Full text of Press Releases of the United States Department of the Treasury : Volume 387

View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Treas.
HJ
10
.A13
P4
v.387

Department of the Treasury

PRESS RELEASES

The following number was not used:
529

Numbers 406-409 are listed on the May, 2001 Index.

DEPARTMENT

IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

CONTACT:

FOR IMMEDIATE RELEASE
June 4,2001

Tony Fratto
(202) 622-2960

TREASURY CALLS FOR LARGE POSITION REPORTS
The Treasury is calling for Large Position Reports from those entities whose reportable position in the
4% Treasury Notes of April 2003 equals or exceeds $2 billion as of close of business Friday, May 25, 2001.
This call for Large Position Reports is a test. Entities with reportable positions in this note equal to or
exceeding this $2 billion threshold must report these positions to the Federal Reserve Bank of New York.
Entities with positions in this note below $2 billion are not required to file Large Position Reports. Reports,
which must include the required position and administrative information, must be received by the Securities
Reports Division of the Federal Reserve Bank of New York before noon Eastern time on Friday, June 8, 2001.
Large Position Reports may be filed by facsimile at (212) 720-5030 or delivered to the Bank at 33 Liberty
Street, 4th floor.

Details on Call for Large Position Reports
Security Description:

4% Treasury Notes of April 2003, Series P-2003

CUSIP Number:

912827 6W 7

CUSIP Number of STRIPS Principal Component:

912820 GF 8

Maturity Date:

April 30, 2003

Date for 'Yhich Information Must Be Reported:

May 25,2001 as of COB

Large Position Reporting Threshold:

$2 Billion (Par Value)

Date Report Is Due:

June 8, 2001, before noon Eastern time

This call for large position information is made under Treasury's large position reporting rules (17 CFR
Part 420). The notice calling for Large Position Reports is also being published in the Federal Register. This
press release and a copy of a sample Large Position Report, which appears in Appendix B of the rules at 17 CFR
Part 420, can be obtained from Treasury's automated fax system by calling (202) 622-2040 and requesting
document number 405. These documents are also available at the Bureau of the Public Debt's Internet site at the
following address: www.publicdebttreas.gov.
Questions about Treasury's large position reporting rules should be directed to Public Debt's Government
Securities Regulations Staff at (202) 691-3632. Questions regarding the method of submission of Large Position
Reports may be directed to the Securities Reports Division of the Federal Reserve Bank of New York at (212)
720-1449.
PO-405
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Appendix B to Part 420 - Sample Large Position Report.
Formula for Determining a Reportable Position
($ Amounts in Millions at Par Value as of Trade Date)

Security Being Reported:
Date For Which Information is Being Reported:
1.

Net Trading Position
$_ _ _ _ __
(Total of cash/immediate net settled positions; net when-issued positions; net forward
positions, including next day settling; net futures contracts that require delivery of
the specific security; and net holdings of STRIPS principal components of the security.)

Gross Financing Position
+ $._ _ _ _ __
(Total of securities received through reverse repos (including forward settling reverse
repos), bonds borrowed, collateral for financial derivative transactions and for other
securities transactions which total may be reduced by the optional exclusion described
in § 420.2(c).)

Net Fails Position
(Fails to receive less fails to deliver. If equal to or less than zero, report 0.)

+$._-----

TOTAL REPORT ABLE POSITION

==$,-----

Memorandum: Report one total which includes the gross par amounts of securities delivered through
repurchase agreements, securities loaned, and as collateral for financial derivatives and other securities
transactions. Not to be included in item #2 (Gross Financing Position) as reported above.

$,----Administrative Information to be Provided in the Report
Name of Reporting Entity:
Address of Principal Place of Business:
Name and Address of the DeSignated Filing Entity:
Treasury Security Reported on:
CUSIP Number:
Date or Dates for Which Information Is Being Reported:
Date Report Submitted:
Name and Telephone Number of Person to Contact Regarding Information Reported:
Name and Position of Authorized Individual Submitting this Report (Chief Compliance Officer; Chief Legal
Officer; Chief Financial Officer; Chief Operating Officer; Chief Executive Officer; or Managing Partner or
Equivalent of the Designated Filing Entity Authorized to Sign Such Report on Behalf of the Entity):
Statement of Certification: "By signing below, I certify that the information contained in this report with
regard to the designated filing entity is accurate and complete. Further, after reasonable inquiry and to the
best of my knowledge and belief, I certify: (i) that the information contained in this report with regard to any
other aggregating entities is accurate and complete; and (ii) that the reporting entity, including all aggregating
entities, is in compliance with the requirements of 17 CFR Part 420."
Signature of Authorized Person Named Above:

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

FOR IMMEDIATE RELEASE
June 04, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
9l-Day Bill
June 07, 2001
September 06, 2001
912795HN4

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.590%

Investment Rate 1/:

3.671%

Price:

99.093

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 37.93%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

SUBTOTAL

23,962,695
1,312,358
195,000

5,637,135

5,637,135
$

31,107,188

10,992,755
1,312,358
195,000
12,500,113 2/

25,470,053

Federal Reserve
TOTAL

Accepted

18,137,248

Median rate
3.570%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.535%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

= 25,470,053 / 12,500,113 = 2.04

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,082,679,000

http://www.publicdebt.treas.gov

PO-410

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
June 04, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

182 -Day Bill
June 07, 2001
December 06, 2001
912795GU9
3.520%

Investment Rate 1/:

3.634%

Price:

98.220

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 72.71%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive

20,736,578
1,375,073

5,140,426

Federal Reserve
$

27,252,077

9,124,986
1,375,073
10,500,059 2/

22,111,651

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

15,640,485

Median rate
3.480%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.450%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 22,111,651 / 10,500,059 = 2.11
NO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,123,274,000

http://www.publicdebt.treas.gov

PO-411

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the week ending June 1, 2001. As indicated in this
table, U.S. reserve assets totaled $65,278 million as of June 1,2001, up from $65,272 million as of
May 25,2001.

(in US millions)
Ma~

I. Official U.S. Reserve Assets

25: 2001
65,272

TOTAL

1. Foreign Currency Reserves
a. Securities

Euro
5,115

Yen
10,915

8,677

4,725

Of which, issuer headquartered in the U.S.

June 1: 2001
65,278
TOTAL

Euro

Yen

TOTAL

16,029
0

5,057

11,063

16,120
0

13,402
0
0

8,558

4,790

13,347
0
0

b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.iL Of which, banks located abroad
b iii. Banks headquartered outside the U.S.
b.iiL Ofwhich, banks located in the U.S.

2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock 3
5. Other ReserJe Assets

0
0

14,300

14,283

10,495

10,482

11,046

11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to·market values, and
deposits reflect carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar tenms at the official SDRldoliar exchange rate for the reporting date. The IMF data for May 25 are final. The.entries in the table above
for June 1 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S Treasury to the prior week's IMF data.

31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of April 30, 2001. The March 31, 2001 value was
$11,046 million.

PO-412

ublic schedules and official biographies, call our 24-hour fax line at (202) 622·2(J4{)

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
May 25.2001
1. Foreign currency loans and securities

June 1. 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Shori positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
May 25. 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquariered in the U. S.
3. c. With banks and other financial institutions
headquariered outside the U. S.
Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Shori positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

f4.

June 1, 2001

o
o

DEPARTMENT

'IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

Contact: FinCEN
(703) 905-3770

FOR IMMEDIATE RELEASE
June 6, 2001

MEDIA ADVISORY

The Treasury Department's Financial Crimes Enforcement Network (FinCEN) is releasing a
SAR Bulletin today to alert financial institutions of the possible abuse of phone card sales to
facilitate or conceal money laundering. The SAR Bulletin providing additional information about
this topic follows this release.

PO-413

For press releases, speeches, public schedules and official biographies, call our 24.Jwur fax line at (202) 622-2040
(

Bulletin
Information drawn from the Suspicious Activity Reporting System
Issue 3

June 2001

Suspicious Activity
Related to Phone
Card Businesses
A review of Suspicious Activity
Reports (SARs) filed with the Treasury
Department's Financial Crimes Enforcement Network (FinCEN) identified over 160 reports indicating suspicious financial activity related to businesses involved in phone card sales.
Some of the companies or businesses
involved in the reported activity offer
other services such as check cashing,
money orders, beepers, cellular phones,
faxes, lottery tickets, and travel tickets.
This activity has been observed by
financial institutions in fourteen states,
particularly in New York, New Jersey,
Texas, California, and Florida.
Businesses involved in phone card
sales routinely generate significant
legitimate cash flow. However, SAR
information reported by financial institutions characterizes the types ofproblematic transactions suggestive of
money laundering or other illicit financial
activity (large and unexplained cash
flow increases, transactions structured
to stay below CTR reporting requirements, etc.) associated with illegitimate
use ofthese businesses. Additionally,
law enforcement information indicates
that phone cards are being used as a
mechanism to launder funds.
The suspicious activity reported by

financial institutions that may reflect
illicit use of phone card businesses falls
into the following categories:

unusual deposit offunds into or
withdrawal of funds from bank
accounts maintained by
businesses engaged in phone
card activity;

cash deposits containing a large
number of$l 00 bills;

unexpectedly large transactions
occurring over relati vely brief
periods of time;

lack of, or improbable reasons
for financial activity;

frequent structured transactions
followed by immediate
withdrawals;

unusual outgoing wire transfers,
cashiers check purchases, check
cashing, and check and money
order deposits;

unexpected check cashing activity
occurring at businesses whose
principal activity is phone card
sales;

small retailers suddenly or
irregularly experiencing high
volumes of phone card sales, with
.
..
.
accompanymg major mcreases In
cash deposits.

The reported dollar volumes associated with these activities range from

l JnitRd States Department of the Treasury· Financial Crimes Enforcement Network

$300,000 to $50 million. In one instance,
intonnation from the SARs indicated that
over $50 million in deposits (checks,
cash, and money orders) were received in
one year by a communications company
involved in the sale of prepaid telephone
cards by convenience stores. In another
instance, a bank reported 370 cash
deposits by a prepaid phone card business totaling more than $3 million in
approximately three months, exceeding
the business's expected cash flow. In a
third case, a bank reported a homebased phone card business with more
than $500,000 deposited within a twomonth period. Another scenario involved
daily cash deposits of$9,000 from a
phone card business continuing over an
eight-month period. In some instances,
the use of phone cards and the connection with volume wholesale or retail sales
of phone cards were central to the
suspicious activity. In other cases, the
phone card connection appeared as an
adjunct to the main suspect activity.

What to do:
Financial institutions should alert key
personnel to the possible use of phone
card sales to facilitate and/or conceal
money laundering. Financial institutions
should be sensitive to fmancial transactions by phone card businesses, retail or
wholesale, when those businesses generate cash flows that are well beyond their
nonnal business activity. The specific
suspicious activity/methodology observed
that involves phone cards and/or businesses involved in phone card sales
should be described fully in the narrative
section of the SAR, including the involvement ofparticipants in foreign countries.
For additional infonnation, comments,
or questions concerning suspicious
phone-card-related transactions, please
call FinCEN's Office of Strategic Analysis
at (703) 905-3545.

James F. Sloan, Director

This "SAR Information Bulletin" is part of a series of overviews of trends and
patterns in money laundering derived from the SAR database. The SAR
Information Bulletin Series is designed to highlight activities or issues that
appear significant based on such factors as number of reports, number of
financial institutions filing similar reports, aggregate dollar values,
geographic distribution, and especially recurrent patterns of activity identified
in SAR narratives. In no cases will information relating to particular
institutions, businesses, or individuals be included in any Bulletin. Whether
the information in a particular Bulletin is of relevance to a particular financial
institution, of course, depends in many cases upon that institution's
operating realities. In all cases, comments or other feedback would be
welcome. Please forward comments on SAR Bulletins to the Financial Crimes
Enforcement Network at 703-905-3698 (fax) or email ora@fincen. treas. gov.
SAR Bulletin is a product orthe Financial Crimes Enforcement Network,
U.S. Department of the Treasury, 2070 Chain Bridge Road, Vienna VA 22182.
Please forward comments on SAR Bulletins to FinCEN at 703-905-3698 (fax) or email
ora@fincen.treas.gov. For more information about FinCEN's programs, visit the FinCEN web site
at http://www.treas.govlfinccn. General questions or comments regarding FinCEN publications
should be addressed to the Office of Communications, FinCEN, (703) 905-3773.
Information may also be faxed to (703) 905-3885.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR RELEASE AT 3 :00 PM
June 6, 2001

Contact: Peter Hollenbach
(202) 691-3502

PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR MAY 2001

The Bureau of the Public Debt announced activity for the month of May 2001, of securities within the Separate
Trading of Registered Interest and Principal of Securities program (STRIPS).
Dollar Amounts in Thousands
Principal Outstanding
(Eligible Securities)

$2,116,978,239

Held in Unstripped Form

$1,940,494,986

Held in Stripped Form

$176,483,253

Reconstituted in May

$18,619,633

The accompanying table gives a breakdown of STRIPS activity by individual loan description. The balances in
this table are subject to audit and subsequent revision. These monthly figures are included in Table V of the
Monthly Statement of The Public Debt, entitled "Holdings of Treasury Securities in Stripped Form."
The Strips Table along with the new Mo'nthly Statement of The Public Debt is available on Public Debt's
Internet site at: www.publicdebt.treas.gov.Awide range of information about the public debt and Treasury
securities is also available at the site.
000

