 84 .. ) 2,752 2,752 2,709 2,709 557 13 131 3,276 393 770 693 557 13 131 511 393 77 -4 48 132 3,110 351 809 811 -4 48 132 765 351 -2 31,683 30,313 1,370 33,246 33,103 143 2,765 .. ..) ( ( ) .. ( 2,345 .. ( ) ..) ) ( .. ( ) .. ) ('") ( -920 -920 -3,669 -3,669 -4,057 -4,057 -148 -49 -148 -49 -663 -148 -663 -148 -619 -181 -619 -181 -9 -9 -35 -35 -34 -34 -831 -831 -3,347 -3,347 -3,175 -3,175 -453 -453 -1,663 -1,663 -1,622 17 -1,622 17 -81 -81 -297 -297 -290 -17 -290 -17 -2,491 -2,491 -9,822 -9,980 -9,980 .. ( 18 ) .. ( ) -9,822 Table 5. Outlays of the U.S. Government, January 1996 and Other Periods-Continued [$ millions] This Month Current Fiscal Year to Date Prior Fiscal Year to Date Gross !APPlicable! Outlays Outlays Receipts Gross !APPlicable! Outlays Receipts Outlays Gross !APPlicable lOti Outlays Receipts u ays Classification Undistributed offsetting receipts:-Continued Interest received by trust funds: The Judiciary: ............ . . Judicial survivors annuity fund Department of Defense-Civil: Corps of Engineers Military retirement fund Education benefits fund Soldiers' and airmen's home permanent fund ........... ................ Other., . Department of Health and Human Services: Federal hospital insurance trust fund Federal supplementary medical insurance trust fund Department of Labor: . ................. Unemployment trust fund .. Department of State: Foreign Service retirement and disability fund Department of Transportation: Highway trust fund Airport and airway trust fund ........... Oil spill liability trust fund Department of Veterans Affairs: National service life insurance fund ........... United States government life Insurance Fund Environmental Protection Agency National Aeronautics and Space Administration Office of Personnel Management: Civil service retirement and disability fund .... Social Security administration (off-budget): Federal old-age and survivors insurance trust fund Federal disability insurance trust fund ........... Independent agenCies: Railroad Retirement Board Other ................ . .......... Other ................ Total-Interest received by trust funds .. ) ( ( -5 80 -2 -1 .. ) -6 -6 -4 -4 -5 80 -2 -1 -7 -5,215 -15 -2 -7 -5,215 -15 -2 ( ( ..) -5 -5,338 -17 -4 -1 -5 -5,338 -17 -4 -1 ..) -6 -14 -6 -14 -5,180 -563 -5,180 -563 -5.346 -919 -5.346 -919 -9 -9 -1.675 -1.675 -1.295 -1.295 .. ) -312 -312 -299 -299 -6 -4 -588 -389 -2 -588 -389 -2 -514 -374 -2 -514 -374 -2 -525 -4 -1 -525 -4 -1 -536 -4 -536 -4 ( ( ( ( ( ( .. ( ) ( -6 -4 .. .. .. .. ..) ( ) ( ( ) (" ') ( ) ( ..) .. .. ) .... ) .... ) ) ) ) .. ) -14.083 -14.083 -13.804 -13.804 -15 -3 -15 -3 -16.520 -1.095 -16.520 -1,095 -15.128 -828 -15.128 -828 -77 -3 1 -77 -3 1 -515 -9 25 -515 -9 25 -177 -5 -49 -177 -5 -49 -65 -65 -46.681 -46.681 -44.649 -44.649 ( ) ( Rents and royalties on the outer continental shelf lands Sale of major assets . . . . . . . . . . . . . . . . . . ........... ............................ Spectrum auction proceeds 322 -322 1.003 -1.003 773 -773 ................ -2,556 322 -2,877 -56,503 1,003 -57,506 -54,629 773 -55,402 Total outlays ............. , ..... , .... " ....................... 141,421 17,774 123,647 571,447 68,006 503,441 564,996 67,937 497,060 ........................................... 110,681 12,625 98,056 462,141 48,414 413,727 459,574 49,605 409,969 Total off-budget .............. , ..... " ... " ......... , ...... 30,740 5,149 25,591 109,306 19,592 89,714 105,422 18,332 87,090 Total-Undistributed offsetting receipts Total on-budget ................................ ........................................... +12,558 -56,939 -77,607 Total off-budget ., .... , ................................... ' +6,716 +20,291 +19,854 Total on-budget -36,648 +19,274 Total surplus (+) or deficit MEMORANDUM [$ millions] Receipts offset against outlays Current Fiscal Year to Date Proprietary receipts ...................................... . Receipts from off-budget federal entities ................ . Intra budgetary transactions Governmental receipts Total receipts offset against outlays ..... Comparable Period Prior Fiscal Year 16.292 15.477 91.188 855 108.335 86.252 738 102,467 . No TransactIons. (. ') Less than $500,000 Note: Details may not add to totals due to rounding 'Includes FICA and SECA tax credits, non-contributory military service credits, special benefits for the aged, and credit for unnegotiated OASI benefit checks. 'The Postal Service accounting IS composed of thirteen 28-day periods. To conform with the MTS calendar-month reporting baSIS used by all other Federal agencies, the MTS reflects USPS results through January 5th and estimates for $1,785 million through January 31th. 19 -57,752 Table 6, Means of Financing the Deficit or Disposition of Surplus by the U.S. Government, January 1996 and Other Periods [$ millions] Assets and Liabilities Directly Related to Budget Off-budget Activity Net Transactions (-) denotes net reduction of either liability or asset accounts Account Balances Current Fiscal Year Fiscal Year to Date 0' Beginning of This Month This Year Liability accounts: Borrowing from the public: PubliC debt securities. issued under general Financing authorities: ObllgallOns of the United States. ISSUed by: United States Treasury Federal Financing Bank Total. public debt securities Plus premium on public debt securities Less discount on public debt securities I Prior Year This Year I This Month Close This month -1.229 13,453 123.077 4,958,983 15,000 4.973.665 15.000 -1,229 13,453 123,077 4,973,983 4,988.665 4.972.436 15.000 4,987,436 -8 -1,278 -31 -2,135 -31 2,425 1,236 81,231 1,213 80,375 1.205 79.096 42 15,558 120,620 4,893,989 4,909.505 4.909,547 -104 1,180 -1,798 26,962 28,245 28.141 -62 16,738 118,823 4,920,950 4,937,750 4,937.688 4,682 -11,646 45,987 1,320,800 1,304,472 1,309,154 -3 205 171 3,188 3,395 3,392 Total public debt securities net of Premium and discount .......... . Agency securities. issued under special financing authorities (see Schedule B. for other Agency borrowing. see Schedule C) Total federal securities Deduct Federal securities held as investments of govemment accounts ................ . (see SChedule D) Less discount on federal securities held as investments of ........... . government accounts Net federal securities held as investments of govemment ............ . accounts 4,685 -11,850 45,817 1,317,612 1,301,077 1,305.762 -4,747 28,588 73,006 3,603,338 3,636,672 3,631,926 Accrued interest payable to the public Allocations of special drawing rights ......... .. Deposit funds Miscellaneous liability accounts (includes checks Outstanding etc.) 146 -170 4,949 -1,039 852 -268 13,600 -5,273 5,767 46 947 -5,398 50,611 7,380 8,186 4,813 51,317 7,283 16,836 580 51,464 7,113 21,785 -460 Total liability accounts .................................. , .. " ......... ,.,. -861 37,499 74,368 3,674,329 3,712,688 3,711,827 2,231 14,728 -409 -86 7,116 6,786 8,620 29,329 5,979 14,515 8,210 29,243 16,959 -495 13,902 37,949 20,495 37,454 -258 -257 183 11,035 -10,168 11,037 -10,168 10,778 -10,168 -258 -257 183 867 869 610 -923 -1,458 169 247 -22 -1 -2 31,762 8,196 -26,315 -105 31,762 7,661 -26,151 -105 31,762 6,738 -26,147 -106 580 -340 917 -373 -172 1,145 1,482 2,062 51 14,682 14,650 14,310 Loans to International Monetary Fund Other cash and monetary assets ("') ("0) (oo) 1,073 1,163 3,114 30,525 30,615 31,688 Total cash and monetary assets 17,434 38 17,250 84,023 66.628 84.061 Net activity. guaranteed loan financing Net activity. direct loan financing Miscellaneous asset accounts -403 2,586 -1,203 -231 5,073 -4,029 -504 2,655 -2,559 -12,714 19,732 -1,721 -12,542 22,220 -4,548 -12,945 24,805 -5,750 Total asset accounts .................................................... . 18,413 851 16,842 89,320 71,758 90,171 Excess of liabilities (+) or assets (-) .............. ,' ................... . 19,274 +36,648 +57,526 +3,585,008 +3,640,930 +3,621,656 +3,585,006 +3,640,930 +3,621,656 Total borrowing from the public Asset accounts (deduct) Cash and monetary assets: U.S. Treasury operating cash:' Federal Reserve account Tax and loan note accounts Balance Special drawing rights: Total holdings SDR certificates issued to Federal Reserve banks ... Balance Reserve position on the U.S. quota in the IMF: U.S. subscription to International Monetary Fund: Direct quota payments Maintenance of value adjustments .............. . ........... . Letter of credit issued to iMF Dollar deposits with the IMF ............ . Receivable/Payable {-I for interim maintenance of value adjustments 4 -1 Balance Transactions not applied to current year's surplus or deficit (see Schedule a for Details) Total budget and off-budget federal entities (financing of deficit (+) or disposition of surplus (-)) ...................... , .................... . 227 -19,274 'Malor sources of Information used to determine Treasury's operaMg cash Income Include Federal Reserve Banks the Treasury Regional Finance Centers. the Internal Revenue Selvice Centers. the Bureau of the PubliC Debt and vanous electroniC systems. Deposits are reflected as received and Withdrawals are reflected as processed +36,648 +57,752 No Transactions. (. ') Less than 5500.000 Note: Details may not add to totals due to rounding 20 Table 6, Schedule A-Analysis of Change in Excess of Liabilities of the U,S, Government, January 1996 and Other Periods [$ millions] Fiscal Year to Date Classification This Month I This Year ... Excess of liabilities beginning of period: Based on composition of unified budget in preceding period Adjustments during current fiscal year for changes in composition of unified budget: Revisions by federal agencies to the prior budget results ..... . 3,640,930 3,584,970 Prior Year 3,422,146 -268 39 ----~~~--~-------------- Excess of liabilities beginning of period (current basis) ............... . 3,640.930 3,585,008 3,421,878 Budget surplus (-) or deficit: Based on composition of unified budget in prior fiscal yr .......... . Changes in composition of unified budget ........................... . -19,274 36,648 57,752 ==================== ----------------------------19,274 36,648 57,752 Total surplus (-) or deficit (Table 2) ................................... . ====~==~======== Total-on-budget (Table 2) Total-oll-budget (Table 2) -12,558 56,939 77,607 -6,716 -20,291 -19,854 Transactions not applied to current year's surplus or deficit: Seigniorage ............................................................ . -227 Total-transactions not applied to current year's Surplus or deficit ............................................................... . -227 ---------------------------- Excess of liabilities close of period ==================== .................................. . 3,621,656 3,621,656 3,479,404 Table 6, Schedule B-Securities Issued by Federal Agencies Under Special Financing Authorities, January 1996 and Other Periods [$ millions] Net Transactions (-) denotes net reduction of liability accounts Account Balances Current Fiscal Year Classification Fiscal Year to Date Beginning of This Month I Prior Year This Year Agency securities, issued under special financing authorities: Obligations of the United States, issued by: Export-Import Bank of the United States ............................... . Federal Deposit Insurance Corporation: FSLlC resolution fund ............................................ . Obligations guaranteed by the United States, issued by: Department of Defense: Family housing mortgages ............................................ . Department of Housing and Urban Development: Federal Housing Administration ....................................... . Department of the Interior: Bureau of Land Management ......................................... . Department of Transportation: Coast Guard: Family housing mortgages .......................................... . Obligations not guaranteed by the United States, issued by: Legislative Branch: Architect of the Capitol ............................................... . Department of Defense: Homeowners assistance mortgages ................................. . Independent agencies: Farm Credit System Financial Assistance Corporation ............... . National Archives and Records Administration ....................... . Tennessee Valley Authority ........................................... . -32 -66 -32 -55 5 This Year -32 -53 5 (' ') (") (") 158 158 126 6 6 6 87 97 31 13 13 13 (") (") (") 182 186 187 (") (") 1,261 295 26,229 1,261 295 26,221 28,245 28,141 (") Total, agency securities No Transactions. (' ') Less than $500,000. Note: Details may not add to totals due to rounding. 