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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
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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
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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
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643297,289
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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
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II
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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
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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
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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.
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•
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.
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D E P :\
I{
T :\1 E N T
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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
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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.
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1996-01-07
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January 8, 1996
Contact:
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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.
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DEPARTMENT
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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.
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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)
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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.
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RR-818
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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-
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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
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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.
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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.
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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."
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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
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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
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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
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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
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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
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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
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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
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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
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January 79, 1996-25
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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
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Holiday
26
27
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Friday
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9
15
16
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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
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Auction
2 year3t
29
Announce
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5 year
26
Auction
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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
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30
28
26
24
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20
18
16
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12
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January 31,1996-30
SCHEDULE OF ISSUES TO BE ANNOUNCED AND AUCTIONED
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11
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13
14
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18
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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
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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
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.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
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1
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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
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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
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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
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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
•
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'
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
..'
•
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•
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..
..
•
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GLOBAL INFORMATION CEt-4TE'R
WI
• The New $100 Note
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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
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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:
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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.
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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.
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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.
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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
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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
@FedFRASER