PA-504

PO-414
www.publicdebt.treas.gov

TABLE V

Loan DescriptJon

Treasury Bonds
GUSIP.
912810DM7
DQ8
OR6
DU9
ON5
OPO
OS4
OT2
OV7
OW5
OX3
DYl
OZ8
EA2
EBO
EG8
E06
EE4
EFl
EG9
EH7
EJ3
EKO
EL8
EM6
EN4
EP9
EQ7
ES3
ETl
EV6
EW4
EX2
EYO
EZ7
FAl
FB9
FE3
FFO
FG8
FJ2
FM5
FP8

Interest Rate'
11·5/8
12
10·3/4
9·3/8
11·3/4
11·1/4
10·5/8
9·7/8
9·1/4
7·1/4
7·112
8·3/4
8·7/8
9·1/8
9
8-7/8
8-1/8
8-112
8·3/4
8-3/4
7·7/8
8-1/8
8-1/8
8
7·1/4
7-5/8
7·1/8
6·1/4
7·112
7·5/8
6·7/8
6
6·3/4
6·1/2
6·5/8
6·318
6·1/8
5·112
5·114
5·1/4
6-1/8
6·1/4
5-3/8

-HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM
Corpus
STRIP
CUSIP

912803 AB9
A05
AG8
AJ2
912800 AA7
912803 AA1
AG7
AE3
AFO
AH6
AK9
Al7
AM5
AN3
AP8
AQ6
AR4
AS2
ATO
AU7
AV5
AW3
AXl
AY9
A26
BAO
BB8
BG6
B04
BE2
BF9
BG7
BH5
BJ1
BK8
Bl6
BM4
BP7
BV4
BW2
CG6
CH4
CK7

Amount Outstanding

912820 BZ9
BV8
GL9
ON4
EK9
GA9

Total
Outstandinq

11/15/04
05/15/05
08/15/05
02115/06
11/15/14
02115/15
08/15/15
11115/15
02115/16
05115/16
11/15/16
05115/17
08115/17
05115/18
11/15/18
02115/19
08115/19
02115/20
05115/20
08115/20

02115121
05115121
08115121
11/15121
08115/22
11115/22
02115123
08115123
11/15124
02115125
08115/25
02115/26
08115/26
11115126
02115/27
08/15/27
11115127
08/15/28
11/15128
02115129
08115/29
05115/30
02115131

07/15/02
01115/07
01115/08
01115/09
01115/10
01/15/11

Totallnflatlon·lndexed Notes
Treasury Inflatlon·lndexed Bonds
GUSIP
Interest Rate:
912810 F05
3-5/8
FH6
3·7/8
Total Inflation· Indexed Bonds ..

912803 BN2
GF8

Thousands

Maturity Date

Total Treasury Bonds ..
Treasury Inflation·lndexed Notes
CUSIP.
Series
Interest Rate:
9128273A8
J
3·5/8
2M3
A
3·3/8
3T7
A
3·5/8
4Y5
A
3·7/8
5W8
A
4-1/4
6R8
A
3·112

MAY 31 2001

04/15128
04115/29

Portion Held In
UnstriDDed Form

Portion Held In
Stripped Form

Reconstituted
This Month

8,301,806
4,260,758
9,269,713
4,755,916
6,005,584
11,325,799
5,060,916
5,856,859
5,886,754
18,823,551
18,824,448
16,286,669
12,339,358
7,072,439
7,614,470
15,306,798
19,280,932
9,888,268
8,197,183
18,166,306
10,247,573
10,473,788
10,173,482
31,177,194
10,237,790
7,933,626
16,899,061
22,659,044
9,704,162
10,634,170
11,695,207
12,837,916
10,018,418
11,168,177
10,210,971
10,015,756
22,046,339
11,776,201
10,947,052
11,350,341
11,178,580
17,043,162
10,886,993

4,732,206
1,912,108
5,800,213
4,627,916
2,067,184
6,680,459
3,453,583
3,072,249
5,403,964
18,450,023
17,525,488
8,966,109
9,566,557
2,950,039
3,562,870
9,666,298
18,135,292
8,192.058
3,488,383
8,509,586
9,212,373
5,989,348
8,791,374
12,755,954
9,322,991
4,197,376
10,368,661
19,163,428
3,338,722
3,775,709
7,610,400
11,419,016
7,499,818
6,719,477
6,927,771
8,063,756
13,999,539
11,183,001
10,456,352
10,986,341
11,057,180
16,954,178
10,886,993

3,569,600
2,348,650
3,469,500
128,000
3,938,400
4,645,340
1,607,333
2,784,610
482,790
373,528
1,298,960
7,320,560
2,772,801
4,122,400
4,051,600
5,640,500
1,145,640
1,696,210
4,708,800
9,656,720
1,035,200
4,484,440
1,382,108
18,421,240
914,799
3,736,250
6,530,400
3,495,616
6,365,440
6,858,461
4,084,807
1,418,900
2,518,600
4,448,700
3,283,200
1,952,000
8,046,800
593,200
490,700
364,000
121,400
88,984
0

123,200
12,600
50,400
27,136
237,600
1,058,920
362,120
166,400
181,600
144,800
381,600
659,880
357,200
235,200
700,400
707,400
458,520
602,000
418,560
751,680
51,200
644,480
535,860
2,542,500
2,400
699,200
643,200
341,504
705,280
302,400
309,593
110,700
279,800
521,200
321,600
204,800
1,990,400
24,000
28,000
2,400
5,600
0
0

513,839,530

367,442,343

146,397,187

17,903,333

18,500,773
17,523,494
18,334,172
17,084,104
11,855,312
6,074,968

18,500,773
17,523,494
18,225,115
17,084,104
11,855,312
6,074,968

0
0
109,057
0
0
0

0
0
0
0
0
0

89,372,825

89,263,768

109,057

18,309,811
21,136,968

18,309,811
21,003,000

0
133,968

0
0

39,446,779

39,312,811

133,968

TABLE V - HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM MAY 31

Corpus

Amount Outstanding In Thousands

Maturity Date

STRIP
CUSIP

Loan Description

.M. •- ' . .
Reconsbtuted

Total
Outstandlnn

Portion Held In

Unstrlpped Form

portion Held

ThIS Month

Stripped Form

Treasury Notes

CUSIP
912827 Y48
5J7
Y71
5L2
B92
Z39
SP3
ZS4
501
ZB8
SR9
025
2C5
2E1
2G6
5X6
2L5
6AS
2P6
6B3
2S0
6Cl
F49
2Wl
6E7
2Y7
6F4
3C4
6HO
G55
3G5
6K3
3J9
6L 1
3L4
303
6P2
359
600
3V2
656
J78
3Z3
6Ul
4B5
6V9
401
6W7
4H2
6Y3
4K5
L83
4N9
4U3
N81

Series
K

Z
L
AB
C
M
AC
N
AD
P
AE
0
0
R
C
R
0
S
E
T
F
U
A
G

SA6

P89
5F5
088
5MO
R87
557
S86
T85
609
U83
V82
6N7
W81
X80
6X5
Y55
Z62
2JO
2U5
3EO
3XS
4F6
4Vl
5G3
5N8
5Z1
6J6
614
Total Treasury Notes
Grand Total

Interest Rate
06130/01
06130/01
07131/01
07131/01
08115/01
08131/01
08131/01
09130/01
09130/01
10131/01

4-1/4
5-7/8

912820 FE2
DX2
FF9
OYO
BB2
FG7
EB9
FH5
EC7
FJl
E05
BCO
EG8
EJ2
FK8
EL7
FL6
EN3
FM4
EP8
FN2
E06
B08
FP7
ES2
F05
ETO
FR3
EU7
BE6
FSl
FU6
CC9
FV4
CES
CH8
FY8
CKl
FZ5
CN5
GB7
BF3
C54
G03
CU9
GEl
CW5
GF8
OA2
GH4
OC8
BGl
OE4
OJ3
BH9

4-3/4

007

7-1/4

BJ5
OU8
BK2
0Z7
BLO
EE3
BM8
BN6
ER4
BPl
B09
FXO
BR7
BS5
GG6
BT3
BUO
BW6
BX4
CA3
CQ3
CYl
OKO
OV6
EAl
EMS

02115/04
05115/04
05115/04
08115/04
08115/04
11/15/04

6-5/8
5-3/4
6-5/8
5-112
7-7/8
6-112
5-112
6-3/8
5-5/8
6-1/4
5-7/8
7-112
5-7/8
6-1/8
6-1/4
6-3/8
6-1/4
6-1/2

6-518
6-112

6-518
6-3/8
7-112
6-1/2

6-5/8

H
W
K
X
B
L
Y
M
Z
N
P
AC
0
AD
C
L
A
0
M
E
N
F
P
G
0
H
B
J
K
A
E
B
F
C
G
0
H
A
B
E
C
0

6-114

F
A
B
E

C
0
B
C
0
B
C
0
B
C
B
C
B

6-3/8
6
6-1/4
6-3/8
6-1/4
6-1/8
5-7/8

6
5-3/4
5-3/4
5-S/8
5-5/8
5-1/8
5-1/2

4-3/4
6-114
5-112
4-5/8
5-112
4-1/4
5-3/4

4
5-112
4-1/4

5-3/8
5-3/4

5-1/4

5-1/4
7-1/4

6
7-718
5-7/8
7-112
8-112
6-3/4
6-112
5-7/8
5-3/4
5-5/8
6-7/8

4-5/8
7
6-112

6-114
6-5/8
6-1/8
5-112

5-5/8
4-3/4
5-112

6
6-112
5-3/4

FTg
GC5

10131/01
11115/01
11130/01
12131/01
01131102
01131/02
02128102
02128/02
03131102
03131/02
04130/02
04130102
05115/02
05/31/02
05131/02
06130/02
06130/02
07131/02

07131/02
08115/02
08131/02
08131/02
09130/02
09130/02
10131/02
11130/02
11130/02
12131/02
12131/02
01131/03
01131/03
02115/03

02128/03
02128/03
03131/03
03131/03
04130/03
04130103
05131/03
05131/03
06130103
08115/03
08115/03
11115/03

02115/04

11/15/04
02115/05

05/15/05
05115/05
08115/05
11115/05
11115/05
02115/06
05115/06
05115/06
07/15106
10115/06

02115107
05115/07
08115107
02115/08
05115/08
11115/08
05115/09
08/15/09
02115/10
08115/10
02115/11

14,282,240
19,001,309
14,136,833
20,541,318
12,339,185
14,000,224
20,118,595
14,S18,514
18,797,828
14,639,843
19,196,002
24,226,102
33,504,627
31,166,321
13,453,346
19,381,251
13,799,902
16,563,375
14,301,310
17,237,943
14,474,673
17,390,900
11,714,397
13,503,890
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
23,859,015
12,731,742
15,072,214
12,806,814
15,144,335
26,593,892
12,120,580
15,058,528
12,052,433
14,822,027
13,100,640
15,452,604
23,562,691
13,670,354
14,685,095
14,172,892
14,674,853
12,573,248
13,338,475
13,132,243
13,334,228
13,126,779
28,011,028
19,852,263
18,625,785
12,955,077
17,823,228
14,440,372
18,925,383
13,346,467
18,089,806
14,373,760
32,658,145
13,834,754
14,739,504
28,562,370
15,002,580
15,209,920
28,062,797
15,513,587
16,015,475
16,180,509
22,740,446
22,459,675
13,103,678
13,958,186
25,636,803
13,583,412
27,190,961
25,083,125
14,794,790
27,399,894
23,355,709
22,437,594
23,436,329

14,282,240
18,995,709
14,136,833
20083,318
7,250,565
13,986,624
20,118,S95
14.480,114
18,297,028
14,639,843
19,194,402
19,054,742
33.499,827
31,083,121
13,398,338
19,381,251
13,799,902
16,530,875
14,278,910
17,235,543
14,474,673
17,390,900
7,684,717
13,503,890
14,849,423
13,OS8,694
14,318,609
12,231,057
15,057,900
20,025,553
12,731,742
15,072,214
12,768,414
15,144,335
26,534,692
11,831,280
14,990,688
11,667,793
14,822,027
13,100,640
15,4S2,604
22,344,779
13,626,354
14,685,095
14,172,092
14,674,853
12,573,248
13,338,475
13,103,843
13,334,228
13,125,179
26,671,328
19,680,263
17,607,285
12,416,477
17,823,228
13,794,772
18,925,383
11,842,467
18,089,806
14,368,960
32,658,145
13,223,394
14,739,104
28,562,370
15,002,580
14,836,720
28,024,397
15,492,107
15627,795
16,180,509
22,740,446
22459,675
12,967,494
13,671,111
25,235,203
13,568,912
27,082,601
24.963,925
14280,490
27,305,094
23,342,909
22,436,994
23436,329

1,474,319,105
2116,978,239

0
5,600
0
458,000
5,068,600
13,600
0
38,400
500,800
0
1,600
5,171,360
4,800
83,200
55,008
0
0
32,500
22,400
2,400
0
0
4,029,680
0
22,400
0
2,000
0
0
3,833,462
0
0
38,400
0
59,200
289,300
67,840
384,640
0
0
0
1,217,912
44,000
0
800
0
0
0
28,400
0
1,600
1,339,700
172,000
1,018,500
538,600

0
0
0
0
28,000
0
0
0
0
0
0
45,760
0
0
0
0
0
0
0
0
0
0
67,840
0
0
0
0
0
0
24,080
0
0
0
0
0
4,000
0
0
0
0
0
20,000
0
0
0
0
0
0
0
0

0
24,000

1,504,000

1,500
9,200
0
800
0
20,000

0
845,600

0
0

4,800
0
611,360
400
0
0
373,200
38,400
21,480
387,680
0
0
0
136,184
287,075
401,600
14,500
108,360
119,200
514,300
94,800
12,800
600
0

0
0
12,640
0
0
0
40,000
0
1,000
960
0
0
0
0
41,600
43,200
44,600
60,920
0
43,600
3,000
179,600
0
0

1,444,476,064

29,843,041

716,300

1 940494,986

176,483,253

18619,633

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

Contact: Tara Bradshaw
(202) 622-2014

FOR IMMEDIATE RELEASE
June 7, 2001

STATE-BY-STATE BREAKDOWN OF
ADVANCE PAYMENT CHECKS
The table attached estimates the number of advance payment checks, and their total dollar
amount, that will go to taxpayers in each state. The estimates are based on 1999 returns, while
the actual checks will be based on 2000 returns.