21 I This Month Close of This month -8 1,261 -1,718 1 ,261 295 24,960 -104 1,180 -1,798 26,962 Table 6. Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities, January 1996 and Other Periods [$ millions] Account Balances Current Fiscal Year Transactions Classification Beginning of Fiscal Year to Date This Month I This Year Borrowing from the Treasury: Funds Appropnated to the President: Intemattonal Security Assistance: Foreign military loan program Agency for Intemational Development: Intemational Debt Reduction Housing and other credit guaranty programs Private sector revolving fund , , , , , ...... . Overseas Private Investment Corporation ................ . Department of Agriculture: Farm Service Agency: Commodity Credit Corporation ............................. .. Agricultural credit insurance fund ... . Natural Resources Conservation Service Rural Utilities Service: Rural electrification and telephone revolving fund .............................. . Rural Telephone Bank Rural development insurance fund ................. . Rural communication development fund ................ .. .......... . Rural housing and Community Development Service: Rural housing insurance fund ............................ . Self-help housing land development fund Rural Business and Cooperative Development Service: Rural development loan fund ... Rural economic development loan fund Foreign Agricultural Service Department of Education: Federal direct student loan program Federal family education loan program College housing and academic facilities fund College housing loans Department of Energy: Isotope production and distribution fund Bonneville power administration fund Department of Housing and Urban Development: Housing programs: Federal Housing Administration .. , ......... . Housing for the ederly and handicapped PubliC and Indian housing: Low-rent public housing Department of the Interior: Bureau of Reclamation Loans Bureau of Mines, Helium Fund ......... , ... . Bureau of Indian Affairs: Revolving funds for loans Department of Justice: Federal prison industries, incorporated Department of Transportation: Federal Highway Administration: High priority quarters loan fund Federal Railroad Administration: Railroad rehabilitation and improvement ............................. . finanCing funds Amtrak corridor improvement loans Other Federal AViation Administration: Aircraft purchase loan guarantee program ............. . Minority bUSiness resource center fund Department of the Treasury: Federal Financing Bank revolving fund Department of Veterans Affairs: Guaranty and indemnity fund Loan guaranty revolving fund Direct loan revolving fund Native amencan veteran housing fund Vocational rehabllitatton revolving fund .. , ........ . 343 This Year Prior Year 337 This Month 788 1,131 1,131 335 125 52 335 125 1 66 335 125 1 71 1 5 18 80 -6,836 604 -9,248 -1,748 6,987 1,605 4 71 2,207 4 151 2,209 4 678 -19 220 689 98 715 8,666 664 2,806 25 9,344 644 3,026 25 9,344 644 3,026 25 951 1,177 5,353 (" "j 6,304 (" "j 6,304 (""j 61 30 563 78 30 563 78 30 563 5,067 1,134 184 360 12,674 1,134 184 359 12,674 1,134 184 359 2,563 2,563 2,653 1,647 7,714 1,579 7,714 1,579 6,909 2 1 17 40 5 -7 7,607 4,868 18 r"j 90 90 -14 55 -805 -68 -805 -770 -21 -20 20 9 17 252 26 252 26 252 28 28 28 20 20 20 32 32 32 (" "j r "j 3 3 (" "j (" "j n 3 n (" "j 15 r "j (""j 28 22 8 (" "j (" "j -7 7 -167 -5,783 -8,200 69,297 63,681 63,515 1,161 722 1,161 722 (" "j (" "j 302 1,272 1 302 1,272 1 18 18 -1 586 903 (" "j 12 7 2 7 1,463 1,994 1 25 (" "j 22 I Close of This month Table 6. Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities January 1996 and Other Periods-Continued ' [$ millions] Account Balances Current Fiscal Year Transactions Classification Fiscal Year to Date Beginning of This Month This Year Borrowing from the Treasury.-Contlnued Environmental Protection Agency: Abatement, control, and compliance loan program Small Business Administration: Business loan and revolving fund .. Disaster loan fund ................. . Independent agencies: District of Columbia ................ . Export-Import Bank of the United States Federal Emergency Management Agency: National insurance development fund Disaster assistance loan fund ........ . Pennsylvania Avenue Development Corporation: Land aquisition and development fund Railroad Retirement Board: Rail industry pension fund .. Social Security equivalent benefit account Smithsonian Institution: John F. Kennedy Center parking facilities Tennessee Valley Authority .1 10 283 52 258 Total agency borrowing from the Treasury financed through public debt securities issued Borrowing from the Federal Financing Bank: Funds Appropriated to the President: Foreign military financing program Department of Agriculture: Farm Service Agency: Agriculture credit insurance fund Rural Utilities Service: Rural electrification and telephone revolving fund Rural development insurance fund .............. . Rural housing and Community Development Service: Rural housing insurance fund ............ . Department of Defense: Department of the Navy Defense agencies.. .. ............ . Department of Health and Human Services: Medical facilities guarantee and loan fund Department of Housing and Urban Development: Low rent housing loans and other expenses ................. . .......... . Community Development Grants Department of Interior: Territorial and international affairs Department of Transportation: Federal Railroad Administration Federal Transit Administration General Services Administration: Federal buildings fund .......... . Small Business Administration: Business loan fund Independent agencies: Export-Import Bank of the United States FSLlC resolution fund: Resolution Trust Corporation closeout ... Pennsylvania Avenue Development Corporation Postal Service .......... .. Tennessee Valley Authority..... . ......... . 11 47 47 342 7,999 342 7,999 342 7,999 -25 147 2,665 96 2,723 379 2,723 175 268 222 393 222 445 222 85 85 85 2,128 2,828 2,128 3,588 2,128 3,846 20 150 20 150 20 150 995 409 -9,336 134,892 133,609 135,302 -32 -67 -69 3,493 3,458 3,426 1,470 1,470 1,470 -49 -230 -8 21,875 3,675 21,744 3,675 21,645 3,675 -685 -460 21,700 21,015 21,015 -49 -47 1,624 -192 1,624 -192 1,624 -242 -9 33 33 33 (") -62 -5 -58 -6 1,689 89 1,627 84 1,627 84 -1 -1 -1 21 21 20 -1 -3 -665 14 14 14 2 -14 79 1,893 1,877 1,879 -3 -16 -39 361 349 345 -463 -478 2,506 2,044 2,044 18 -2,738 42 -1,500 -5,375 37 -900 -200 13,209 374 7,265 3,200 10,471 398 5,765 3,200 10,471 416 5,765 3,200 -163 -5,787 -8,200 84,298 78,674 78,511 ... No Transactions. (' ') Less than $500,000 Note: Details may not add to totals due to rounding Note: This table includes lending by the Federal Financing Bank accomplished by the purchase of agency financial assets. by the acquisition of agency debt securities. and by direct loans on behalf of an agency. The Federal Financing Bank borrows from Treasury and issues its own securities and in turn may loan these funds to agencies in lieu of agencies borrowing directly through Treasury or issuing their own securities. 23 I This Month 37 177 1,019 This Year 1,693 -98 Total borrowing from the Federal Financing Bank .............. .. 232 59 Prior Year Close of This month Table 6. Schedule D-Investments of Federal Government Accounts in Federal Securities, January 1996 and Other Periods [$ millions] Securities Held as Investments Current Fiscal Year Net Purchases or Sales (-) Classification Fiscal Year to Date Beginning 01 This Month This Year -, Prior Year This Year I Close 01 This month This Month Federal funds: Department 01 Agriculture Department 01 Commerce Department of Defense-Military: Defense cooperation account . . . . . . . . . . . . Department of Energy Department of Housing and Urban Development: Housing programs: Federal housing administration fund Government National Mortgage Association: Management and liquidating functions fund: Agency securities ................. Guarantees of mortgage-backed securities: ........... Public debt securities Agency securities ..... .............. Other ..................... Department of the Interior Department of Labor ................ Department of Transportation ...... Department of the Treasury ............. Department of Veterans Affairs: Canteen service revolving fund ........ Veterans reopened insurance fund ..... Servicemen's group life insurance fund Independent agencies: Export-Import Bank of the United States Federal Deposit Insurance Corporation: Bank insurance fund ................ Savings association insurance fund ... FSLlC resolution fund ............. Federal Emergency Management Agency: National flood insurance fund ..... National Credit Union Administration Postal Service ................... Tennessee Valley Authority . .............. Other ............. .............. Other ......................... 2 3 20 21 2 22 14 (") 561 -4 304 4,951 1 5,498 1 5,512 (") 370 -162 6,678 7,048 7,047 -15 -15 15 15 53 -1 177 -1 7 -150 -307 12 1,423 19 505 -130 29 893 4,210 1 209 3,431 5,796 481 2,559 4,334 1 216 3,154 5,480 493 3,093 216 3,281 5,489 493 3,982 -1 -1 1 13 (") 4 14 -38 38 526 4 40 540 4 39 539 4 218 152 113 135 68 287 109 235 6 797 373 -252 2,072 106 -258 21,017 3,600 528 21,705 3,737 270 21,815 3,972 276 10 431 -233 106 45 -71 163 671 182 64 -110 19 270 -2,701 200 245 3,325 1,249 1,242 1,422 2,978 3,245 980 2,146 1,498 2,997 3,255 1,412 1,912 1,604 3,042 2,020 -16 4,188 -16 1,569 64,399 16 66,567 16 68,587 2,004 4,172 1,569 64,415 66,583 68,587 2 (") 1 9 (") 5 13 5 31 14 5 32 15 5 32 4 45 (") 27 4 287 310 292 312 291 356 (") (") (") (") 685 88 723 71 821 71 112,963 1,495 123,179 1,575 121,836 1,581 (") . . . . . . . .. . . ............ 127 9 888 ........... Total public debt securities Total agency securities .. Total Federal funds 2 2 2 ............................................. 173 (") 4,387 Trust funds: Legislative Branch: Library of Congress United States Tax Court Other The Judiciary: Judicial retirement funds Department of Agriculture Department of Commerce .............. Department of Defense-Military: Voluntary separation incentive fund ........... Other Department of Defense-Civil: Military retirement fund Other r .) ............ (") -2 43 ........... 99 (") -17 -1,343 7 8,874 87 24 136 12,156 77 Table 6, Schedule D-Investments of Federal Government Accounts in Federal Securities, January 1996 and Other Periods-Continued [$ millions] Securities Held as Investments Current Fiscal Year Net Purchases or Sales (-) Classification Fiscal Year to Date This Month This Year Beginning of 1 Prior Year This Year I Close of This month This Month Trust Funds-Continued Department of Health and Human Services: Federal hospital insurance trust fund ................................. .. Federal supplementary medical insurance trust fund .................. . Other ................................................................... .. Department of the Interior ............................................... .. Department of Justice ................................................... .. Department of Labor: Unemployment trust fund ............................................... . Other .................................................................... . Department of State: Foreign Service retirement and disability fund ......................... . Other .................................................................... . Department of Transportation: Highway trust fund ..................................................... . Airport and airway trust fund .......................................... . Other ................................................................... .. Department of the Treasury .............................................. . Department of Veterans Affairs: General post fund, national homes .................................... . National service life insurance .......................................... . United States govemment life Insurance Fund ........................ . Veterans special life insurance fund ................................... . Environmental Protection Agency ......................................... . National Aeronautics and Space Administration ......................... . Office of Personnel Management: Civil service retirement and disability fund ............................ . Employees life insurance fund ........................................ .. Employees and retired employees health benefits fund ............... . Social Security Administration: Federal Old-age and survivors insurance trust fund ................... . Federal disability insurance trust fund ................................. . Independent agencies: Harry S. Truman memorial scholarship trust fund .................... . Japan-United States Friendship Commission .......................... . Railroad Retirement Board ............................................. . Other .................................................................... . -794 293 -3 50 46 784 -186 -2 87 46 4,600 -1,594 29 89 52 129,864 13,513 992 315 131,443 13,035 993 353 130,649 13,328 990 403 46 -1,982 -8 -1,085 -39 -857 -38 47,141 77 48,038 46 46,056 38 9 274 -27 371 -11 7,801 29 8,066 2 8,075 2 816 -689 11 27 792 347 12 -81 434 -397 157 -95 18,531 11,145 1,880 235 18,507 12,182 1,881 127 19,323 11,492 1,892 154 -46 241 -3 38 234 (* *) 246 -1 37 461 -1 36 11,954 106 1,546 7,243 16 36 12,240 103 1,593 7,504 16 36 12,194 103 1,584 7,478 16 158 175 57 -45,692 309 -144 5,905 319 175 366,126 15,839 7,890 320,276 15,973 7,689 320,434 16,148 7,746 4,108 1,565 14,773 3,986 3,804 18,326 447,947 35,225 458,612 37,647 462,720 39,212 (**) (**) -1 -1 (**) (**) 116 1 395 -9 3 124 54 16 14,440 544 54 16 14,719 534 53 16 14,836 535 Total public debt securities .......................................... . 2,678 -15,818 44,419 1,256,385 1,237,889 1,240,567 Total trust funds ................................................ . 2,678 -15,818 44,419 1,256,385 1,237,889 1,240,567 Grand total ................................................................. . 4,682 -11,646 45,987 1,320,800 1,304,472 1,309,154 -9 -26 ... No Transactions Note: Investments are in public debt securities unless otherwise noted . Note: Details may not add to totals due to rounding. (' 'j Less than $500,000. 25 Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1996 [$ millions] March April May June July Aug_ Sept. Fiscal Year To Date Comparable Period Prior F.Y. Oct. Noy. Dec. Jan. Individual income taxes Corporation Income taxes SOCIal Insurance taxes and contributions: Employment taxes and contributions Unemployment insurance Other retirement contributions Excise taxes Estate and gift taxes ....... .... ..... Customs duties . Miscellaneous receipts . ....... ...... 51,840 2,180 39,524 1.694 53.179 38,021 86,192 5,158 230,734 47.053 213.971 39,726 30,549 1,214 342 4,453 1,160 1,786 2,070 34,919 2,940 340 5,154 1,349 1,593 2,496 37.123 223 416 4,870 1,383 1.439 1,618 40,742 1,081 374 4,241 1,288 1,482 2,364 143,333 5.457 1.472 18,718 5,179 6,300 8,548 139,748 5,621 1,505 19,052 4,519 6,960 8,205 ........... ........................ ........................ 95,593 90,008 138,271 142,922 466,793 ...... 72,200 63,651 110,322 110,615 356,788 . ..... 23,393 26,357 110,005 Classification Feb. Receipts: Total-Receipts this year (On-budget) (Off-budget) 27,949 32,307 . ..... Total-ReceIpts prior year 89.024 87.673 130.810 131.801 439.307 (On budget) 65.384 62.083 103.860 101.036 332.363 23.639 25.590 26.950 30.765 106.944 175 197 14 173 196 14 158 226 14 262 320 18 768 939 60 1,125 870 81 120 764 239 138 1,262 4,039 801 -199 256 183 240 -286 585 350 1,882 48 2,008 183 820 4,990 353 2,104 4,436 280 352 3,888 250 112 4,138 363 3,387 17.452 1,248 7,727 17,517 1,217 3,033 5,957 3,616 5,927 6,721 3,250 8,009 7,265 3,924 3,325 7,723 4,579 20,294 27,665 15,370 21,098 29,135 18,937 2,645 535 307 2,689 611 287 2,905 635 296 2,985 543 337 11,225 2,323 1,226 11,444 1,973 1,070 796 381 1,105 -328 702 253 -145 24 2,458 330 21 -170 17,270 20,262 23,988 19,371 80,891 83,508 2,660 2,056 1,495 2,707 2,336 1,383 2,593 1,891 1.498 2,718 3,624 1.139 10,678 9,907 5,515 10,440 10,923 6,083 1,902 1,696 1.478 1,632 6,708 6,775 7,252 9,082 8.071 9,869 6,702 10,302 6.730 10.169 28,754 39,423 28,703 35,162 5,367 3,934 5,913 3,792 6,032 3,577 5,758 6,161 23,070 17,465 20,940 14,112 2.426 -5,545 2,972 -5,485 2,607 -4,931 3,051 -8,049 11,057 -24,011 11,210 -20,011 1,087 641 809 2,350 478 985 2,701 500 837 2,646 537 1,110 8,785 2,156 3,740 9,732 2,588 3,569 1,786 730 531 1,864 957 341 2,133 298 439 2,872 661 300 8,655 2,646 1,610 8,049 1,655 2.194 1,632 1,873 1.492 1,315 6,311 6,163 (Off budget) Outlays ........... Legislative Branch The Judiciary ...... . . . . . . . Executive Office of the President ..... Funds Appropriated to the President: International Security Assistance .. International Development ........ . .... Assistance ..... Other Department of Agriculture: Commodity Credit Corporation and Foreign Agricultural Service ..... Other ... ..... Department of Commerce . Department of Defense: Military: ........ Military personnel . .... Operation and maintenance ... ..... Procurement ........... ..... Research, development, test, and evaluation Military construction ....... ..... Family housing Revolving and management funds Other Total Military . ..... .... Civil Department of Education . ... ..... Department of Energy . Department of Health and Human Services: Public Health Service Health Care Financing Administration: Grants to States for Medicaid Federal hospital ins. trust fund Federal supp. med. ins. trust fund Other Administration for children and families Other Department of Housing and Urban Development Department of the Interior Department of Justice Department of Labor: Unemployment trust fund Other De partment of State De partment of Transportation Htghway trust fund 26 Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1996-Continued [$ millions] Oct. Classification Nov. Dec. Jan. Feb. March April May June July Aug. Sept. Comparable Period Prior F.Y. Fiscal Year To Date Outlays-Continued Other .................................. Department of the Treasury: Interest on the public debt . . . . . . . .. . . Other .................................. Department of Veterans Affairs: Compensation and pensions .......... National service life ................... Un~ed States govemment life ........ Other .................................. Environmental Protection Agency ....... General Services Administration ......... National Aeronautics and Space Administration .......................... Office of Personnel Management ....... Small Business Administration .......... Social Security Administration: Federal old-age and survivors ins. trust fund (off-budget) ............... Federal disability ins. trust fund (offbudget) ............................... Other .................................. Independent agencies: Fed. Deposit Ins. Corp: Bank insurance fund ............... Savings association insurance fund . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . FSUC resolution fund: RTC closeout .................... Other ............................. Affordable housing and bank enterprise .......................... Postal Service: Public enterprise funds (offbudget) ............................ Payment to the Postal Service fund ............................... Oversight Board ...................... Tennessee Valley Authority ........... Other independent agencies .......... Undistributed offsetting receipts: Employer share, employee retirement ............................ Interest received by trust funds ...... Rents and royalties on outer continental shelf lands ............... Other .................................. 1,506 1,427 1,630 1,800 6,363 6,924 21,631 -30 26,006 -1,053 60,676 1,146 20,923 406 129,236 467 122,033 1,207 101 75 1 1,442 484 339 1,488 63 1 1,710 538 389 2,911 63 1 1,441 435 477 83 83 1 1,985 595 -393 4,583 285 5 6,577 2,053 812 4,467 288 6 6,484 1,970 -266 1,128 3,576 16 1,119 3,418 238 973 3,576 76 1,208 3,379 -9 4,428 13,948 322 4,117 13,312 332 24,544 24,413 25,064 25,126 99,146 94,983 3,516 174 3,475 2,233 3,773 3,941 3,581 254 14,345 6,602 13,298 6,601 --609 -69 20 -110 -769 -2,025 -40 -14 -82 -235 -372 -106 -1,502 407 -840 87 -638 -71 -797 -37 -3,777 386 -5,048 226 (") ...... (") (") 1 2 -374 -618 333 -883 -1,542 -1,088 55 556 123 2,026 . ..... (") 3 21 (") (") 186 1,792 96 1,069 106 1,408 79 557 511 6,296 84 -4 765 7,337 -2,365 -2,562 -5,736 -40,465 -2,491 -65 -9,822 -46,681 -9,980 -44,649 -121 -322 ...... -1,003 -773 (") (") (") 118,352 128,458 132,984 123,647 503,441 92,151 101,767 121,753 98,056 413,727 11,231 . ..... ...... ...... ...... ...... ...... -2,404 -415 -361 -200 (") (") Totals this year: Total outisys (On-budget) ......................... ........................ (Off-budget) ..•••••.... , ..•.•.•••••• ..... ........................ Total-surplus (+) or deficit (-) (On-budget) (Off-budget) •...•••••••••••••••••.•. Total borrowing from the public .... Total-outlays prior year ........ ..... (On-budget) ... ...... ",. .... , .. . (Off-budget) ........ ......... Total-surplus (+) or deficit (-) prior year ........ .. ... ......... . ...... 25,591 89,714 +5,286 +19,274 -36,648 -19,951 -38,116 -11,431 +12,558 -56,939 26,201 26,691 -22,758 -38,450 -2,807 -334 +16,717 +6,716 +20,291 13,353 38,339 -18,358 -4,747 28,588 73,006 120,365 124,915 135,613 116,166 497.060 95,307 99,464 124.316 90,883 409.969 25,059 25,452 11,297 25,282 87.090 -4,803 +15,635 -57.752 (On-budget) ...... ... ... ...... , .. -29,922 -37,381 -20,456 +10,152 -77.607 (Off-budget) ..... . .. ....... ... .. + 19.854 , -31,342 -37,242 -1,420 +138 +15,653 +5,483 ... No transactions. (' ') Less than $500,000. Note: Details may not add to totals due to rounding. 27 Table 8. Trust Fund Impact on Budget Results and Investment Holdings as of January 31, 1996 [$ millions] Fiscal Year to Date This Month Securities held as Investments Current Fiscal Year Classification Beginning of Receipts Outlays Excess Receipts Outlays Excess This Year Trust receipts. outlays. and investments held: Airport and airway Black lung disability Federal disability insurance Federal employees life and health Federal employees retirement Federal hospital insurance Federal old-age and survivors insurance Federal supplementary medical insurance Highways ............. Military advances Railroad retirement Military retirement ......... , .... Unemployment Veterans life insurance All other trust 19.361 39,556 113,950 23,415 8,060 5,390 1,862 19,583 7,273 603 1,660 2,108 177 14,345 -145 13,152 39,423 99,146 23.070 7.382 4,913 2,673 9,365 8,655 325 1.575 140 20 3,946 145 6,209 133 14,804 345 678 476 -810 10,218 -1,383 278 85 782 261.447 88,018 226.164 88,018 35,283 47,448 782 173,429 138,146 35,283 97,784 49 79,292 49 18,492 306,186 113 378,116 113 -71,931 97,735 79,243 18,492 306,073 378,003 -71,931 Less: Offsetting proprietary receipts ........... 3,043 3,043 12,708 12,708 ............... 142,922 123,647 466,793 503,441 1,283 9,555 29,373 6,848 2,288 1,060 518 840 1,095 20 538 1,101 44 3,581 -229 3,255 10,169 25,126 5,758 1,784 1,062 692 2,376 2,872 119 640 -595 -3 1,586 229 -1,972 -615 4,248 1,089 504 -2 -174 -1,536 -1,777 -99 -102 Less: Interfund transactions .............. 59.132 10,901 58.349 10,901 Trust fund receipts and outlays on the basis ............. of Tables 4 & 5 48,230 Total Federal fund receipts and outlays .... Less: Interfund transactions .............. Federal fund receipts and outlays on the basis of Table 4 & 5 506 41 5,166 2,248 197 18,291 I This Month Close of This Month 11,145 12,182 11,492 35,225 23,729 374,219 129,864 447,947 13,513 18,531 37,647 23,662 328,640 131,443 458,612 13,035 18,507 39,212 23,894 328,805 130,649 462,720 13,328 19,323 14,440 112,963 47,141 13,606 14,060 14,719 123,179 48,038 13,937 14,288 14,836 121,836 46,056 13,882 14,535 1,256,385 1,237,889 1,240,567 Total trust fund receipts and outlays and investments held from Table 6- 0 .......................................... Net budget receipts &. outlays 19,274 -36,648 Note: Details may not add to totals due to rounding. ... No transactions. Note: Interfund receipts and outlays are transactions between Federal funds and trust funds such as Federal payments and contributions, and interest and profits on investments in Federal securities. They have no net eHect on overall budget receipts and outlays since the receipts side of sUCh transactions is oHset against bugdet outlays. In this table, Interfund receipts are shown as an adjustment to arrive at total receipts and outiays of trust funds respectively. 28 Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government January 1996 and Other Periods ' [$ millions] Classification This Month Fiscal Year To Date Comparable Period Prior Fiscal Year Individual income taxes ........................................... . Corporation income taxes ......................................... . Social insurance taxes and contributions: Employment taxes and contributions ........................... . Unemployment insurance ....................................... . Other retirement contributions .................................. . Excise taxes ........... . .......................................... . Estate and gift taxes .................................. . Customs .................................. . Miscellaneous ................................... . 