-30-

PO-41S

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Taxpayers Receiving a Check in 2001
Number of
Checks
Amount
(000)
($ millions)

Number of
Checks
Amount
(000)
($ millions)

United States

91,600

39,000

Alabama
Alaska
Arizona
Arkansas
California

1,265
226
1,525
730
10,589

545
96
650
313
4,453

Missouri
North Carolina
North Dakota
Nebraska
Nevada

1,793
2,550
207
574
695

771
1,099
89
248
292

Colorado
Connecticut
Delaware
Florida
Georgia

1,525
1,270
278
5,103
2,515

652
552
119
2,118
1,078

New Hampshire
New Jersey
New Mexico
New York
Ohio

467
3,025
507
6,074
4,058

204
1,309
212
2,528
1,660

Hawaii
Idaho
lllinois
Indiana
Iowa

409
380
4,196
2,027
974

172
167
1,804
885
426

Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina

972
1,121
4,133
354
1,219

418
482
1,772
149
516

Kansas
Kentucky
Louisiana
Maine
Maryland

877
1,184
1,199
424
1,912

385
509
510
181
824

South Dakota
Tennessee
Texas
Utah
Vermont

238
1,760
6,061
656
212

102
755
2,583
292
90

Massachusetts
Michigan
Minnesota
Montana
Mississippi

2,357
3,340
1,772
273
735

997
1,451
772
115
310

Virginia
Washington
Wisconsin
West Virginia
Wyoming

2,449
2,062
1,900
497
161

1,058
895
826
213
70

206
565

75
206

District of Columbia
Other Areas

Notes
This table shows estimates of the number of taxpayers who will receive a check in 200 I based on their return filed for 2000, and the
total dollar amount of the checks they will receive. The estimates for each state are based on tabulations from all individual income
tax returns filed and processed through the IRS Individual Master File (IMF) during calendar year 2000. Most returns filed in 2000
were for tax year 1999.
Classification by state was based on the address used on the return. Usually this address IS the taxpayer's home address. However,
some taxpayers may have used the address ofa tax attorney or accountant, or a place of business, and that address could be in a
different state than the taxpayer's home.

DEPARTMENT

THE

TREASURY

NEWS

'IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

Contact: Tara Bradshaw
(202) 622-2014

FOR IMMEDIATE RELEASE
June 7, 2001

President Bush's Tax Relief Plan Will Benefit
Millions of American Taxpayers
Effects Of Major Individual Income TeLY: Relief Provisions In "Economic Growth And Tax
ReliefReconciliation Act Of 2001"

The "Economic Growth and Tax Relief Reconciliation Act of 200 1" will provide
significant income tax relief to millions of taxpayers. A broad range of taxpayers
will benefit from the tax relief provisions contained in the Act, including:
• 43 million married couples whose taxes, on average, will be lowered by $1,730.
• 38 million families with children who will receive an average tax cut of $1 ,463
to help pay for education, childcare, and other expenses.
• 11 million single mothers with children who will be able to keep, on average,
$780 more of their income to meet their family's pressing needs.
• 13 million seniors whose taxes will be reduced, on average, by $924.
• 3.9 million individuals and families who will have their income tax liability
completely eliminated by the Act.

The estimates offully phased-in law are based on 2011 law at projected 2002 income and population levels.
Estimates exclude tax benefits expiring before 2010 and assume no sunset.

-30-

PO-416

Fur press releases, speeches, public schedules and official biographies, call our 24-hl[)ur fax line at (202) 622-2040
.dll.

DEPARTMENT

THE

TREASURY

NEWS

'IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

Contact: Tara Bradshaw
(202) 622-2960

FOR IMMEDIATE RELEASE
June 7, 2001

O'NEILL STATEMENT ON THE TAX RELIEF BILL SIGNING
Treasury Secretary PaulO 'Neill statement an the signing afthe tax relief bill:
"President Bush today made good on a promise of tax relief for everyone who pays
income taxes. With a stroke of his pen, the President has shown the American people that great
things can happen when both parties work together and unite around principle.
"In the next few months income tax payers will receive the first installment of tax relief,
in the form of a check. The bill the President signed today provides for significant and long-term
tax reductions for all income tax payers. The average family with children will pay $1,463 less
in federal income taxes when the entire tax relief package is effective. Income tax rates will fall,
death will cease to be a taxable event, the child credit will increase, the marriage penalty will be
reduced, and retirement and education savings options will be expanded.
"President Bush, together with Congress overcame defeatist deadlock and delivered to
the nation tax relief that is fair, family friendly, fiscally sound, and a second wind for our
economy.
"This tax cut is a promise delivered. It will have a real, positive effect on millions of
Americans in all walks and stages of life."

-30-

PO-417

Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

DEPARTMENT

IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

FOR IMMEDIATE RELEASE
Friday, June 1, 2001

Contact Tony Fratto
at 202-622-2960.

DR. JOHN B. TAYLOR SWORN IN AS TREASURY UNDER SECRETARY FOR
INTERNATIONAL AFFAIRS

John B. Taylor was sworn in this morning as Treasury Under Secretary for International
Affairs by Secretary Paul O'Neill. The U.S. Senate voted to confirm Taylor on Saturday, May 27.
As Under Secretary for International Affairs, Taylor serves as the principal advisor to the
Secretary on a wide range of international issues. He will lead development of policies and
guidance of the Department's activities in the areas of international financial, economic and
monetary affairs, trade and investment policy, international debt, and U.S. participation in
international financial institutions.
Taylor will also help to coordinate United States economic policies with finance ministries
of the G-7 industrial nations.
Taylor, a Stanford University economist, is a globally recognized expert on international
monetary policy. He previously served as a member of the Council of Economic Advisers under
President George H.W. Bush, and also was a delegate to the Uruguay Round of trade
negotiations.
Taylor was born on December 8, 1946 in Yonkers, New York. He graduated from
Princeton University in 1968 and received a doctorate in economics from Stanford University in
1973. He is married and has two children.

PO-41S

For press releases, speeches, public schedules and official biographies, mll our 24-hour fax line at (202) 622-2040
<

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

lDtSARGOED 'tm'r~t. 2 :30 P .K.
JW:I.e 7, 2001

CONTA~:

Office of Financing
2021691.-3550

OFFERS

~3-WEEX

AND 26-WUK BILLS

~ 'l%easury will auction t:wo series of 'rreasurY :bills totaling
approximately $24,000 milliQ:l to refund $3.9, 8ll milliou of publicly held
billa maturing .JUne 1.4, 2001., and to pay down about $l.S,811 million. 'rhe
amount of maturing publicly held bills includes the 14-day cash manageme~t
bi~1s issued May 31., 2001., in the amount of $20,00l million.

In addit~cn to the public hol~gs~ Federal ~eserve Banks for their own
acecunes hol.d $9, 8~7 million of the matur3.ng bills, which may be refunded at
the ~ghest discoune rate of accepted competitive t~rs. Amcunts awarded
to these ac:CQU%lts will be in addition to the offering amount.
Up to $l,OOO million in ~compet:i.tive bias from Foreign ~ International Monetary ~thorit:y (FZMA) account:s bic!ding through the Fede.:al
Resezve Ba.nk of New' York will be inc:luded within the offering amount of each
aUdcio=.. ':rhese noncompetitive ~ids will have a. limit of $200 million per
acccunt: and will be a.ccepted in t.he order of sma.J.lest to largest, up to the
aggregat:e awa:rcl limit of $l., 000 million.

T%'ea.$U%YD:i.rect customers have requested that we reinvest their ma.turing
approx5mate~y $985 mll.iQIl into the :L3-week b:ill. a::I.d. $709 :If:i.l.liou
into the 26~ek bill.

holdings of"

The all.ocation percentage applied to bids awarded at tbe highest discount
rate wil.l be ::OUDded up to the next hundredth of a. whole percentage point,
e.9'., 17· .13%.
This offering of 'rrea.su.ry sec:u.:ri ties is gove.rued by the terms and. conditions set £orth in the Unifo:m offering Circular for the Sa.~e aDd Zssue of
Harketabl.e Book-Ent:ry Treasury Bi1ls,. !lotes, al:Id Bonds (31 e n Part 356, as
ameucied) •

:Detail. iabout each
offer~

PO-419

the new securities a.e given

the attac::hed

high1ights.
000

For press Tlluases. sp~ecJus, plthlit: schedules anti offICial biographies, call our 24-hour fax line at (202) 622-2040

HIGHLIGHTS OP TREASURY OFFER7NGS OF BILLS
TO BE ISSUED JUNE 14. 3001

June 7, 2001
Offering Amount •••••••••••••••••••••••• $12,500 million

$11,500 million

Publio OfferinQ ••••••••••••••• ·••••.••.• Offering amount. less the amount awarded for PXNA accounts
Description of Offering:
Te~ and type of security ••••••••••••••
CUSIP number....... • • . • . • . . • • . • . . • . • • •.
Auction date •••••••••••••••••••••••••••
Xssue date •••••••••••••••••••••••••••••
Maturity date ••••••••••••••••.•••••••.•
Original issue date •••••••••••••••••..•
Currently outstanding •••.••••••••••••.•
Minimum bid amount and multiples ••.••••

91-day bill
912795 GR ,;
iJ'une 11, 2001

Ju'ne 14, 2001
September 13, 2001
March 15, 2001
$13,434 million
$1,000

182-day bill
912795 HX 2
June 11, 2001
June 14, 2001
December 13, 2001
June 14, 2001
$1,000

The following rules apply to all securities mentioned aboves
Submission of Bidss
NORcompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and 7nternational Monetar,y Authority (FIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size from smallest to largest
with no more tha~ $200 million awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FlMA accounts will not eKceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate aw~rd
total to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be eKceeded, each will be prorated to avoid exceeding the limit.
Competitive biost
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%,
7.105%.

(2) Net long position for each bidder must be reported when the sum of the total bid amount, at all
discoont rates, and the net long position is $1 billion or greater.
(3) Net long position must be dete~ined &8 of one half-hour prior to the closing time for receipt of
competitIve ·tender,.
Max~mam Recognized Bid at & Single Rate •••• 35% of public offering
Maximwn Awapd ••••••••••••••••••••••••.••••• 35% of public offering
Receipt of Tenderst
.
Noncompetitive tenders •.• Prlor to 12:00 noon eastern daylight saving time on auction day
Competitive tend.rs •••.•• Prior to 1:00 p.m. eastern daylight saving time on auction day
p~ent Terms:
By charge to A funds ~acourtt at a Federal Reserve Bank on issue date, o~ p~ent of full
par amount with tend~r. Wreasu~DirBct customers can use the Pay Direct feature which authorizes a charge
to th~ir accou~t of record at their financial in8tit~tion on issue date.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
June 11, 2001

CONTACT:

Office of Financing
202 -691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:

91-Day Bill
June 14, 2001
September 13, 2001
912795GR6

High Rate:

3.510%

Investment Rate 1/:

3.590%

Price:

99.113

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 14.80%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

24,051,072
1,297,857
210,000

12,500,050 2/

25,558,929

SUBTOTAL

TOTAL

4,748,450

Federal Reserve
$

30,307,379

10,992,193
1,297,857
210,000

17,248,500

Median rate
3.490%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.460%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

25,558,929 / 12,500,050

= 2.04

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,069,260,000

http://www.publicdebt.treas.gov

PC-420

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

182 -Day Bill
June 14, 2001
December 13, 2001
912795HX2
3.510%

Investment Rate 1/:

3.622%

Price:

98.226

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
7.40%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

25,545,258
982,222
25,000

5,118,541

Federal Reserve
$

31,671,021

10,492,984
982,222
25,000
11,500,206 2/

26,552,480

SUBTOTAL

TOTAL

Accepted

Tendered

16,618,747

Median rate
3.490%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.440%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 26,552,480 / 11,500,206 = 2.31
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $780,614,000

http://www.publicdebt.treas.gov

PO-421

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

u.s. International Reserve Position
The Treasun' Department toda\' released C.S. resen'e assets data for the week endmgJune 8. .2001. .\~ mrucated m
table. CS resen'e assets totaled 565.060 million as of June 8. .2001. down from S65 ..2""9 million a, of
1une 1. .2001.

thl~

(in US millions)

I. Official U.S. Reserve Assets

1. Foreign Currency Reserves'
a. Securities
Of which. issuer headquartered in the U. S.
b. Total deposits with:
b.i. Other central banks and SIS
b.ii. Banks headquartered in the U.S.
b.iL Of which. banks located abroad

b.iii. Sanks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.

June 812001
65,060

June 11 2001
65,279

TOTAL

5.057

11.063

16.120
0

5.090

Yen
10.929

8.558

4,790

13.347
0
0
0
0

8.619

4.731

Euro

Yen

Euro

TOTAL
16.018
0

13.350
0
0
0
0

2. IMF Reserve Position 2

14.285

14.216

3. Special Drawing Rights (SDRs) 2

10.481

10.430

4. Gold Stock

11.046

5. Other Reserve Assets

21 The items, "2. IMF Reserve Position" and "3. SpeCial DraWing Rights (SDRs)," are based on data prOVided by the IMF and are valued in
dollar terms at the official SDRIdollar exchange rate for the reporting date. The IMF data for June 1 are final. The entnes In the table above
for June 8 (shown In Italics) reflect any necessary adjustments, including revaluation, by the US Treasury to the pnor week's IMF data.
31 Gold stock IS valued monthly at $42.2221 per fine troy ounce Values shown are as of Apnl 30. 2001. The March 31. 2001 value was
$11,046 million.

PO-422

Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S Government Prlntlnq Olflce 1998· 619·559

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
June 1. 2001
1. Foreign currency loans and securities

June 8. 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
June 1. 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
~. Foreign currency securities with embedded options
3. Undrawn. unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
14. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

June 8.2001

o
o

DEPARTMENT

'IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

EMBARGOED UNTIL 2:00 P.M.
Tuesday. June 12,2001

Contact: Office of Public Affairs
(202) 622-2960

STATEl\1ENT BY TREASURY DEPUTY ASSISTANT SECRETARY
WILLIAM E. SCHUERCH TO THE
SUBCOl\lMITTEE ON INTERNATIONAL MONETARY POLICY AND TRADE
OF THE HOUSE FINANCIAL SERVICES COMMITTEE
June 12,2001

Chainnan Bereuter, Ranking Member Sanders, members of the Subcommittee, I thank you for
the opportunity to testify before you on the authorization requests requiring action this year.
Treasury's appropriations request for international programs this year totals $1.4 billion: $1.2
billion in scheduled commitments to the multilateral development banks (MDBs) and $.2 billion
for debt reduction. The request reflects a substantial reduction - from $1.9 billion in FY 1996 -in U.S. commitments to the MDBs as a result of international negotiations in recent years.
Today's testimony focuses on the three authorization requests requiring action this year: $412
million over 4 years (2001-2004) for the U.S. contribution to the seventh replenishment of the
Asian Development Fund (AsDF-8); $30 million over 2 years (2001-2002) for the U.S.
contribution to the fifth replenishment of the International Fund for Agricultural Development
(IF AD-V); and an additional contribution of up to $165 million to complete the U.S. pledge to
the HIPC Trust Fund.
We request these authorizations because they represent commitments negotiated by the U.S. that
should be adhered to and that support U.S. interests. As Secretary O'Neill has said, the
Administration is working hard to ensure that hard-earned U.S. taxpayer dollars go to MDBs that
are more focused on the core mandate of improving living standards around the world through
increased productivity and that are held more rigorously accountable through results-based
perfonnance indicators. We also believe that the MDBs can improve their coordination. More
work is needed to bring greater consistency where more than one institution is operating in a
particular country and in sharing lessons learned and best-practice policies and procedures. Now
that the Treasury Department's Under Secretary for International Affairs, John Taylor, has been
confinned, he will be working closely with the Secretary to develop, implement, and coordinate
the Secretary's International Financial Institutions refonn agenda.

PO-423

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s

Government Prlntlnq Office 1998· 619-559

Asian Development Fund (AsDF-8)
In 2000, the United States pledged $412 million over four years toward the S5.6 billion seventh
replenishment of the AsDF, the concessionallending window that provides assistance and policy
advice to the 29 poorest countries in the region. Over the next four years, the AsDF is expected
to lend more than $13 for every $1 contributed by the U.S. Several U.S. objectives at that time
were achieved as part oflast year's replenishment negotiation, most notably:
•

Agreement to put in place for the first time a performance-based resource allocation system,
including explicit consideration of good governance and efforts to combat corruption.

•

Increased assistance for poverty reduction to about 40% of lending, with heavy emphasis on
education.

•

Increased transparency and participation by civil society in the preparation of country lending
strategies.

•

Improved systems for measuring results, including upgrading the evaluation office and
establishing a Board committee on development effectiveness.

•

Conclusion of a Memorandum of Understanding with the World Bank to enhance
coordination and better delineate responsibilities in the region.

Completion of the U.S. commitment is vital to maintain strong U.S. leadership in shaping AsDF
policies and operations.
International Fund for Agricultural Development (IF AD-V)
In 2000, at the request of U.S. Agency for International Development, (USAID) Treasury
assumed lead agency responsibility for IF AD and the U.S. pledged $30 million over two years
toward IF AD's fifth replenishment. Nearly 75% of the world's 1.2 billion poorest people live in
rural areas, largely as small-scale or subsistence farmers. IFAD's specific mandate to increase
the productivity and incomes of these target farmers is consistent with the Administration's
international assistance priorities.
Several U.S. objectives at that time were achieved under last year's IFAD-V replenishment
negotiation, including:
•

Greater consideration of country governance and domestic policy criteria in assistance
strategies and allocation decisions.

•

Expanded co-financing to cover at least 30% ofIF AD's annual commitment level to leverage
increased resources for poverty reduction.

•

IF AD's full participation in HIPC.

HIPC Debt Relief Trust Fund
Important progress was made last year when Congress authorized $435 million in U.S.
contributions to the HIPC Trust Fund, of which $360 million has been appropriated thus far. The
FY2002 authorization request is for the final $165 million of the U.S. pledge of $600 million to
the HIPC Trust Fund. The Trust Fund helps regional development banks and other multilateral
institutions meet the costs of providing debt reduction to heavily indebted poor countries
committed to economic, social and governance reforms. Twenty-three countries have begun
receiving debt relief under the enhanced HIPC program, amounting to $34 billion in nominal
terms. On top of this, the United States and many other creditor countries are canceling Official
Development Assistance (ODA) debt and also reducing commercial debt beyond the level
required under the HIPC framework. As a consequence, the debt service ratios of these countries
will be significantly lower than previously, and indeed significantly lower than the average for
other countries with similar per capita income levels.
The success of the HIPC Initiative ultimately depends on country efforts to put in place sound
policies to use resources effectively, strengthen productivity and growth, and invest in the social
sectors, thereby reducing poverty. I understand that several members of Congress as well as
non-governmental organizations (NGOs) are advocating various proposals to deepen the debt
relief program, including writing off entirely the debt of the current eligible HIPCs. The costs
of these proposals are tremendous - more than the IFIs themselves can bear without taking
resources away from good performing countries or accelerating the need for significant new
capital to finance their lending activities.
Secretary O'Neill has stated that more experience should be gained under the existing program
given its relative nascent stage - only 2 countries (Uganda and Bolivia) have reached completion
point - before embarking on a new program. The current program goes well beyond earlier
efforts and is aimed at putting these countries on a sustainable debt profile. It was not designed
as a panacea for the myriad of challenges HIPC countries face, nor as a guarantee that countries
will not fall back into unsustainable debt. Rather, it was envisaged as one element of a much
broader development agenda that includes trade, investment, and economic assistance, coupled
with careful consideration of the appropriate lending instruments to facilitate effective,
accountable reform. Before considering additional debt proposals, we need to consider where
scarce resources of the U.S. and of the IFIs best leverage improving the domestic conditions
necessary for sustained productivity growth and increased living standards. To address the
vulnerable situation in most HIPCs even after debt relief, Secretary O'Neill has made it clear that
the Administration is extremely interested in the increased use of grants for performing
countries.

MDB Involvement in Africa
The reform agenda that confronts Africa remains formidable indeed. Economic growth in SubSaharan Africa continues to lag behind that of other regions in the world due to such factors as

insecurity and warfare, poor governance, the plague of infectious diseases (especially
HIV / AIDS), unfavorable trends in commodity prices, and natural disasters.
But the overall economic picture in sub-Saharan Africa is not all bleak -- average growth in the
region was an estimated 3.3 percent in 2000 and is expected to rise to 4.3 percent in 2001. This
compares to estimated average growth of 2.6 percent in the ten years 1992-2001. The main
reason for the improvement appears to have been the continuing pattern of reform in many
countries, resulting in more flexible exchange rates, better fiscal control, greater economic
stability, more open and transparent trade and investment regimes, and further reduction in the
direct economic role of governments. There are still significant challenges, but Secretary
O'Neill has made clear the Administration's commitment to facilitating growth and development
in Africa. Indeed, this commitment is evidenced by the Secretary of State's visit last month and
the recent announcement by President Bush that he will convene the first US-Africa Economic
Forum in Washington this coming October. Important events such as President Bush's pledge of
$200 million as a U.S. contribution to the new global fund to fight HIV/ AIDS, malaria and
tuberculosis and the commemoration of the passage of the Africa Growth and Opportunity Act
are equally important demonstrations of our solid partnership with Africa.
U.S. participation in the MDBs is another important pillar of our commitment to improving the
living standards of African people. Each year, approximately $4 billion is applied to African
programs by the World Bank Group and the African Development Bank Group. The U.S. has a
leadership role in both institutions on shaping their operations and directing the resources to
achieve higher growth and reduced poverty in the region. Secretary O'Neill has called for
improving living standards via increased productivity as the primary objective of our work
through the MDBs, and this surely will be a mainstay in our evolving thinking on a strategy for
Africa.
The MDBs, therefore, need to focus their operations on a core set of activities that reflect their
comparative advantage and are capable of yielding high-impact productivity gains. While
successful poverty reduction requires a broad range of complementary actions, without
productivity-led economic growth, the benefits from increased aid will be welcome but also
incomplete and inevitably unsustainable. We recognize that there are substantial challenges. We
believe also, however, that by focusing on key priorities that hinder productivity, MDB
assistance can have a greater impact. This is not to say that poverty can be wiped out simply by
encouraging growth and productivity or by increasing labor and capital. Other policy and
program changes are necessary to enable the poor to fully enjoy increased economic
opportunities. The widespread provision of social services - especially education -- is, for
example, a necessary complement to growth. Healthier, better-educated people are more
productive and they are better able to take advantage of the new economic opportunities
(including new technologies) opened by economic growth. In that respect, continued support for
programs that fight infectious diseases, particularly HIV / AIDS, tuberculosis and malaria, is
important.
We are currently negotiating replenishments of IDA and the African Development Fund - the
two largest sources of multilateral concessional assistance to Africa. Now that Under Secretary
Taylor is confirmed, he will be striving to achieve the broad goals already laid out by the
Secretary, in addition to more detailed policy proposals that are currently being developed and

evolving. We will be collaborating with our colleagues at the other agencies in developing an
effective approach for the continent. I see today's testimony as an opportunity to hear your
views on this subject, provide any background information that I can, and stress the
Administration's support for the authorization requests before this Subcommittee.

DEPARTMENT

IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

For Release at 12:00 noon
June 14, IDOl
STATEMENT OF
THE OFFICE OF TAX POLICY
DEPARTMENT OF THE TREASURY
BEFORE THE SUBCOMMITTEE ON SELECT REVENUE MEASURES
COMMITTEE ON WAYS AND MEANS
Mr Chainnan, Mr. McNulty, and Members of the Subcommittee:

The Policy is a long-tenn, comprehensive strategy. Our energy crisis has been years in the
making, and will take years to put fully behind us.
The Policy will advance new, environmentally friendly technologies to increase energy
supplies and encourage cleaner, more efficient energy use.
The Policy seeks to raise the living standards of the American people, recognizing that to
do so our country must fully integrate its energy, environmental, and economic policies.
In that context, the Office of Tax Policy appreciates the opportunity to present testimony
on tax incentives to promote energy conservation and increase domestic production of oil and
gas.
Energy Efficiency and Alternative Energy Sources
Incentives for energy efficiency and alternative energy sources are essential elements of
national energy policy. The continuing strength of our economy over the past two years, despite
oil price rises, underscores the dramatic improvements in energy efficiency we have achieved over
the past quarter century, as well as the changing economy. While past oil shortages have taken a

P0-424
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

-2significant toll on the u.s. economy, the recent increases in oil prices have not affected the
economy much. Increased energy efficiency in cars, homes, and manufacturing has helped
insulate the economy from these short-term market fluctuations. In 1974, we consumed IS
barrels of oil for every $10,000 of gross domestic product. Today we consume only 8 barrels of
oil for the same amount (in constant dollars) of economic output.