86.192 5.158 230.734 47.053 213.971 39.726 40.742 1.081 374 4.241 1.288 1,482 2.364 143.333 5,457 1.472 18.718 5.179 6.300 8.548 139.748 5.621 1.505 19.052 4.519 6.960 8.205 Total ........................................................ . 142,922 466,793 439,307 National defense ................................................... . Intemational affairs ................................................ . General science. space. and technology ......................... . Energy . . ........................................... . Natural resources and environment ............................... . Agriculture ......................................................... . Commerce and housing credit .................................... . Transportation ..................................................... . Community and Regional Development ........................... . Education. training. employment and social services ............ . Health ................. ' ........................................... . Medicare........... . ....................... . Income security ......... . ............................. . Social Security ............... . ............................. . Veterans benefits and services ................................... . Administration of justice ........................................... . General government .......... . ............................ . Interest ............................................................. . Undistributed offsetting receipts .................................. . 20.243 1.089 1.536 115 1.869 336 -2.014 3.094 1.009 5,418 8.665 14.079 17.188 28.707 2.165 1.806 391 20.765 -2.812 85.207 4.210 5.711 789 8.660 4.443 -5.590 12.622 3.950 16.782 37.078 55.601 69.582 113.161 11,474 5.519 4.744 80.322 -10.825 87.751 8.848 5.512 1.748 8.967 7.820 -6.953 13.041 3.957 18.163 36.842 49.767 67.083 108.283 11.288 5.362 4.555 75.780 -10.753 Total ........................................................ . 123,647 503,441 497,060 RECEIPTS NET OUTLAYS Note: Details may not add to totals due to rounding. 29 Explanatory Notes 1. Flow of Data Into Monthly Treasury Statement The Monthly Treasury Statement (MTS) is assembled from data In the central accounting system. The major sources of data Include monthly accounting reports by Federal entities and disburSing officers. and daily reports from the Federal Reserve banks. These reports detail accounting transactions affecting receipts and outlays of the Federal Government and off-budget Federal entities. and their related effect on the assets and liabilities of the U.S. Government. Information is presented in the MTS on a modified cash basis. the employee and credits for whatever purpose the money was Withheld Outlays are stated net of offsetting collections (Including receipts of revolving and management funds) and of refunds. Interest on the public debt (public issues) is recognized on the accrual basIs. Federal credit programs subject to the Federal Credit Reform Act of 1990 use the cash basis of accounting and are divided into two components. The portion of the credit activities that Involve a cost to the Government (mainly subsidies) is included within the budget program accounts. The remaining portion of the credit activities are in non-budget financing accounts Outlays of off-budget Federal entities are excluded by law from budget totals. However. they are shown separately and combined with the onbudget outlays to display total Federal outlays. 2. Notes on Receipts Receipts included in the report are classified into the following major categories: (1) budget receipts and (2) offsetting collections (also called applicable receipts). Budget receipts are collections from the public that result from the exercise of the Government's sovereign or governmental powers. excluding receipts offset against outlays. These collections. also called governmental receipts. consist mainly of tax receipts (including social insurance taxes). receipts from court fines. certain licenses. and deposits of earnings by the Federal Reserve System. Refunds of receipts are treated as deductions from gross receipts. Offsetting collections are from other Government accounts or the public that are of a business-type or market-oriented nature. They are classified into two major categories: (1) offsetting collections credited to appropriations or fund accounts. and (2) offsetting receipts (i.e .. amounts deposited in receipt accounts). Collections credited to appropriation or fund accounts normally can be used without appropriation action by Congress. These occur in two instances: (1) when authorized by law. amounts collected for materials or services are treated as reimbursements to appropriations and (2) in the three types of revolving funds (public enterprise. intragovernmental. and trust); collections are netted against spending. and outlays are reported as the net amount. Offsetting receipts in receipt accounts cannot be used without being appropriated. They are subdivided into two categories: (1) proprietary receipts-these collections are from the public and they are offset against outlays by agency and by function. and (2) intragovernmental fundsthese are payments into receipt accounts from Governmental appropriation or funds accounts. They finance operations within and between Government agencies and are credited with collections from other Government accounts. The transactions may be intrabudgetary when the payment and receipt both occur within the budget or from receipts from off-budget Federal entities in those cases where payment is made by a Federal entity whose budget authority and outlays are excluded from the budget totals. Intrabudgetary transactions are subdivided into three categories: (1) interfund transactions. where the payments are from one fund group (either Federal funds or trust funds) to a receipt account in the other fund group; (2) Federal intrafund transactions. where the payments and receipts both occur within the Federal fund group; and (3) trust intrafund transactions. where the payments and receipts both occur within the trust fund group. Offsetting receipts are generally deducted from budget authority and outlays by function. by subfunction. or by agency. There are four types of receipts. however. that are deducted from budget totals as undistributed offsetting receipts. They are: (1) agencies' payments (including payments by off-budget Federal entities) as employers into employees retirement funds. (2) interest received by trust funds. (3) rents and royalties on the Outer Continental Shelf lands. and (4) other interest (i.e .. interest collected on Outer Continental Shelf money in deposit funds when such money is transferred into the budget). 4. Processing The data on payments and collections are reported by account symbol into the central accounting system. In turn. the data are extracted from this system for use in the preparation of the MTS. There are two major checks which are conducted to assure the consistency of the data reported: 1. Verification of payment data. The monthly payment activity reported by Federal entities on their Statements of Transactions is compared to the payment activity of Federal entities as reported by disbursing officers. 2. Verification of collection data. Reported collections appearing on Statements of Transactions are compared to deposits as reported by Federal Reserve banks. 5. Other Sources of Information About Federal Government Financial Activities • A Glossary of Terms Used in the Federal Budget Process. January 1993 (Available from the U.S. General Accounting Office. P.O. Box 6015. Gaithersburg. Md. 20877). This glossary provides a basic reference document of standardized definitions of terms used by the Federal Government in the budgetmaking process. • Daily Treasury Statement (Available from GPO. WaShington. D.C. 20402. on a subscription basis only). The Daily Treasury Statement is published each working day of the Federal Government and provides data on the cash and debt operations of the Treasury. • Monthly Statement of the Public Debt of the United States (Available from GPO. Washington. D.C. 20402 on a subscription basis only). This publication provides detailed information concerning the public debt. • Treasury Bulletin (Available from GPO. Washington. D.C. 20402. by subscription or single copy). Quarterly. Contains a mix of narrative. tables. and charts on Treasury issues. Federal financial operations. international statistics. and special reports. • Budget of the United States Government. Fiscal Year 19 _ (Available from GPO. Washington. D.C. 20402). This publication is a single volume which provides budget information and contains: -Appendix. The Budget of the United States Government. FY 19_ -The United States Budget in Brief. FY 19 _ -Special Analyses -Historical Tables -Management of the United States Government -Major Policy Initiatives 3. Notes on Outlays Outlays are generally accounted for on the baSis of checks issued. electronic funds transferred. or cash payments made. Certain outlays do not require issuance of cash or checks. An example IS charges made against appropriations for that part of employees salaries withheld for taxes or savings bond allotments - these are counted as payments to • United States Government Annual Report and Appendix (Available from Financial Management Service. U.S. Department of the Treasury. Washington. D.C. 20227). This annual report represents budgetary results at the summary level. The appendix presents the individual receipt and appropriation accounts at the detail level. 30 Scheduled Release The release date for the February 1996 Statement will be 2:00 pm EST March 21, 1996. For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 (202) 512-1800. The subscription price is $35.00 per year (domestic), $43.75 per year (foreign). No single copies are sold. The Monthly Treasury Statement is now available on the Department of Commerce's Economic Bulletin Board. For information call (202)482-1986. DEPARTMENT OF THE TREASURY NEWS TREASURY ornCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 For Immediate Release February 22. 1996 Contact: Calvin Mitchell 202-622-2920 TREASURY ANNOUNCES ADDITIONAL TRANSITIONAL RELIEF On December 7. 1995, the Administration announced proposals regarding Corporate Subsidies, Loophole Closers and Other Measures. One proposal would amend section 1374 of the Internal Revenue Code to treat an "S" election by a large C corporation as a taxable liquidation of the C corporation followed by the contribution of the old corporation's assets to a new corporation that elects to be treated as an "S" corporation. Thus. the proposal would conform the treatment of conversions to "S" status to the treatment of conversions to a partnership. Treasury announced today that it will recommend to Congress that the section 1374 proposal apply only to S elections that are first efIective for a taxable year beginning after January L 1997. The proposal also would apply to acquisitions of a C corporation by an S corporation made after December 31, 1996. Thus, C corporations would continue to be permitted to elect S corporation status effective for taxable years beginning in 1996 or on January 1, 1997. Treasury also clarified the effect of the proposal on the conversion of C corporations to regulated investment companies (RICs) and real estate investment trusts (REITs). RICs and REITs are corporations that, like S corporations, generally achieve a single level of taxation (through dividends-paid deductions). The current-law treatment of C corporations that elect "S" status has also been extended by the Internal Revenue Service (IRS) administratively to C corporations that elect to be treated as a RIC or a REIT (Notice 88-19, 1988-1 c.B. 486). Treasury stated today that the IRS intends to revise Nutice 88-19 to conform to the proposed amendment to section 1374, with an effective date similar to the statutory proposal. Thus. large C corporations that elect to be treated as a RIC or a REIT after the revisions would be required to recognize any corporate-level gain at the time of the conversion. RR-885 -30- For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT OF TREASURY~ ~ THE TREASURY NEWS OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 February 23, 1996 Monthly Release of U.S. Reserve Assets The Treasury Department today released U.S. reserve assets data for the month of January 1996. As indicated in this table, U.S. reserve assets amounted to $82,717 million at the end of January 1996, down from $85,832 million in December 1995. End of Month Total Reserve Assets Gold Stock 1/ Special Drawing Rights 2/1/ Foreign Currencies 1./ Reserve Position in IMF 2/ 1995 December 85,832 11,050 11,037 49,096 14,649 82,717 11,052 10,778 46,575 14,312 1996 January 1/ 1/ J/ ~/ Valued at $42.2222 per fine troy ounce. Beginning July 1974, the IMF adopted a technique for valuing the SDR based on a weighted average of exchange rates for the currencies of selected member countries. The U.S. SDR holdings and reserve position in the IMF also are valued on this basis beginning July 1974. Includes allocations of SDRs by the IMF plus transactions in SDRs. Includes holdings of Treasury and Federal Reserve System; beginning November 1978, these are valued at current market exchange rates or, where appropriate, at such other rates as may be agreed upon by the parties to the transactions. RR-886 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 o EPA R T 1\;1 E N T 0 F' THE 'IREASURY (.) T REA SUR Y NEW S 17/1 q . 