Current law tax incentives for energy efficiency and alternative fuels
Tax incentives currently provide an important element of support for energy-efficiency
improvements and increased use of renewable and alternative fuels. Current incentives are
estimated to total $1.2 billion for fiscal years 2002 through 2006. They include a tax credit for
electric vehicles and expensing for clean-fuel vehicles ($20 million), a tax credit for the production
of electricity from wind or biomass and a tax credit for certain solar energy property ($S90
million), and an exclusion from gross income for certain energy conservation subsidies provided
by public utilities to their customers ($S80 million).'
Electric and clean-fuel vehicles and clean-fuel vehicle refueling property
A 10-percent tax credit is provided for the cost of a qualified electric vehicle, up to a
maximum credit of $4,000. A qualified electric vehicle is a motor vehicle that is powered
primarily by an electric motor drawing current from rechargeable batteries, fuel cells, or other
portable sources of electric current, the original use of which commences with the taxpayer, and
that is acquired for use by the taxpayer and not for resale. The full amount of the credit is
available for purchases prior to 2002. The credit begins to phase down in 2002 and does not
apply to vehicles placed in service after 2004.
Certain costs of qualified clean-fuel vehicles and clean-fuel vehicle refueling property may
be deducted when such property is placed in service. Qualified electric vehicles do not qualify for
the clean-fuel vehicle deduction. The deduction begins to phase down in 2002 and does not apply
to property placed in service after 2004.
Energy from wind or biomass
A 1.S-cent-per-kilowatt-hour tax credit is provided for electricity produced from wind,
"closed-loop" biomass (organic material from a plant that is planted exclusively for purposes of
being used at a qualified facility to produce electricity), and poultry waste. The electricity must be
sold to an unrelated person and the credit is limited to the first 10 years of production. The credit
applies only to facilities placed in service before January 1,2002. The credit amount is indexed
for inflation after 1992.

, Analytical Perspectives, Budget a/the United States Government, Fiscal Year 2002,
U.S. Government Printing Office, Washington, DC, 2001, p. 63.

-3Solar energy
A 10-percent investment tax credit is provided to businesses for qualifying equipment that
uses solar energy to generate electricity, to heat or cool or provide hot water for use in a
structure, or to provide solar process heat.
Ethanol and renewable source methanol
An income tax credit and an excise tax exemption are provided for ethanol and renewable
source methanol used as a fuel. In general, the income tax credit is 53 cents per gallon for ethanol
and 60 cents per gallon for renewable source methanol. As an alternative to the income tax
credit, gasohol blenders may claim an equivalent gasoline tax exemption for each ethanol and
renewable source methanol that is blended into qualifying gasohol.
The income tax credit expires on December 31, 2007, and the excise tax exemption
expires on September 30, 2007. In addition, the ethanol credit and exemption are each reduced
by 1 cent per gallon in 2003 and by an additional 1 cent per gallon in 2005. Neither the credit nor
the exemption applies during any period in which motor fuel taxes dedicated to the Highway
Trust Fund are limited to 4.3 cents per gallon. Under current law, the motor fuel tax dedicated to
the Highway Trust Fund will be limited to 4.3 cents per gallon beginning on October 1,2005.
Energy conservation subsidies
Subsidies provided by public utilities to their customers for the purchase or installation of
energy conservation measures are excluded from the customers' gross income. An energy
conservation measure is any installation or modification primarily designed to reduce consumption
of electricity or natural gas or to improve the management of energy demand with respect to a
dwelling unit.
Administration budget proposals
The Administration's budget proposals for fiscal year 2002 include tax incentives for
renewable energy resources. The budget also proposes to modify the tax treatment of nuclear
decommissioning funds. The Administration's proposals are described below. 2
Electricity from wind and biomass
The Administration proposes to extend the credit for electricity produced from wind and
biomass for three years to facilities placed in service before January 1, 2005. In addition, eligible
biomass sources would be expanded to include certain biomass from forest-related resources,

For a more detailed description, see General Explanations of the Administration's
Fiscal Year 2002 Tax Relief Proposals, Department of the Treasury, April 2001.
2

-4agricultural sources, and other specified sources. Special rules would apply to biomass facilities
placed in service before January 1,2002. Electricity produced at such facilities from newly
eligible sources would be eligible for the credit only from January 1, 2002, through December 31,
2004. The credit for such electricity would be computed at a rate equal to 60 percent of the
generally applicable rate. Electricity produced from newly eligible biomass co-fired in coal plants
would also be eligible for the credit only from January 1, 2002, through December 31, 2004. The
credit for such electricity would be computed at a rate equal to 30 percent of the generally
applicable rate.
Residential solar energy systems
The Administration proposes a new tax credit for individuals that purchase solar energy
equipment used to generate electricity (photovoltaic equipment) or heat water (solar water
heating equipment) for use in a dwelling unit that the individual uses as a residence. The credit
would be available only for equipment used exclusively for purposes other than heating swimming
pools. The proposed credit would be equal to 15 percent of the cost of the equipment and its
installation. The credit would be nonrefundable and an individual would be allowed a lifetime
maximum credit of $2,000 per residence for photovoltaic equipment and $2,000 per residence for
solar water heating equipment. The credit would apply only to solar water heating equipment
placed in service after December 31, 2001, and before January 1, 2006, and to photovoltaic
systems placed in service after December 31, 2001, and before January 1, 2008.
Nuclear decommissioning funds
The Administration proposes to repeal the current law provision that limits deductible
contributions to a nuclear decommissioning fund to the amount included in the taxpayer's cost of
service for ratemaking purposes. Thus, unregulated taxpayers would be allowed a deduction for
amounts contributed to a qualified nuclear decommissioning fund. The Administration also
proposes to permit funding of all decommissioning costs (including pre-1984 costs) through
qualified nuclear decommissioning funds. Contributions to fund pre-1984 costs would be
deductible except to the extent a deduction (other than under the qualified fund rules) or an
exclusion from income has been previously allowed with respect to those costs. The
Administration's proposal would clarify that any transfer of a qualified nuclear decommissioning
fund in connection with the transfer of the power plant with which it is associated would be
nontaxable and no gain or loss will be recognized by the transferor or transferee as a result of the
transfer. In addition, the proposal would permit taxpayers to make deductible contributions to a
qualified fund after the end of the nuclear power plant's estimated useful life and would provide
that nuclear decommissioning costs are deductible when paid.

-5NEPD Group proposals

The Report of the NEPD Group also included tax incentives for renewable energy
resources and for more efficient energy use. The NEPD Group proposals are described below. 3
Fuel from landfill methane
The NEPD Group proposes to extend the section 29 credit for fuel produced from landfill
methane produced at a facility (or portion of a facility) that is placed in service after December 31,
2001. Fuel produced at such facilities would be eligible for the credit through December 31,
2010. The proposal would also expand the credit by permitting the credit for fuel used by the
taxpayer to produce electricity. The credit for fuel produced at landfills subject to EPA's 1996
New Source Performance Standards/Emissions Guidelines would be limited to two-thirds of the
otherwise applicable amount. In the case of landfills with facilities that currently qualify for the
section 29 credit, this limitation would not apply until after 2007.
Ethanol and renewable source methanol
The NEPD Group proposes to extend the income tax credit and excise tax exemption for
ethanol and renewable source methanol through December 31,2010. The current law rule
providing that neither the credit nor the exemption applies during any period in which motor fuel
taxes dedicated to the Highway Trust Fund are limited to 4.3 cents per gallon would be retained.
As under current law, the credit and the exemption would each be reduced by 1 cent per gallon in
2003 and by an additional 1 cent per gallon in 2005.
Hybrid and fuel cell vehicles
The NEPD Group proposes to provide temporary tax credits for certain hybrid and fuel
cell vehicles.
A credit of $250 to $4,000 would be available for purchases of qualifying hybrid vehicles
after December 31, 200 1, and before January 1, 2008. A hybrid vehicle is a vehicle that draws
propulsion from both an on-board internal combustion or heat engine using combustible fuel and
an on-board rechargeable energy storage system. To qualify for the minimum credit, a hybrid
vehicle would be required to derive at least 5 percent of its maximum available power from the
rechargeable energy storage system. Larger credits would be available for vehicles that derive
larger percentages of power from the rechargeable energy storage system and for vehicles that
meet specified fuel economy standards.
A credit of $1 ,000 to $8,000 would be available for the purchase of qualifying fuel cell
vehicles after December 31, 2001, and before January 1, 2008. A fuel cell vehicle is a motor

For a more detailed description, see the attachments to this testimony.

-6vehicle propelled by power derived from one or more cells that convert chemical energy directly
into electricity by combining oxygen with on-board hydrogen (including hydrogen produced from
on-board fuel that requires reformation before use). To qualify for the minimum credit, a fuel cell
vehicle would be required to meet a minimum fuel economy standard for its weight class. Larger
credits would be available for vehicles that achieve higher fuel economy standards.
Combined heat and power systems
To encourage more efficient energy usage, the NEPD Group proposes to provide a 10percent investment credit for qualifying combined heat and power (CHP) systems. CHP systems
are used to produce electricity (and/or mechanical power) and usable heat from the same primary
energy source. To qualify for the credit, a system would be required to produce at least 20
percent of its total useful energy in the form of thermal energy and at least 20 percent in the form
of electrical and/or mechanical power and would also be required to satisfy an energy efficiency
standard. The credit would apply to CHP equipment placed in service after December 31, 2001,
and before January 1,2007.

Increasing Domestic Oil and Gas Production
Before turning to a discussion of the present tax treatment of oil and gas activities, we
would like to provide a brief overview of this sector.
Overview
Oil is an internationally traded commodity with its domestic price set by world supply and
demand. Domestic exploration and production activity is affected by the world price of crude oil.
Historically, world oil prices have fluctuated substantially. From 1970 to the early 1980s, there
was a fivefold increase in real oil prices. World oil prices fell sharply in 1986 and were relatively
more stable from 1986 through 1997. During that period, average refiner acquisition costs ranged
from $14.91 to $23.59 per barrel in real 1992 dollars. In 1998, however, oil costs to the refiner
declined to $12.52 per barrel in nominal dollars ($11.14 per barrel in 1992 dollars), their lowest
level in 25 years in real terms. Since 1998, the decline has reversed with refiner acquisition costs
(in nominal dollars) rising to $17.51 per barrel in 1999 and $27.69 per barrel in 2000 (the price
has since dropped to $23.89 per barrel in April 2001, the latest month for which composite
figures are available). The equivalent prices in 1992 dollars are $15.31 per barrel in 1999, $24.28
per barrel in 2000, and $20.20 per barrel in April 2001.
Domestic oil production has been on the decline since the mid-1980s. From 1978 to 1983
oil consumption in the United States also declined, but increasing consumption since 1983 has
more than offset this decline. In 2000, domestic oil consumption was 28 percent higher than in
1970. The decline in oil production and increase in consumption have led to an increase in oil
imports. Net petroleum (crude and product) imports have risen from approximately 38 percent of
consumption in 1988 to 52 percent in 2000.

-7A similar pattern of large recent price increases and increasing dependence on imports has
occurred in the natural gas market. During the second half of the 1990s, spot prices for natural
gas exceeded $4.00 per million Btu (MMBtu) in only one month (February 1996). The spot price
again exceeded $4.00 per MMBtu in May 2000, rose above $5.00 per MMBtu in September
2000, and exceeded $10.00 per MMBtu for several days last winter. Since last winter the price
has fallen sharply. The current spot price is approximately $3.71 per MMBtu. 4
The United States has large natural gas reserves and was essentially self-sufficient in
natural gas until the late 1980s. Since 1986, natural gas consumption has increased by more than
30 percent but natural gas production has increased by only 17 percent. Net imports as a share of
consumption nearly quadrupled from 1986 to 2000, rising from 4.2 percent to 15.6 percent.
Natural gas from Canada makes up nearly all of the imports into the United States.

Current law tax incentives for oil and gas production
Although the Administration's energy plan contains no new tax incentives for oil and gas
production, the Internal Revenue Code includes a variety of measures to stimulate domestic
exploration and production. They are generally justified on the ground that they reduce
vulnerability to an oil supply disruption through increases in domestic production, reserves,
exploration activity, and production capacity. The tax incentives contained in present law address
the drop in domestic exploratory drilling that has occurred since the mid-1950s and the continuing
loss of production from mature fields and marginal properties.
Incentives for oil and gas production are estimated to total $9.8 billion for fiscal years
2002 through 2006. 5 They include the nonconventional fuels (i.e., oil produced from shale and tar
sands, gas produced from geopressured brine, Devonian shale, coal seams, tight formations, or
biomass, and synthetic fuel produced from coal) production credit ($2.4 billion), the enhanced oil
recovery credit ($4.4 billion), the allowance of percentage depletion for independent producers
and royalty owners, including increased percentage depletion for stripper wells ($2.3 billion), the
exception from the passive loss limitation for working interests in oil and gas properties ($100
million), and the expensing of intangible drilling and development costs ($640 million). In
addition to those tax expenditures, oil and gas activities have largely been eliminated from the
alternative minimum tax. These provisions are described in detail below.
Percentage depletion
Certain costs incurred prior to drilling an oil- or gas-producing property are recovered
through the depletion deduction. These include costs of acquiring the lease or other interest in

All price references are to the spot price at the Henry Hub and are in nominal dollars.

Analytical Perspectives, Budget of the United States Government, Fiscal Year 2002,
U.S. Government Printing Office, Washington, DC, 2001, p. 63.
5

-8the property, and geological and geophysical costs (in advance of actual drilling). Any taxpayer
having an economic interest in a producing property may use the cost depletion method. Under
this method, the basis recovery for a taxable year is proportional to the exhaustion of the property
during the year. The cost depletion method does not permit cost recovery deductions that exceed
the taxpayer's basis in the property or that are allowable on an accelerated basis. Thus, the
deduction for cost depletion is not generally viewed as a tax incentive.
Independent producers and royalty owners (as contrasted to integrated oil companies)6
may qualifY for percentage depletion. A qualifYing taxpayer determines the depletion deduction
for each oil or gas property under both the percentage depletion method and the cost depletion
method and deducts the larger of the two amounts. Under the percentage depletion method,
generally 15 percent of the taxpayer's gross income from an oil- or gas-producing property is
allowed as a deduction in each taxable year. The amount deducted may not exceed 100 percent
of the net income from that property in any year (the "net-income limitation").? Additionally, the
percentage depletion deduction for all oil and gas properties may not exceed 65 percent of the
taxpayer's overall taxable income (determined before such deduction and adjusted for certain loss
carrybacks and trust distributions). 8
A taxpayer may claim percentage depletion with respect to up to 1,000 barrels of average
daily production of domestic crude oil or an equivalent amount of domestic natural gas. For
producers of both oil and natural gas, this limitation applies on a combined basis. All production

An independent producer is any producer who is not a "retailer" or "refiner." A retailer
is any person who directly, or through a related person, sells oil or natural gas or any product
derived therefrom (1) through any retail outlet operated by the taxpayer or related person, or (2)
to ;my person that is obligated to market or distribute such oil or natural gas (or product derived
therefrom) under the name of the taxpayer or the related person, or that has the authority to
occupy any retail outlet owned by the taxpayer or a related person. Bulk sales of crude oil and
natural gas to commercial or industrial users, and bulk sales of aviation fuel to the Department of
Defense, are not treated as retail sales for this purpose. Further, a person is not a retailer within
the meaning of this provision if the combined gross receipts of that person and all related persons
from the retail sale of oil, natural gas, or any product derived therefrom do not exceed $5 million
for the taxable year. A refiner is any person who directly or through a related person engages in
the refining of crude oil, but only if such person or related person has a refinery run in excess of
50,000 barrels per day on any day during the taxable year.
6

? By contrast, for any other mineral qualifying for the percentage depletion deduction, the
deduction may not exceed 50 percent of the taxpayer's taxable income from the depletable
property.
Amounts disallowed as a result of this rule may be carried forward and deducted in
subsequent taxable years, subject to the 65-percent-of-taxable-income limitation for those years.
g

-9owned by businesses under common control and members of the same family must be aggregated;
each group is then treated as one producer for application of the 1,000-barrellimitation.
Special percentage depletion provisions apply to oil and gas production from marginal
properties. The statutory percentage depletion rate is increased (from the general rate of 15
percent) by one percentage point for each whole dollar that the average price of crude oil (as
determined under the provisions of the nonconventional fuels production credit of section 29) for
the immediately preceding calendar year is less than $20 per barrel. In no event may the rate of
percentage depletion under this provision exceed 25 percent for any taxable year. The increased
rate applies for the taxpayer's taxable year which immediately follows a calendar year for which
the average crude oil price falls below the $20 floor. To illustrate the application of this
provision, the average price of a barrel of crude oil for calendar year 1999 was $15.56; thus, the
percentage depletion rate for production from marginal wells was increased by four percent (to 19
percent) for taxable years beginning in 2000. The 100-percent-of-net-income limitation has been
suspended for marginal wells for taxable years beginning after December 31, 1997, and before
January 1,2002. The Administration's budget for fiscal year 2002 proposes a one-year extension
of this provision. Under the Administration proposal, marginal wells would continue to be
exempt from the limitation during taxable years beginning in 2002.
Marginal production is defined for this purpose as domestic crude oil or domestic natural
gas which is produced during any taxable year from a property which (1) is a stripper well
property for the calendar year in which the taxable year begins, or (2) is a property substantially
all of the production from which during such calendar year is heavy oil (i.e., oil that has a
weighted average gravity of 20 degrees API or less corrected to 60 degrees Fahrenheit). A
stripper well property is any oil or gas property for which daily average production per producing
oil or gas well is not more than 15 barrel equivalents in the calendar year during which the
taxpayer's taxable year begins. 9 A property qualifies as a stripper well property for a calendar
year only if the wells on such property were producing during that period at their maximum
efficient rate of flow.
If a taxpayer's property consists of a partial interest in one or more oil- or gas-producing
wells, the determination of whether the property is a stripper well property or a heavy oil property
is made with respect to total production from such wells, including the portion of total production
attributable to ownership interests other than the taxpayer's. If the property satisfies the
requirements of a stripper well property, then each owner receives the benefits of this provision
with respect to its allocable share of the production from the property for its taxable year that
begins during the calendar year in which the property so qualifies.

Equivalent barrels is computed as the sum of (1) the number of barrels of crude oil
produced, and (2) the number of cubic feet of natural gas produced divided by 6,000. If a weB
produced 10 barrels of crude oil and 12,000 cubic feet of natural gas, its equivalent barrels
produced would equal 12 (i.e., 10 + (12,000/6,000».
9

-10The allowance for percentage depletion on production from marginal oil and gas
properties is subject to the 1,000-barrel-per-day limitation discussed above. Unless a taxpayer
elects otherwise, marginal production is given priority over other production for purposes of
utilization of that limitation.
Because percentage depletion, unlike cost depletion, is computed without regard to the
taxpayer's basis in the depletable property, cumulative depletion deductions may be far greater
than the amount expended by the taxpayer to acquire or develop the property.
Intangible drilling and development costs
In general, costs that benefit future periods must be capitalized and recovered over such
periods for income tax purposes, rather than being expensed in the period the costs are incurred.
In addition, the uniform capitalization rules require certain direct and indirect costs allocable to
property to be included in inventory or capitalized as part of the basis of such property. In
general, the uniform capitalization rules apply to real and tangible personal property produced by
the taxpayer or acquired for resale.
Special rules apply to intangible drilling and development costs ("IDCs").lO Under these
special rules, an operator (i.e., a person who holds a working or operating interest in any tract or
parcel of land either as a fee owner or under a lease or any other form of contract granting
working or operating rights) who pays or incurs IDCs in the development of an oil or gas
property located in the United States may elect either to expense or capitalize those costs. The
uniform capitalization rules do not apply to otherwise deductible IDCs.
If a taxpayer elects to expense IDCs, the amount of the IDCs is deductible as an expense
in the taxable year the cost is paid or incurred. Generally, IDCs that a taxpayer elects to capitalize
may be recovered through depletion or depreciation, as appropriate; or in the case of a

IDCs include all expenditures made by an operator for wages, fuel, repairs, hauling,
supplies, etc., incident to and necessary for the drilling of wells and the preparation of wells for
the production of oil and gas. In addition, IDCs include the cost to operators of any drilling or
development work (excluding amounts payable only out of production or gross or net proceeds
from production, if the amounts are depletable income to the recipient, and amounts properly
allocable to the cost of depreciable property) done by contractors under any form of contract
(including a turnkey contract). Such work includes labor, fuel, repairs, hauling, and supplies
which are used in the drilling, shooting, and cleaning of wells; in such clearing of ground,
draining, road making, surveying, and geological works as are necessary in preparation for the
drilling of wells; and in the construction of such derricks, tanks, pipelines, and other physical
structures as are necessary for the drilling of wells and the preparation of wells for the production
of oil and gas. Generally, IDCs do not include expenses for items which have a salvage value
(such as pipes and casings) or items which are part of the acquisition price of an interest in the
10

property.

-11-

nonproductive well ("dry hole"), the operator may elect to deduct the costs. In the case of an
integrated oil company (i.e., a company that engages, either directly or through a related
enterprise, in substantial retailing or refining activities) that has elected to expense IDCs, 30
percent of the IDCs on productive wells must be capitalized and amortized over a 60-month
period. 11
A taxpayer that has elected to deduct IDCs may, nevertheless, elect to capitalize and
amortize certain IDCs over a 60-month period beginning with the month the expenditure was paid
or incurred. This rule applies on an expenditure-by-expenditure basis; that is, for any particular
taxable year, a taxpayer may deduct some portion of its IDCs and capitalize the rest under this
provision. This allows the taxpayer to reduce or eliminate IDC adjustments or preferences under
the alternative minimum tax.
The election to deduct IDCs applies only to those IDCs associated with domestic
properties. I2 For this purpose, the United States includes certain wells drilled offshore. 13
Intangible drilling costs are a major portion of the costs necessary to locate and develop
oil and gas reserves. Because the benefits obtained from these expenditures are of value
throughout the life of the project, these costs would be capitalized and recovered over the period
of production under generally applicable accounting principles.
Nonconventional fuels production credit

11 The IRS has ruled that if an integrated oil company ceases to be an integrated oil
company, it may not immediately write off the unamortized portion of the IDCs capitalized under
this rule, but instead must continue to amortize those IDCs over the 60-month amortization
period.

12 In the case of IDCs paid or incurred with respect to an oil or gas well located outside of
the United States, the costs, at the election of the taxpayer, are either (1) included in adjusted
basis for purposes of computing the amount of any deduction allowable for cost depletion or (2)
capitalized and amortized ratably over a 1O-year period beginning with the taxable year such costs
were paid or incurred.

The term "United States" for this purpose includes the seabed and subsoil of those
submerged lands that are adjacent to the territorial waters of the United States and over which the
United States has exclusive rights, in accordance with international law, with respect to the
exploration and exploitation of natural resources (i.e., the Continental Shelf area).
13

-12Taxpayers that produce certain qualifying fuels from nonconventional sources are eligible
for a tax credit ("the section 29 credit") equal to $3 per barrel or barrel-of-oil equivalent. 14 Fuels
qualifying for the credit must be produced domestically from a well drilled, or a facility treated as
placed in service before January 1, 1993. 15 The section 29 credit generally is available for
qualified fuels sold to unrelated persons before January 1, 2003. 16
For purposes of the credit, qualified fuels include: (1) oil produced from shale and tar
sands; (2) gas produced from geopressured brine, Devonian shale, coal seams, a tight formation,
or biomass (i.e., any organic material other than oil, natural gas, or coal (or any product thereof);
and (3) liquid, gaseous, or solid synthetic fuels produced from coal (including lignite), including
such fuels when used as feedstocks. The amount of the credit is determined without regard to any
production attributable to a property from which gas from Devonian shale, coal seams,
geopressured brine, or a tight formation was produced in marketable quantities before 1980.
The amount of the section 29 credit generally is adjusted by an inflation adjustment factor
for the calendar year in which the sale occurS. 17 There is no adjustment for inflation in the case of
the credit for sales of natural gas produced from a tight formation. The credit begins to phase out
if the annual average unregulated wellhead price per barrel of domestic crude oil exceeds $23.50
multiplied by the inflation adjustment factor. 18

A barrel-of-oil equivalent generally means that amount of the qualifying fuel which has a
Btu (British thermal unit) content of 5.8 million.
14

A facility that produces gas from biomass or produces liquid, gaseous, or solid synthetic
fuels from coal (including lignite) generally will be treated as being placed in service before
January 1, 1993, if it is placed in service by the taxpayer before July 1, 1998, pursuant to a written
binding contract in effect before January 1, 1997. In the case of a facility that produces coke or
coke gas, however, this provision applies only if the original use of the facility commences with
the taxpayer. Also, the IRS has ruled that production from certain post-1992 "recompletions" of
wells that were originally drilled prior to the expiration date of the credit would qualify for the
section 29 credit.
15

If a facility that qualifies for the binding contract rule is originally placed in service after
December 31, 1992, production from the facility may qualify for the credit if sold to an unrelated
person before January 1,2008.
16

The inflation adjustment factor for the 2000 taxable year was 2.0454. Therefore, the
inflation-adjusted amount of the credit for that year was $6.14 per barrel or barrel equivalent.
17

For 2000, the inflation adjusted threshold for onset of the phaseout was $48.07 ($23.50
x 2.0454) and the average wellhead price for that year was $26.73.
18

-13The amount of the section 29 credit allowable with respect to a project is reduced by any
unrecaptured business energy tax credit or enhanced oil recovery credit claimed with respect to
such project.
As with most other credits, the section 29 credit may not be used to offset alternative
minimum tax liability. Any unused section 29 credit generally may not be carried back or forward
to another taxable year; however, a taxpayer receives a credit for prior year minimum tax liability
to the extent that a section 29 credit is disallowed as a result of the operation of the alternative
minimum tax. The credit is limited to what would have been the regular tax liability but for the
alternative minimum tax.
The provision provides a significant tax incentive (currently about $6 per barrel of oil
equivalent or $1 per thousand cubic feet of natural gas). Coalbed methane and gas from tight
formations currently account for most of the credit.
Enhanced oil recovery credit
Taxpayers are permitted to claim a general business credit, which consists of several
different components. One component of the general business credit is the enhanced oil recovery
credit. The general business credit for a taxable year may not exceed the excess (if any) of the
taxpayer's net income tax over the greater of (1) the tentative minimum tax, or (2) 25 percent of
so much of the taxpayer's net regular tax liability as exceeds $25,000. Any unused general
business credit generally may be carried back one taxable year and carried forward 20 taxable
years.
The enhanced oil recovery credit for a taxable year is equal to 15 percent ofcertain costs
attributable to qualified enhanced oil recovery ("EOR") projects undertaken by the taxpayer in the
United States during the taxable year. To the extent that a credit is allowed for such costs, the
taxpayer must reduce the amount otherwise deductible or required to be capitalized and recovered
through depreciation, depletion, or amortization, as appropriate, with respect to the costs. A
taxpayer may elect not to have the enhanced oil recovery credit apply for a taxable year.
The amount of the enhanced oil recovery credit is reduced in a taxable year following a
calendar year during which the annual average unregulated wellhead price per barrel of domestic
crude oil exceeds $28 (adjusted for inflation since 1990).19 In such a case, the credit would be
reduced ratably over a $6 phaseout range.
For purposes of the credit, qualified enhanced oil recovery costs include the following
costs which are paid or incurred with respect to a qualified EOR project: (1) the cost of tangible
property which is an integral part of the project and with respect to which depreciation or

19 The average per-barrel price of crude oil for this purpose is determined in the same
manner as for purposes of the section 29 credit.