1500 PENNSYLV.\NL\ ,\\,E:\I('E. ~'.\\.• WASHINGTON. D.C.. 2 FOR RELEASE AT 2:30 P.M, February 23, 1996 CONTACT: 1_ 20 • (202) 622-2960 Office of Financing 202/219-3350 TREASURY'S 52-WEEK BILL OFFERING The Treasury will auctlon ~pproximately $18,750 million of 52-week Treasury bills to be issued March 7, 1996. This offering will provlde about $1.400 million oE new cash for the Treasury, as the maturing 52-week bill is currently outstanding in the amount of S17.352 million. In addition to the maturing 52-week bills. the~e are S26.1:7 million of maturing I3-week and 26-week bills. Federal Reserve Banks hold $11.153 m~llion of bills for their own accounts in the maturing lssues. These may be refunded at the weighted average discount rate of accepted competitive tenders. Federal Reserve Banks hold $4,160 million of the maturing issues as agents for foreign and international monet:.ary authorities. These may be refunded within the offering amount at the weighted average discount rate of accepted competitive tenders. Foreign and international monetary Q,uthorities are considered to hold $411 million of the maturing 52-week i.ssue. Due to t.he public debt limit anq Treasury's need to plan for t.he debt level. additional amounts of Treasury bills will not be issued to Federal Reserve Banks as agents for foreign and inter~ational monetary authorities in this auction Ten~ers for the bills will [:,,_ received at Federal Reserve Banks and Branches and at the 8ureau of the Public Debt, Washington. D, C. This oifet'ing of Treasury securiti~s is governed by the terms and conditions set forth in ~he Un~form Offering Circular (31 CFR Part 356) for the sale and 1ssue by the Treasury to che ~ublic of markct~ble Treasury bills. notes. and bonds. Details about the offering highlights. n~w securit:.y are 000 Attachment RR-887 g~ven in the attached HIGHLIGHTS OF TREASURY OFFERING OF 52-WEEK BILLS TO 8E ISSUED MARCH 7, 1996 February 23, 1996 Offering AmQunt . $18,750 million Description of Offering: Term and type of securlty CUSIP number Auction date Issue date Maturity date Original issue date Maturing amount. Minimum bid amoLnt Multiples . 3G4-day bill 912794 2M 5 February 29, 1996 March 7, 1996 March 6, 1997 March 7, 1996 $17,352 mill~on $10,000 $1,000 Submission of Bids: Noncompetitive b~ds Competitive blds Maximum Recognized Bid 2t a Single Yield Maxi~um Award . . . Receipt of Tenders: Non~ompetitive tenders Co~petit~ve tenders . Payment Terms . Accepted in full up to $1,000,000 at the average discount rate of accepted competitive bids (1) Must be expressed as a discount rate with two decimals, e.g., 7.~0\ (2) Net long posLtion for each bidder must be reported when the sum of the total bid amount, at all discount rates, and the net long position are $2 billion or greater. (3) Net long pOSition must be determined as of one half-hour prior to the closing time for receipt of competitive tenders. 35% of public offering 35% of public offering Prior to 12;00 noon Eastern Standard time 'on auction day Prior to 1:00 p.m. Eastern Standard time on auction day Full payment with tender or by charge to a funds account at a Federal Reserv'e bank on issue date DEPARTMENT OF THE TREASURY NEWS TREASURY ~~/78~9~. . . . . . . . . . . . . . . .1I................. .................................. OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 Remarks as prepared for delivery February 26, 1996 GOALS, GRASSROOTS, AND GIGABYTES Remarks of Richard S. Carnell Assistant Secretary of the Treasury for Fmancial Institutions Credit Union National Association Governmental Affairs Conference Washington, D.C. L INTRODUCTION My topic this morning is Goals, Grassroots, and Gigabytes. The goals are the ideals of the credit union movement. You and your members are the grassroots. And "gigabytes" is a computer term that I'm using as a shorthand way of referring to the future - the future in an information age. (Incidentally, a gigabyte represents eight billion bits of digital information - a gigantic number but not one you'll need to worry about here.) I will begin by talking about the ideals of the credit union movement and some of the implications of those ideals, now and for the future. I especially want to focus on the ideals of service and self-improvement. Then I'd like to touch on how technological innovation is having far-reaching effects on financial services, and what those changes might mean for you as credit unions. ll. CREDIT UNION IDEALS AND THEIR IMPLICATIONS Over the years, CUNA and others have sought to articulate the ideals of the credit union movement. You can find these ideals in formal documents like the "Statement of RR-888 (MORE) Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 Credit Union Operating Principles" adopted by the World Council of Credit Unions and endorsed by CUNA. You can find them in CUNA pamphlets like "Credit Unions: A World of Difference." And you can find them in the CUNA study entitled: "Credit Union Philosophy & Uniqueness." As I said in my introduction, I'd like to focus on two of these ideals: service and self-improvement. This is by no means an exhaustive list. I could talk about the importance of cooperation and mutual self-help. Or about credit unions' emphasis on equality. But I want to concentrate on service and self-improvement. They are very important ideals. They are also high ideals - challenging to live up to. A. SERVICE Let me begin with service. Few would dispute that service is crucial for any business enterprise, certainly including conventional, for-profit businesses. Over the past decade, we've seen companies around the country give new emphasis to customer service. They recognize that without satisfied customers, you can't stay in business - people will take their money and go elsewhere. Now even if it took some industries years to catch on, this emphasis on service comes as no surprise to credit unions. Service has been at the heart of credit unions' mission since the very beginning of the credit union movement. Let me quote from a CUNA publication entitled "Credit Unions: A World of DifferenceIt: "At credit unions, the highest priority is put on people. This means close personal service for all members regardless of the size of their deposits. This also means arranging loans for the jobless, providing credit counseling, encouraging thrift among young people, even helping to revitalize inner-city neighborhoods. It The fact is, you in the credit union movement hold yourselves to a very demanding standard. Service, according to the credit union philosophy, extends to much more than getting good feedback on a customer questionnaire. Service is also about service to the broader community. I think the World Council of Credit Unions expresses this ideal very well in its Statement of Credit Union Operating Principles: (MORE) 3 "Credit unions seek to bring about human and social development. ... The credit union ideal is to extend service to all who need and can use it. Every person is either a member or a potential member and appropriately part of the credit union sphere of interest and concern. Decisions should be taken with full regard for the interest of the broader community within which the credit union and its members reside. " Every time a credit union makes a loan to someone to help them get through difficult financial times, that credit union is reaffirming its commitment to serving the community. It gives hope and opportunity to one person, but in so doing it gives strength to the entire community. Credit. union members understand that cooperation and mutual self-help are also about achieving a higher goal. They're about helping each other so that we have better places to live, more prosperous communities, and more opportunities to succeed. The Clinton Administration shares this ideal of service. And the Administration has a deep respect for the values of the credit union movement - values like service, selfimprovement, cooperation, mutual self-help, and equality. The Administration has translated those shared values into real policies and programs. Think about the Community Development Financial Institutions Fund, which fosters community-based lending to help revitalize distressed communities in urban and rural areas around the United States. Think about Americorps - a voluntary program that gives young Americans an opportunity to serve their communities in exchange for college funding. I could go on about the Administration's focus on making investments in people - in job training and education - but I think I've made my point. These programs are all about serving people and their communities. Let's not forget how this approach differs from that of the two previous Administrations, in charge from 1981 through 1992. They took a very different view of cooperative enterprises like credit unions. They had an ideological distaste for them. They seemed to think that credit unions had no legitimate place in our free-market system. But we in this Administration believe that cooperative enterprise is valuable, and legitimate, and important. We want credit unions to do well, just as we want conventional for-profit financial institutions to do well. The various types of fmancial institutions -- all of them - . have important roles in our nation's financial system. They help meet people's needs for financial services, and they give consumers a choice. B. SELF-IMPROVEMENf Now I'd like to move on to a second ideal: self-improvement. (MORE) 4 There's a striking example of this ideal in the World Council of Credit Unions' call for self-audit and renewal. It says: "Credit union management and staff should regularly ask the question, 'How have we acted like (or unlike) a credit union today?'" This is not the sort of statement you see just anywhere. It's a remarkable call to reflection and renewal. It's a call to self-improvement as credit unions. It's a call to examine what you do - how you operate - in light of credit union ideals. I think this applies at several different levels. It applies to each individual credit union. It also applies to credit unions as a group. And it applies to credit unions organized together in associations like CUNA. The ideal of self-improvement carries with it an openness to change. Think back to that pair of questions: How have we acted like a credit union today? How have we acted unlike a credit union today? The whole idea of asking such questions is to try to rise above our old habits, our first reactions - the easy, comfortable, usual way of doing things. Let's think about what this means for how credit unions approach public policy issues - including issues regarding credit union supervision, and credit union safety and soundness. Some people seem to think the best way to protect the credit union movement is to resist any policy, any change, that didn't originate with credit unions themselves. For example, some proposal by the National Credit Union Administration. Perhaps they fear that if you go along with someone else's reasonable ideas, you'll establish some sort of precedent and have to go along with their unreasonable ideas, as well. Whatever the reason, it can be very easy to fall into a pattern of having a negative reflex reaction to outside proposals for reform. Many trade associations operate that way in Washington. They