-14-

amortization is allowable; (2) IDes that the taxpayer may elect to deduct;20 and (3) the cost of
tertiary injectants with respect to which a deduction is allowable, whether or not chargeable to
capital account.
A qualified EOR project means any project that is located within the United States and
involves the application (in accordance with sound engineering principles) of one or more
qualifYing tertiary recovery methods which can reasonably be expected to result in more than an
insignificant increase in the amount of crude oil which ultimately will be recovered. The
qualifYing tertiary recovery methods generally include the following nine methods: miscible fluid
displacement, steam-drive injection, microemulsion flooding, in situ combustion, polymeraugmented water flooding, cyclic-steam injection, alkaline flooding, carbonated water flooding,
and immiscible non-hydrocarbon gas displacement, or any other method approved by the IRS. In
addition, for purposes of the enhanced oil recovery credit, immiscible non-hydrocarbon gas
displacement generally is considered a qualifYing tertiary recovery method, even if the gas injected
is not carbon dioxide.
A project is not considered a qualified EOR project unless the project's operator submits
to the IRS a certification from a petroleum engineer that the project meets the requirements set
forth in the preceding paragraph.
The enhanced oil recovery credit is effective for taxable years beginning after December
31, 1990, with respect to costs paid or incurred in EOR projects begun or significantly expanded
after that date.
Conventional oil recovery methods do not recover all of a well's oil. Some of the
remaining oil can be extracted by unconventional methods, but these methods are generally more
costly. At current world oil prices, a large part of the remaining oil in place is uneconomic to
recover by unconventional methods. In this environment, the EOR credit can increase
recoverable reserves. Although recovering oil using EOR methods is more expensive than
recovering it using conventional methods, it may be less expensive than producing oil from new
reservoirs. Although the credit could phase out at higher oil prices, it is fully effective at present
world oil prices.
Alternative minimum tax
A taxpayer is subject to an alternative minimum tax ("AMT") to the extent that its
tentative minimum tax exceeds its regular income tax liability. A corporate taxpayer's tentative
minimum tax generally equals 20 percent of its alternative minimum taxable income in excess of
an exemption amount. (The marginal AMT rate for a noncorporate taxpayer is 26 or 28 percent,
depending on the amount of its alternative minimum taxable income above an exemption amount.)

In the case of an integrated oil company, the credit base includes those IDCs which the
taxpayer is required to capitalize.
20

-15Alternative minimum taxable income ("AMTI") is the taxpayer's taxable income increased by
certain tax preferences and adjusted by determining the tax treatment of certain items in a manner
which negates the deferral of income resulting from the regular tax treatment of those items.
As a general rule, percentage depletion deductions claimed in excess of the basis of the
depletable property constitute an item of tax preference in determining the AMT. In addition, the
AMTI of a corporation is increased by an amount equal to 75 percent of the amount by which
adjusted current earnings ("ACE") of the corporation exceed AMTI (as determined before this
adjustment). In general, ACE means AMTI with additional adjustments that generally follow the
rules presently applicable to corporations in computing their earnings and profits. As a general
rule a corporation must use the cost depletion method in computing its ACE adjustment. Thus,
the difference between a corporation's percentage depletion deduction (if any) claimed for regular
tax purposes and its allowable deduction determined under the cost depletion method is factored
into its overall ACE adjustment.
Excess percentage depletion deductions related to crude oil and natural gas production are
not items of tax preference for AMT purposes. In addition, corporations that are independent oil
and gas producers and royalty owners may determine depletion deductions using the percentage
depletion method in computing their ACE adjustments.
The difference between the amount of a taxpayer's IDC deductions and the amount which
would have been currently deductible had IDC's been capitalized and recovered over a lO-year
period may constitute an item of tax preference for the AMT to the extent that this amount
exceeds 65 percent of the taxpayer's net income from oil and gas properties for the taxable year
(the "excess IDC preference"). In addition, for purposes of computing a corporation's ACE
adjustment to the AMT, IDCs are capitalized and amortized over the 60-month period beginning
with the month in which they are paid or incurred. The preference does not apply if the taxpayer
elects to capitalize and amortize IDCs over a 60-month period for regular tax purposes.
IDC's related to oil and gas wells are generally not taken into account in computing the
excess IDC preference of taxpayers that are not integrated oil companies. This treatment does
not apply, however, to the extent it would reduce the amount of the taxpayer's AMTI by more
than 40 percent of the amount that the taxpayer's AMTI would have been if those IDCs had been
taken into account.
In addition, for corporations other than integrated oil companies, there is no ACE
adjustment for IDCs with respect to oil and gas wells. That is, such a taxpayer is permitted to use
its regular tax method of writing off those IDCs for purposes of computing its adjusted current
earnmgs.
Absent these rules, the incentive effect of the special provisions for oil and gas would be
reduced for firms subject to the AMT. These rules, however, effectively eliminate AMT concerns
for independent producers.

-16Passive activity loss and credit rules
A taxpayer's deductions from passive trade or business activities, to the extent they
exceed income from all such passive activities of the taxpayer (exclusive of portfolio income),
generally may not be deducted against other income.21 Thus, for example, an individual taxpayer
may not deduct losses from a passive activity against income from wages. Losses suspended
under this "passive activity loss" limitation are carried forward and treated as deductions from
passive activities in the following year, and thus may offset any income from passive activities
generated in that later year. Losses from a passive activity may be deducted in full when the
taxpayer disposes of its entire interest in that activity to an unrelated party in a transaction in
which all realized gain or loss is recognized.

An activity generally is treated as passive if the taxpayer does not materially participate in
it. A taxpayer is treated as materially participating in an activity only if the taxpayer is involved in
the operations of the activity on a basis which is regular, continuous, and substantial.
A working interest in an oil or gas property generally is not treated as a passive activity,
whether or not the taxpayer materially participates in the activities related to that property. This
exception from the passive activity rules does not apply if the taxpayer holds the working interest
through an entity which limits the liability of the taxpayer with respect to the interest. In addition,
if a taxpayer has any loss for any taxable year from a working interest in an oil or gas property
which is treated pursuant to this working interest exception as a loss which is not from a passive
activity, then any net income from such property (or any property the basis of which is detennined
in whole or in part by reference to the basis of such property) for any succeeding taxable year is
treated as income of the taxpayer which is not from a passive activity.
Similar limitations apply to the utilization of tax credits attributable to passive activities.
Thus, for example, the passive activity rules (and, consequently, the oil and gas working interest
exception to those rules) apply to the nonconventional fuels production credit and the enhanced
oil recovery credit. However, if a taxpayer has net income from a working interest in an oil and
gas property which is treated as not arising from a passive activity, then any tax credits
attributable to the interest in that property would be treated as credits not from a passive activity
(and, thus, not subject to the passive activity credit limitation) to the extent that the amount of the
credits does not exceed the regular tax liability which is allocable to such net income.
As a result of this exception from the passive loss limitations, owners of working interests
in oil and gas properties may use losses from such interests to offset income from other sources.

This provision applies to individuals, estates, trusts, personal service corporations, and
closely held C corporations.
21

-17Tertiary injectants
Taxpayers are allowed to deduct the cost of qualified tertiary injectant expenses for the
taxable year. Qualified tertiary injectant expenses are amounts paid or incurred for any tertiary
injectant (other than recoverable hydrocarbon injectants) which is used as a part of a tertiary
recovery method.
The provision allowing the deduction for qualified tertiary injectant expenses resolves a
disagreement between taxpayers (who considered such costs to be IDes or operating expenses)
and the IRS (which considered such costs to be subject to capitalization).
This concludes our testimony. We would be pleased to answer any questions the
Subcommittee may have.

ATTACHMENTS: NEPD GROUP PROPOSALS
Extend and Modify Credit for Fuel Produced from Landfill Methane
Current Law
Taxpayers that produce gas from biomass (including landfill methane) are eligible for a tax
credit ("the section 29 credit") equal to $3 per barrel-of-oil equivalent. For this purpose, a barrelof-oil equivalent is the amount of gas that has a Btu (British thermal unit) content of 5.8 million.
To qualifY for the credit, the gas must be produced domestically from a facility placed in service
by the taxpayer before July I, 1998, pursuant to a written binding contract in effect before
January 1, 1997. In addition, the gas must be sold to an unrelated person before January 1,2008.
The amount of the section 29 credit generally is adjusted by an inflation adjustment factor
for the calendar year in which the sale occurs. The inflation adjustment factor for the 2000
taxable year was 2.0454, and the inflation-adjusted amount of the credit for that year was $6.14
per barrel or barrel equivalent. The credit begins to phase out if the annual average unregulated
wellhead price per barrel of domestic crude oil exceeds $23.50 multiplied by the inflation
adjustment factor. For 2000, the inflation adjusted threshold for onset of the phaseout was
$48.07 ($23.50 x 2.0454) and the average wellhead price for that year was $26.73.
The amount of the section 29 credit allowable with respect to a project is reduced by any
unrecaptured business energy tax credit or enhanced oil recovery credit claimed with respect to
such project.
The section 29 credit may not be used to offset alternative minimum tax liability. Any
unused section 29 credit generally may not be carried back or forward to another taxable year;
however, a taxpayer receives a credit for prior year minimum tax liability to the extent that a
section 29 credit is disallowed as a result of the operation of the alternative minimum tax. The
credit is limited to what would have been the regular tax liability but for the alternative minimum
tax.

Reasons for Change
The tax credit helps make fuel produced from landfill methane competitive with other
fuels. Extending the credit would continue the important contribution of this renewable energy
source to the Nation's long-term energy supply.

Proposal
The credit would be allowed for fuel produced from landfill methane if the fuel is
produced from a facility (or portion of a facility) placed in service after December 31, 2001, and
before January 1,2011, and is sold (or used to produce electricity that is sold) before January 1,
2011. The credit for fuel produced at landfills subject to EPA's 1996 New Source Performance
Standards/Emissions Guidelines would be limited to two-thirds of the otherwise applicable

amount beginning on January 1, 2008, if any portion of the facility for producing fuel at the
landfill was placed in service before July 1, 1998, and beginning on January 1, 2002, in all other
cases. The proposal would clarify, for purposes of determining the extent to which a facility is
placed in service after December 31, 2001, that the facility includes the wells, pipes, and related
components used to collect landfill methane and that only production attributable to wells, pipes,
and related components placed in service after December 31, 2001, is treated as produced from
the portion of the facility placed in service after that date.

Extension of Tax Incentives for Ethanol
Current Law
Current law provides an income tax credit and an excise tax exemption for ethanol and
renewable source methanol used as a fuel. In general, the income tax credit for ethanol is 53
cents per gallon, but small ethanol producers (i.e., those producing less than 30 million gallons of
ethanol per year) qualify for a credit of 63 cents per gallon on the first 15 million gallons of
ethanol produced in a year. A credit of 60 cents per gallon is allowed for renewable source
methanol.
As an alternative to the income tax credit, gasohol blenders may claim a gasoline tax
exemption of 53 cents for each gallon of ethanol and 60 cents for each gallon of renewable source
methanol that is blended into qualifying gasohol.
The income tax credit expires on December 31, 2007, and the excise tax exemption
expires on September 30,2007. In addition, the ethanol credit and exemption are each reduced
by 1 cent per gallon in 2003 and by an additional 1 cent per gallon in 2005. Neither the credit nor
the exemption applies during any period in which motor fuel taxes dedicated to the Highway
Trust Fund are limited to 4.3 cents per gallon. Under current law, the motor fuel tax dedicated to
the Highway Trust Fund will be limited to 4.3 cents per gallon beginning on October 1,2005.