think it's a real badge of strength to be able to deep-six even reasonable proposals originating outside the trade association. They can show they're an 800-pound gorilla. They can show they can't be touched. It's a very macho mentality. And it's very respectable inside the Beltway - where many organizations spend much of their time trying to prevent or hijack change, and where lobbyists gin up campaigns to protect entrenched interests. I believe that credit union ideals point in a very different direction. I believe a movement committed to high ideals looks for ways to make things better. I believe a movement committed to self-improvement looks for ways to make itself better. If renewal is your goal, you don't just brush off new ideas. You look at what can best help you realize your ideals. Let me underscore this point by talking about David and Goliath, two names that appear in materials for this conference. I'd like to draw an analogy based on the kind of people David and Goliath were. (MORE) 5 The Biblical David was (among many other things) someone acutely open to selfreflection. He seems to have done his own regular self-audit. He was open to renewal, open to change. Goliath, by contrast, was a big bully, proclaiming that might makes right. He was about as open to self-audit and self-improvement as a pile of bricks. In a sense, we can think of David and Goliath as embodying different ways of approaching public policy issues. CUNA is free to choose either approach. Goliath is the 800-pound gorilla. He bats away proposals for reform like King Kong swatted those little biplanes. But David is open to self-improvement, open to change, open to renewal. That doesn't mean getting pushed around. It does mean looking for ways to come even closer to credit union ideals - those bedrock values that set credit unions apart. And here I want to emphasize the importance of strong, effective supervision by regulators like the NCUA. I know it's easy, in times like these, when the financial system is as healthy as it's been for decades, to get complacent and see supervision and examination simply as burdens. Remember that effective supervision protects your long-term interests. It is good for the health of your individual credit unions. It is good for the health and credibility of the credit union movement. And it protects your investments in the Share Insurance Fund. ID. TECHNOLOGICAL INNOVATION AND THE FUTURE I've talked a bit about change within the context of credit union ideals. Now I'd like to spend a few moments talking about change in financial services generally. Today we face rapid changes in financial services. Several key forces lie behind this transformation, including technological and fmancial innovation, consolidation, globalization, and customer demand. Each has important implications for the future. I'd like to share with you some thoughts about just one of these changes -- technological innovation -- because I think it will have such far-reaching effects. In many ways, the current technological revolution is best characterized by the explosion in information technology. In his book, The Road Ahead, Bill Gates of Microsoft writes: "What characterizes this period in history is the completely new ways in which information can be changed and manipulated, and the increasing speeds at which we can handle it." Let me go back to my opening point about gigabytes. You'll recall those are the eight billion bits of digital information I told you not to worry about. You probably don't think about gigabytes every day, but they're hard at work for you all the time. Computing power is a prime example of how quickly things change in this world. (MORE) 6 Every 18 months, the cost of computing power falls by half. Experts call this phenomenon Moore's law. Now let's put this in perspective. If we wait about the same length of time it'll take Congress to enact last year's budget, you and I can buy twice as much computing power for the same price. Moore's law has held true for several decades. In 1983, ffiM computer owners could buy 10 megabytes of additional computing power for $3,000 - or $300 per megabyte. Now let's fast forward to the present. Today you can buy a hard drive with 1.2 gigabytes - 9.6 billion bits of information - for only about $250. That's 21 cents per megabyte. From $300 down to 21 cents - that's value. But it means a great deal more than just value. It means opportunity. It means that as costs decrease and computing power and capacity increase, people will find new uses for information technology. They'll find faster, cheaper, and better ways to do what we do now. And they'll find ways to do things we hadn't even thought of in the past. The more people learn about and make use of these developments, the more they'll become comfortable with them and even demand more of them. Consumers today are more willing than ever before to use alternatives to brick-andmortar branches. They expect access to ATMs. Once they've tried direct deposit, they generally like it. And they're coming to accept debit cards. And that's not to speak of electronic benefits transfers and electronic money, which are laying the foundation for a fundamentally new paper-less payment system. I note that 31 percent of the homes in American owned a personal computer as of 1994, up by four million households over 1993. All of this means that the way in which retail financial services are provided will continue to change. Financial institutions will probably form alliances with providers of information technology to distribute products in new ways to consumers. Any consumer using the Internet can access the Worldwide Web and use financial planning "shareware" and spreadsheets to make their own calculations based on live data and quotes from a financial services firm. This will be assisted by the fact that, according to some estimates, by the year 2005, 80 percent of U. S. homes and offices will have some form of connection to the Internet. Others predict that by 1999 almost 50 percent of U.S. households will be using homeo-based financial services. Technology has slashed the costs of gathering information and transacting business, and could provide substantial economies of scale. That is, they could potentially give a competitive edge to large financial institutions able to make substantial up-front investments in technology. And they could help drive continued consolidation among financial institutions. The technological revolution will have profound implications for you as credit unions, as providers of financial services. Harnessing the new technology will take considerable (MORE) 7 effort and may have high up-front costs. ~uch may depend on how readily smaller institutions can purchase the relevant expertise from outside vendors, rather than having to develop it themselves. Perhaps CDNA, as a leader in the credit union movement, can keep a watchful eye to make sure such expertise is available. As our financial system becomes more concentrated and financial products become more standardized, credit unions -- as grass-roots, member-oriented org~tions -- can become even more important in assuring that people within their common bond get good, personal service. IV. CONCLUSION Let me close with a few observations, summarizing my key points. Service and self-improvement are among the ideals that define and distinguish credit unions. They are high ideals. And they are values the Admini~tration shares and respects, along with such other ideals as cooperation, mutual self-help, and equality. Service goes to the heart of how you treat your members and how you approach the larger community to which you and they belong. Self-improvement - including self-audit and renewal - are crucial if you are to remain centered on credit union ideals and strive to achieve them more closely. Remember the question: "How have we acted like a credit union today?" And remember that in approaching public policy issues CUNA has a choice between the way of David, the way of self-audit and renewal -- and the way of Goliath, the way of the 800pound gorilla. I have also touched here on technological innovation, its far-reaching significance for financial services, and the challenges it will pose to all financial institutions. Thank you for the opportunity to speak here today. I hope you will continue your tradition of excellent work in your communities across America. #### DEPARTMENT OF THE TREASURY TREASURy.l~,'~. ~~~ENE W y~'t' S ~/78£9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1I ................................ OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 FOR IMMEDIATE RELEASE February 23, 1996 Contact: Michelle Smith (202) 622-2960 STATEMENT BY DEPUTY TREASURY SECRETARY LAWRENCE SUMMERS We believe the GAO report on Mexico fully supports our conclusion that the program of support for Mexico is working. The Mexican Government has already repaid $2 billion in principal and more than $750 million in interest under the program. They have had continued success in returning to private capital markets and they are poised for a return to growth. -30- RR-889 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 DEPARTMENT TREASURY OF THE TREASURY ,NEWS OFFICE OF PUBUCAFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960 Integration in Our Hemisphere Remams by Lawrence H. Sununers Deputy Secretary of the Treaswy 1996 Customs/Trade Finance Symposiwn of the Americas Miami, Florida February 26, 1996 Thank you very much. It is always a pleasure to return to Miami, a city that exemplifies all the promise and opportunity unfolding in our hemisphere, and the ways in which North and South America are being steadily joined together. I would also like to thank Commissioner Weise and the Customs Service for their work in helping to organize this conference. I know that the Commissioner has already spoken to you about some of the initiatives that U.S. customs is undertaking with your own agencies to tackle challenges that are important to all countries in our region -- including cooperation on enforcement efforts, and work on bold new efforts at harmonization and rationalization of customs procedures. The drafting of a Customs Model and other cooperative efforts through the World Customs Organization will keep the momentum for liberalization and progress going worldwide. I am particularly pleased to speak at a conference such as this one, of both public officials and private business leaders gathered to discuss how we can foster further trade liberalization and economic reform in our own hemisphere. At a time when ideas about liberalization and free trade are under attack, it is tremendously important that you in this audience continue to advance your vision. The people of our hemisphere are on the verge of a new world. A truly hemispheric economy, set within a global economy, is emerging. The benefits that liberalization can offer are greater than ever in human history. The growth in hemispheric trade, and the rapid RR-890 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 expansion in hemispheric finance that we have seen in recent years means that all our nations have a greater stake in one another's economic and financial policies. Some seek to shut out the new global economy. Whether in recent calls for a halt to new trade agreements, or full-scale demands for protectionism, voices of economic nationalism of a form not in fashion since the 1920s are growing louder. Such policies were disastrous for America then, and they would be disastrous for America today. Our prosperity and our security depend on integration. Exports have boosted our economy, growing twice as fast as GDP since 1992. Nothing can do more to cement all our nations' security than ensuring that every resident of our hemisphere, from Chileans to Canadians, has the opportunity to prosper in an integrated hemispheric economy. As I said, it is very important for groups like yours -- that appreciate the value of global trade in goods and services, and know that we need United States engagement to get there -- to spread your point of view. The road to integration and reform is not a simple one. As we learned in 1995, there are bumps along the way. But if 1995 taught us anything, it taught us just how resilient reform in our region truly is. I'd like to speak for a few moments on that theme. Then I'll address the question of what our priorities must be in the years ahead. The Resilience of Refonn Last year, we met on the eve of the Summit of the Americas. The mood was truly one of satisfaction. • • • • The list of countries that had slashed government spending -- from Mexico to Bolivia - or wrestled hyperinflation under control -- as had Argentina or Peru -- was a long one. From Mexico to Chile, the message of privatization and liberalization seemed to be sweeping the hemisphere. Ten new democracies had been added to the list since the last hemispheric summit in the 1960s. With these reforms came some of the highest growth rates in the world -- 35 percent for Argentina over the first five years of the decade, 32 percent for Chile, and over 20 percent in Colombia. For all the celebration, I think there was one question that many observers shared: the question of just how deeply these reforms truly ran. It was hard to be sure whether privatization and democratization were being pushed from the ground up, by Latin America's citizens, or were being driven from the top down. It was hard to know whether a vision supported by Washington and Wall Street had taken hold at the roots of reforming societies. A Testing Year To be sure, the past year has been a difficult one. A changing financial environment, political shocks, policies that in retrospect were mistaken, and a sudden drop in market confidence last December all brought Mexico to the brink of serious difficulty, and threatened 2 to spillover into the rest of Latin America. There is no denying that the Mexican economy has suffered from deep recession, and that other countries, such as Argentina, have also been hurt by the drop in investor confidence. But if you take a long-run view, the significance of this past year is not in what happened over 1995, but rather in what did not. • • • • • • • What hasn't happened is the kind of retreat from economic reforms -- the kind of disintegration into popular upheaval and authoritarianism -- that took place following Latin America's last bout with financial crisis in 1982. What hasn't happened is the withdrawal into protectionism, nationalization, and state control of the economy that shattered Latin American economic efforts 15 years ago. What hasn't happened is a debt crisis that spiralled out of control, and threatened the United States' own financial system. Who in this room 14 months ago could have been certain that faced with the kind of shock that Mexico experienced, or that Argentina experienced, those countries and others in the region would not only stay the course of economic reform, but push even further? I think it is particularly telling that Argentina raised taxes in March only weeks before Presidential elections -- an election that President Menem won by a resounding margin. Who would have imagined that nearly one year after Mexico's difficulties, Brazil -- a nation as large as the rest of South America combined -- would be sitting on nearly $50 billion in reserves, and experiencing the lowest rate of inflation in 30 years? And who would have imagined that market confidence would return so quickly -- that Mexico would succeed in placing some $6.3 billion in paper after 14 months, that Peru would have $4.2 billion in commitments for future investments, on top of $4.3 billion in privatization proceeds over the past five years -- $1.1 billion this year alone. Even Argentina, which experienced some shaky months following Mexico's crisis, now enjoys reserves that are back at last December's levels, and a banking system which, though still facing the effects of a monetary squeeze, has seen deposits recover to levels exceeding those before Mexico's difficulties began. The significance of last year lies with these simple facts. 1995 was not like 1982. 1995 provided harder proof than anyone could have imagined that economic and social reform in Latin America and the Caribbean are not something being sold by Washington or Wall Street, or forced on unwilling populations by Harvard-educated leaders. Rather, the events of these past months have proven that reform is a Latin American and Caribbean movement, flowing from the grass roots up. United States Engagement The resilience of liberalization and change in our hemisphere are the first lesson of 1995. The second, is that change is not a one-country affair. Change requires the participation and support of all hemispheric neighbors. As 1995 has shown, change also requires continued United States involvement. 3 That was the spirit in which the United States hosted the Summit of the Americas one year ago. We realized, as we still do, the profound economic, political, and historic ties that bind us to the nations in this hemisphere. That is what informs United States policy going forward. United States Financial Engagement I'd like to say a few words about three areas in which the United States intends to remain engaged. I'll start with financial initiatives. One of the most hopeful developments for Latin America and the Caribbean, and indeed for many developing countries, has been the enormous and accelerated development of financial markets that has occurred over the past several years. It is why today, when Latin American and Caribbean countries embark on reforms, the capital is there to back them. • • • Consider this. A verage net capital flows to the region soared from a net outflow of some $17 billion from 1983 to 1989 to an average annual net inflow of $42 billion from 1990 through last year. The dollar value of market capitalization soared more than 2,000 percent in Colombia, Chile, and Mexico from 1985 to 1995, to cite the most spectacular examples. Latin America's aggregate stock market capitalization has grown some seven fold, from $54 billion in 1985 to a level approaching $400 billion at the end of 1995. For countries in our region to make full use of potential capital, the infrastructure of finance must be there. That means making sure that countries have appropriate bank supervision and regulation, to maximize use of domestic savings while channelling capital effectively. It means ensuring that capital markets are transparent and efficient, so that they can best mobilize investment into long-term projects. Harmonizing regional financial markets to a higher standard is an important way of furthering these objectives. We pledged to focus on these tasks at the Summit of the Americas. The effort is now underway. • • • The recently formed Committee on Hemispheric Financial Issues is working on ways to develop and integrate financial markets in the region. Today, differing or diverging accounting standards are a barrier to financial integration. A Colombian bank's books, for example, cannot be compared with those of a bank in Venezuela. Disclosure standards are another priority that will put investors in securities on a level playing field, opening up diversified, long-term financing. The World Bank and the Inter-American Development Bank have stepped up their work with governments to strengthen market supervision. • The IDB is backing several capital market infrastructure projects, such as Peru's effort 4 to modernize and merge its two largest exchanges. All of these initiatives will ensure that our region has the kinds of capital it needs to grow well into the next century. Responding to Crises As we saw this past year in Mexico"and as both industrialized and developing countries have experienced in recent years, capital markets can be imperfect. There are shocks along the way. Just as when a run on a bank occurs here at home and liquidity must be provided, it is vitally important to ensure that the capacity exists to mobilize financial support quickly on highly conditional terms when crises erupt that threaten parts of the international financial system. President Clinton understood the enormous United States interests -- the hundreds of thousands of American jobs, the security of our borders, and the broader transformation of emerging market economies -- that were at stake when Mexico's financial crisis erupted over a year ago. He knew that turbulence in. Mexico could have spilled over to other Latin American economies, as it did in 1982, as well as to other parts of the globe. That is why he moved swiftly to lead an international support effort. Future difficulties may arise. The United States can and must continue to lead the hemispheric and international response. Nonetheless, to ensure that the resources are there, and that the United States does not become the lender of last resort, there is a need for enhanced international capacity to mobilize financial assistance, when necessary. That capacity must lie with the international financial institutions. In Mexico's wake, we have stepped up efforts to create an emergency financing mechanism through the International Monetary Fund. Such a fund would rest on enhanced surveillance and transparency, as the bases of efforts to prevent crises before they occur. Trade and Integration Let me tum to a second sphere in which United States engagement and the participation of all your nations are essential -- opening markets to trade. Consider the United States stake in trade with the countries to our south. • • • • Mexico has been one of our fastest growing major trading partners. Chile, with 14 million people, buys more than India with 920 million. We sell more to the countries that make up MERCOSUR than we do to China. We sell about as much to Costa Rica, with three million people, as we do to all of Eastern Europe, with about 100 million. All told Latin America and the Caribbean purchased some $92 billion of American goods in 1994, almost as much as did the European Union. These exports support hundreds 5 of thousands of American jobs. They will grow enormously as the process of reform continues, and as prosperity continues to spread in our hemisphere. That is one reason why ensuring that markets remain open must be a top priority for the United States. The other involves the ways in which free trade locks in economic and social reform. Inter-regional trade quadrupled from 1984 to 1994. If you ask yourself why 1995 did not resemble 1982 -- why this time, countries responded to difficulties by pushing ahead with liberalization and reform, not by pulling back -- then integration has to be part of the answer. Integration cements change. Integration provides confidence and stability, where confidence and stability are needed. It ensures that our regions' citizens come to see their prosperity as intertwined, and dependent on their countries' mutual economic progress. Creating a prosperous, integrated region stretching from Canada to Chile is the best way to make sure that our region continues to move forward, and does not lapse back into the statism and authoritarianism of the past. NAFTA I think that NAFfA provides perhaps the best example of the ways in which integration locks in reform. As you know, some observers blame NAFfA for Mexico's difficulties. Such arguments are precisely backward. • • Even with the slump brought on by Mexico's recession, U.S. exports today are higher than they were before NAFfA entered into force. Though U.S. exports to Mexico fell by about 2 percent over the first 7 months of 1995 compared with the same period the year before, the U.S. share of Mexico's imports has increased. But NAFfA accomplished something more profound that just protecting American exports over the short-term. NAFTA locked in Mexico's removal of tariff and other trade barriers on our exports. NAFT A ensured that Mexico would not be tempted to pull back into protectionism, as it did in the early 1980s. Most important, NAFTA provided what Mexico needed most earlier this year -- confidence. Because Mexico is staying the course of reform, the basis for resumed economic growth this year has been established. NAFfA must take some of the credit. Free Trade in the Americas Free Trade should not be a three country or four country or five country affair. The Summit of the America's agreement to create a Free Trade Area of the Americas by the year 2005 is rightly seen as the meeting's crowning achievement. We have taken significant first steps toward turning that vision into a reality. • In June of 1995, hemispheric trade ministers met in Denver to set up seven working 6 • • groups on key issues, including market access, product standards, technical barriers, and trade remedies. Customs was high on the ministers' agenda. Their joint declaration created a Working Group on Customs Procedures and Rules of Origin. This Group will lead an essential effort to catalogue our hemisphere's customs procedures, develop features that are essential for efficiency, and make recommendations for specific initiatives to advance hemisphere-wide simplification, technical cooperation, and negotiations on rules of origin. I urge all of you to become engaged in this important effort. We need all your expertise to ensure that customs procedures continue to advance, so that all our nations can seize the opportunities offered by greater trade flows and liberalization. Chilean Accession to NAFTA Of course, the best way to lock in integration and economic reform is to make it clear that the club of free-traders is open to all, as soon as they are qualified to join. That is why President Clinton has stressed how critically important it is for the Administration to receive fast-track authority in order to rapidly negotiate and conclude Chile's accession to NAFfA. Let me emphasize -- there is no question that Chile is ready to take on the full range of responsibilities implied by NAFfA accession. No other major Latin American country has as good a record of sustained economic performance. With or without the United States, Chile will continue to move ahead with economic reform and liberalization, as a member of the World Trade Organization, of the Asia Pacific Economic Cooperation forum, and through enhanced ties with Mercosur and even perhaps with the European Community. Bringing Chile into NAFfA is the best way to ensure that the United States reaps the benefits of Chile's economic progress, while providing an example of the kinds of policies we hope the rest of Latin America will follow. Making Government Work Better There is a third area for hemispheric initiatives -- supporting institutional change. Reform in our hemisphere means more than just slashing budget deficits, or privatizing bloated state industries, or tearing down trade barriers. It means making sure that leaner governments do the things they are supposed to do, better than before. It means replacing corruption with legal-certainty, and back-room dealings with transparency. It means making sure that countries have an effective court-system, a trained civil service, and laws that are reliably enforced. The Summit of the Americas pledged all of our countries to focus on anchoring democracy and the rule of law. The United States is working with Latin governments and organizations to make that happen. • The OAS is building up its Unit for the Promotion of Democracy, to support electoral commissions, legislative training, and other programs to make sure governments have the capacity to do what governments must do. 7 • The Organization of Supreme Courts of the Americas is drawing up a charter to bolster the independence of judiciaries. We plan to negotiate a draft hemispheric Convention on Corruption, and establishment links between the OAS and the OECD Working Group on Bribery in International Business. Finally, money laundering is a phenomena whose effects in destabilizing government and thwarting legitimate business often aren't appreciated. In November, Secretary Rubin travelled to Argentina where he chaired a particularly important effort -- a conference to combat money laundering in our hemisphere. • The participating nations adopted of a set of principles that commits them to criminalize money laundering, modify their laws and enforcement systems to bolster enforcement efforts, and expand the tools at their enforcement officials' disposal. Conclusion I've spoken today about the challenges that all our nations' face, and how the United States and other nations can work together to meet them. Hopefully, many of the challenges that region faced a few years ago have been settled. There is a commitment to liberalization, to privatization, and to social reform. In some ways, the challenges faced by U.S. foreign policy are more complex. With the end of the Cold War, we must no longer decide what we are against, but what we are for. Many call for the United States to withdraw from the world. They believe we should pull back from multilateral organizations, that the President should not be granted fast-track authority to negotiate trade agreements, and that all alliances are unnecessary entanglements. We have heard echoes of those voices in Bosnia, and as we seek to maintain minimal appropriations for our foreign affairs budget. President Clinton has resisted these voices. He recognizes, as most Americans do, that there is no more important region for our nation than the Americas. He understands that if the history of our part of the world teaches us anything, it is the dangers of complacency. United States support for Latin and Caribbean change, and for the vision of an integrated hemisphere, will continue to be at the heart of America's international economic policy. That is why I am confident that if the 20th was the American century, the 21 st will be the century of all the Americas. 8 DEPARTMENT OF THE TREASURY ~~/78~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . .. ............................ OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960 ADV 1:30 P.M. EST Remarks as prepared for delivery February 26, 1996 REMARKS OF TREASURY SECRETARY ROBERT E. RUBIN DoD BRIEFING ON OPERATION JOINT ENDEAVOR TAX RELIEF THE PENTAGON I appreciate the opportunity to be here and talk about something of great importance to many Americans who are making a significant contribution to peace. The President, Secretary Perry and I are asking Congress to pass, as rapidly as possible, legislation to permit the President to make those who are serving in Operation Joint Endeavor be eligible for a variety of tax relief measures -- including tax-free pay and filing and tax payment delays. Such an action would properly recognize the sacrifices the men and women of our armed forces are making to support peace. The tax relief measures we are talking about would cover all the personnel in and around Bosnia, Croatia and Macedonia who are directly involved in or supporting Joint Endeavor. We are making this request because short of fighting America's wars, preserving and protecting the peace is also a vital responsibility of the military, and it is arduous and dangerous duty. Moreover, we believe these men and women who are serving the cause of peace deserve this tax relief. This request is in keeping with a practice of tax relief for members of our armed forces in these circumstances -- through presidential executive orders -- that dates back to the Korean War. I want to walk through some of the detail of the tax relief measures -- all of which under our proposal would be retroactive to November 21st of last year. RR-891 Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 2 Once in effect, these measures would: -- For everyone stationed in Bosnia and Croatia -- exempt from federal income tax all the pay of enlisted personnel and warrant officers, and up to $500 a month for commissioned officers - for the period they are involved in Joint Endeavor. That also applies for up to two additional years for those hospitalized as the result of service in Joint Endeavor. Further, those in this area would benefit from an extension of the filing and payment deadline. -- Our proposal also would extend the filing and payment deadline for everyone in the region around Bosnia and Croatia supporting Joint Endeavor. -- In the event of a fatality in the course of Joint Endeavor, all that individual's income for the tax years in which they served in Joint Endeavor is exempt from taxes. If estate tax applies, there is partial relief. -- There are other components of tax relief, such as an exemption from withholding from tax-free pay, which are spelled out in the materials we have available today. The President, Secretary Perry and I feel that the men and women who are sustaining the peace in Bosnia deserve the tax relief we are proposing, and we're asking Congress to act quickly on this request. -30- DEPARTMENT TREASURY OF THE TREASURY NEWS OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960 For Immediate Release February 26, 1996 Contact: Calvin Mitchell (202) 622-2920 T AX RELIEF FOR PERSONNEL INVOL VED IN OPERATION JOINT ENDEAVOR The Internal Revenue Code contains eight sections that provide special tax benefits for members of the Armed Forces serving in certain Presidentially designated areas. The Administration today is calling upon Congress to enact legislation that would allow these benefits to be extended by Presidential Executive Order to U.S. troops and certain civilians participating in and supporting Operation loint Endeavor. Military personnel and civilians serving in the Bosnia region and in support areas would get the benefit of section 7508(a), which extends a number of federal income tax deadlines while a member of the Armed Forces and certain civilians are serving in a designated area, are hospitalized as a result of such service. or in a missing status, and for at least 180 days thereafter. The other tax provisions that would become applicable to military personnel serving in the former republic of Yugoslavia are: • Section 112, which excludes from income the compensation earned by enlisted personnel and warrant officers. and up to $500 per month of the compensation earned by commissioned officers. during any month in which the individual is engaged in active service in a designated area or in which the individual is hospitalized (for up to two years) as a result of service in such an area, • Section 692. which exempts from federal income tax all income earned during any year in which a member of the Armed Forces serves in a designated area if the individual dies as a result of such service (in addition, federal income taxes attributable to prior years that are unpaid as of the date of death are not subject to collection) . • Section 2(a)(3), which allows the surviving spouse of an individual who dies while in missing status an additional period during which the surviving spouse tax rates are applicable, RR-892 For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040 -2- • Section 2201(a). which provides partial estate tax relief to the estates of individuals who die as a result of service in a designated area. • Section 3401(a). which provides relief from federal income tax withholding for all military compensation exempt from tax as provided above. • Section 4253(d). which provides an exemption from telecommunications excise taxes for telephone calls hy Am1ed Forces personnel that originate from a designated area. and • Section 6013(0. which allows the spouse of a member of the Armed Forces who is in missing status to file a joint return during the entire period in which the area is designated and for two years after the termination of that designation. Under the Administration's proposal. these provisions would be effective Novemher 21. 1995. -30- UBLIC DEBT NEWS Department of the Treasury. • Bureau of the Public Debt • Washington, DC 20239 f I .. •j FOR IMMEDIATE RELEASE February 26, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS Tenders for $12,379 million of 26-week bills to be issued February 29, 1996 and to mature August 29, 1996 were accepted today (CUSIP: 9127943E2). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.79% 4.80% 4.80% Investment Rate 4.98% 4.99% 4.99% Price 97.578 97.573 97.573 $1,500,000 was accepted at lower yields. Tenders at the high discount rate were allotted 17%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Received $55,716,353 Accepted $12,379,045 $48,394,895 1.178,658 $49,573,553 $5,057,587 1,178,658 $6,236,245 3,400,000 3,400,000 2,742,800 $55,716,353 2,742,800 $12,379,045 Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.77 - 97.589 RR-893 UBLIC DEBT NEWS Department of the T~ea~yry • Bureau of the Public Debt • Washington, DC 20239 i I J U I , I c FOR IMMEDIATE RELE.ASE February 26, 1996 CONTACT: Office of Financing 202-219-3350 RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS Tenders for $12,402 million of 13-week bills to be issued February 29, 1996 and to mature May 30, 1996 were accepted today (CUSIP: 912794Y99). RANGE OF ACCEPTED COMPETITIVE BIDS: Low High Average Discount Rate 4.84% 4.86% 4.86% Investment Rate 4.97% 4.99% 4.99% Price 98.777 98.772 98.772 Tenders at the high discount rate were allotted 25%. The investment rate is the equivalent coupon-issue yield. TENDERS RECEIVED AND ACCEPTED (in thousands) TOTALS Type Competitive Noncompetitive Subtotal, Public Federal Reserve Foreign Official Institutions TOTALS 4.85 - 98.774 RR-894 Received $54,246,886 AcceI:1ted $12,402,132 $49,004,100 1,380,706 $50,384,806 $7,159,346 1,380,706 $8,540,052 3,690,180 3,690,180 171,900 $54,246,886 171,900 $12,402,132 11111111111111111111 1 0092648