Reasons for Chan2e
The tax credit and excise tax exemption help make ethanol and renewable source methanol
competitive with other fuels. Extending the credit and exemption would continue the important
contribution of these renewable energy sources to the Nation's long-term energy supply.

Proposal
The income tax credit and the excise tax exemption would be extended through December
31, 2010. The current law rule providing that neither the credit nor the exemption applies during
any period in which motor fuel taxes dedicated to the Highway Trust Fund are limited to 4.3 cents
per gallon would be retained. As under current law, the credit and the exemption would each be
reduced by 1 cent per gallon in 2003 and by an additional 1 cent per gallon in 2005.

Provide Tax Credit for Certain Hybrid and Fuel Cell Vehicles
Current Law
No generally available income tax credit for purchases of hybrid vehicles is available
currently. A 10-percent tax credit is provided for the cost of a qualified electric vehicle, up to a
maximum credit of $4,000. A qualified electric vehicle is a motor vehicle that is powered
primarily by an electric motor drawing current from rechargeable batteries, fuel cells, or other
portable sources of electric current, the original use of which commences with the taxpayer, and
that is acquired for use by the taxpayer and not for resale. The full amount of the credit is
available for purchases prior to 2002. The credit begins to phase down in 2002 and does not
apply to vehicles placed in service after 2004.
Certain costs of qualified clean-fuel property, including clean-fuel vehicles, may be
deducted when such property is placed in service. Qualified electric vehicles do not qualify for
the clean-fuel vehicle deduction. The deduction begins to phase down in 2002 and does not apply
to property placed in service after 2004.

Reasons for Change
The transportation sector now accounts for 67 percent of u.s. oil consumption. Cars,
sport utility vehicles, light trucks, and minivans alone account for 40 percent of U.S. oil
consumption, about 20 to 40 percent of all urban smog-forming emissions and 20 percent of
greenhouse gas emissions. Almost all of these vehicles use a single gasoline-fueled engine.
Hybrid vehicles, which have more than one source of power on board the vehicle, and
electric vehicles have the potential to reduce petroleum consumption, air pollution, and
greenhouse gas emissions. The proposed credits will encourage the purchase of highly fuel
efficient vehicles that incorporate advanced automotive technologies and will help to move hybrid
and fuel cell vehicles from the laboratory to the highway. These vehicles can significantly reduce
oil consumption, emissions of air pollutants, and emissions of carbon dioxide, the most prevalent
greenhouse gas.

Proposal
The proposal would provide temporary tax credits for certain hybrid and fuel cell vehicles:
(1) Credit for qualified hybrid vehicles. A credit, of up to $4,000, would be available for
purchases of qualified hybrid vehicles after December 31, 2001, and before January 1,
2008. The credit would be:
(a)
(b)

$250 if the rechargeable energy storage system provides at least 5 percent but less
than 10 percent of the maximum available power;
$500 if the rechargeable energy storage system provides at least 10 percent and
less than 20 percent of the maximum available power;

$750 if the rechargeable energy storage system provides at least 20 percent and
less than 30 percent of the maximum available power; and
$1,000 if the rechargeable energy storage system provides 30 percent or more of
the maximum available power.

If the vehicle's fuel economy exceeds the 2000 model year city fuel economy, the amount
of credit shown in (a) through (d) above would be increased by the following amounts:
(i)
(ii)
(iii)
(iv)
(v)
(vi)

$500 if the vehicle achieves at least 125 percent but less than 150 percent of the
2000 model year city fuel economy;
$1,000 if the vehicle achieves at least 150 percent but less than 175 percent of the
2000 model year city fuel economy;
$1,500 if the vehicle achieves at least 175 percent but less than 200 percent of the
2000 model year city fuel economy;
$2,000 if the vehicle achieves at least 200 percent but less than 225 percent of the
2000 model year city fuel economy;
$2,500 if the vehicle achieves at least 225 percent but less than 250 percent of the
2000 model year city fuel economy; and
$3,000 if the vehicle achieves at least 250 percent of the 2000 model year city fuel
economy.

(2) Credit for qualified fuel cell vehicles. A credit of up to $8,000 would be available for
the purchase of new qualified fuel cell vehicles after December 31, 2001, and before
January 1,2008. The credit would be $4,000, but, if the vehicle's fuel economy exceeds
the 2000 model year city fuel economy, the credit would increase by the following
amounts:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)

$1,000 if the vehicle achieves at least 150 percent but less than 175 percent of the
2000 model year city fuel economy;
$1,500 if the vehicle achieves at least 175 percent but less than 200 percent of the
2000 model year city fuel economy;
$2,000 if the vehicle achieves at least 200 percent but less than 225 percent of the
2000 model year city fuel economy;
$2,500 if the vehicle achieves at least 225 percent but less than 250 percent of the
2000 model year city fuel economy;
$3,000 if the vehicle achieves at least 250 percent but less than 275 percent of the
2000 model year city fuel economy;
$3,500 if the vehicle achieves at least 275 percent but less than 300 percent of the
2000 model year city fuel economy; and
$4,000 if the vehicle achieves at least 300 percent of the 2000 model year city fuel
economy.

The 2000 model year city fuel economy would be the following:
If the vehicle inertia
weight class is:
1,500 or 1,7 50 lbs
2,0001bs
2,2501bs
2,500lbs
2,750 lbs
3,000 lbs
3,500 lbs
4,0001bs
4,500lbs
5,000 lbs
5,500 lbs
6,0001bs
6,500lbs
7,000 or 8,500 lbs

The 2000 model year city fuel economy is:
For a passenger automobile:
For a light truck:
43.7 mpg
38.3 mpg
34.1 mpg
30.7 mpg
27.9 mpg
25.6 mpg
22.0 mpg
19.3 mpg
17.2 mpg
15.5 mpg
14.1 mpg
12.9 mpg
11.9 mpg
11.1 mpg

37.6 mpg
33.7 mpg
30.6 mpg
28.0 mpg
25.9 mpg
24.1 mpg
21.3 mpg
19.0 mpg
17.3 mpg
15.8 mpg
14.6 mpg
13.6 mpg
12.8 mpg
12.0 mpg

The "vehicle inertia weight class" is defined in regulations prescribed by the Environmental
Protection Agency for purposes of title II of the Clean Air Act.
A qualifying hybrid vehicle is a motor vehicle that draws propulsion energy from on-board
sources of stored energy which are both: (1) an internal combustion engine or heat engine using
combustible fuel, and (2) a rechargeable energy storage system. A qualifying fuel cell vehicle is a
motor vehicle that is propelled by power derived from one or more cells which convert chemical
energy directly into electricity by combining oxygen with hydrogen fuel which is stored on board
the vehicle and mayor may not require reformation prior to use. A qualifying vehicle must meet
all applicable regulatory requirements.
Maximum available power means the maximum value available from the battery or other
energy storage device, during a standard power test, divided by the sum of the battery or other
energy storage device and the SAE net power of the heat engine.
These credits would be available for all qualifying light vehicles including cars, minivans,
sport utility vehicles, and light trucks. Taxpayers would be able to claim only one of the credits
per vehicle and taxpayers who claim either credit would not be able to claim the qualified electric
vehicle credit or the deduction for clean-fuel vehicle property for the same vehicle. Business
taxpayers claiming either credit would be subject to the limitations on the general business credit
and would be required to reduce the basis of the vehicle by the amount of the credit.

Investment Credit for Combined Heat and Power (CUP) Systems
Current law
Combined heat and power (CHP) systems are used to produce electricity (andlor
mechanical power) and usable thermal energy from a single primary energy source. Depreciation
allowances for CHP property vary by asset use and capacity. Assets employed in the production
of electricity used by the taxpayer in an industrial manufacturing process or plant activity (and not
ordinarily available for sale to others) have a general cost recovery period of 15 years if rated with
total capacity in excess of 500 kilowatts. Electricity production assets of lesser-rated capacity
generally are classified with other manufacturing assets and have cost recovery periods of five to
ten years. Assets used in the production of electricity for sale have either a IS-year or 20-year
recovery period. For assets that are structural components of buildings, however, the recovery
period is either 39 years (if nonresidential) or 27.5 years (if residential), and the straight-line
method for computing depreciation allowances must be used. For assets with recovery periods of
10 years or less, the 200 percent declining balance method may be used to compute depreciation
allowances. The 150 percent declining balance method may be used for assets with recovery
periods of 15 or 20 years. No income tax credit is provided currently for investment in combined
heat and power property.

Reasons for change
Combined heat and power systems utilize thermal energy that is otherwise wasted in
producing electricity by more conventional methods. CHP systems achieve a greater level of
overall energy efficiency, and thereby lessen the consumption of primary fossil fuels, lower total
energy costs, and reduce carbon emissions. An investment tax credit for CHP assets is expected
to encourage increased energy efficiency by accelerating planned investments and inducing
additional investments in such systems. The increased demand for CHP equipment should, in
tum, reduce CHP production costs and spur additional technological innovation in improved CHP
systems.

Proposal
The proposal would establish a 10-percent investment credit for qualified CHP systems
with an electrical capacity in excess of 50 kilowatts or with a capacity to produce mechanical
power in excess of 67 horsepower (or an equivalent combination of electrical and mechanical
energy capacities). CHP property would be defined as property comprising a system that uses the
same energy source for the simultaneous or sequential generation of (1) electricity or mechanical
shaft power (or both) and (2) steam or other forms of useful thermal energy (including heating
and cooling applications). A qualified CHP system would be required to produce at least 20
percent of its total useful energy in the form of thermal energy and at least 20 percent of its total
useful energy in the form of electrical or mechanical power (or a combination thereof) and would
also be required to satisfy an energy-efficiency standard. For CHP systems with an electrical
capacity in excess of 50 megawatts (or a mechanical energy capacity in excess of 67,000
horsepower), the total energy efficiency of the system would have to exceed 70 percent. For

smaller systems, the total energy efficiency would have to exceed 60 percent. For this purpose,
total energy efficiency would be calculated as the sum of the useful electrical, thermal, and
mechanical power produced by the system at normal operating rates, measured on a Btu basis,
divided by the lower heating value of the primary fuel source for the system supplied. The credit
would be allowed with respect to qualified CHP property only if its eligibility is verified under
regulations prescribed by the Secretary of the Treasury.
Investments in qualified CHP assets that are otherwise assigned cost recovery periods of
less than 15 years would be eligible for the credit, provided that the taxpayer elected to treat such
property as having a 22-year class life. Thus, regular tax depreciation allowances would be
calculated using a 15-year recovery period and the 150 percent declining balance method.
The credit would be treated as an energy credit under the investment credit component of
the section 38 general business credit, and would be subject to the rules and limitations governing
that credit. Taxpayers using the credit for CHP equipment would not be entitled to any other tax
credit for the same equipment.
The credit would apply to investments in CHP equipment placed in service after December
31,2001, but before January 1,2007.

Fr9fn: Department Of Treasury

2026221999

10/25/01 03:32 PM

Page 2 of 4

PUBLIC DEBT NEWS

~\l-P-h.'3 /).J?J.- "
/4~""'~\\--

Department of the Treasury • Bureau of the Public Debt· Washington, DC 20239

FOR IMlvfEPlATE RELEASE

Contact; Office of Financing
202-691-3550

June 15,2001

TREASURY'S INFLATION-INDEXED SECURITIES
JULy REFERENCE CPI NtJM:BERS AND DAlLY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and daily
index ratios for the month of July for the following Treasury inflation-indexed securities:

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)

3-3/8%)
3-5/8%
3-5/8%
3-5/8%

3-7/8%
3-7/8%
4-114%
3-112%

IO-year notes due January 15,2007
5-year notes due July 15,2002
10-year notes due January 15,2008
30-year bonds due April 15,2028
10-year notes due January 15, 2009
30-year bonds due April 15,2029
IO-year notes due January 15,2010
lO-yearnotes due January 15,2011

This information is based on the non-seasonally adjusted U.S. City Average All Items Consumer Price
Index. for All Urban Consumers (CPI-V) published by the Bureau of Labor Statistics of the U.S.
Departrrlent of Labor.

In addition to the publication of the reference CPI's (RefePI) and index ratios, this release
provides the non-seasonally adjusted CPI-U for the prior three-month period.
This information is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 and requesting document number 425. The information is also available
on the Internet at Public Debt's website (http://www.publicdebUreas.gov).
The infonnation for August is expected to be released on July 18, 2001.
000

Attachment

PO-42S

http://W1VW . p u blicdebt. tre:ls.gov

~
.....,

.....,

O"l

TREAf,URY INFLAtiON-INDEXED SECURITIES
Ref CPI and Indol( Ratios for
July 2001

Security:
Des<:ripllon:
CUSLP Number:
O~fed Dale:
Oriyinallssue Oala:
A[kHllon~llssue Oale(s}:

~318~'~ 1 O-YlKlr Na1ea
Silfies A-200r
912.8:272"'3
January 15, 1997
Febru3ry 6, 1997
April 15,1997

~s,re'~ 5-Ye<n "'(}~es
Serfas J-2DOZ
912827lA8
July is, 1997
July 15, 1~9r
October 15, 1!t97

l.4aturity D.rt~:
R;!f CPI 011 Dated Dale:

Janullry is, 20il7
156.43S4a

July 15,2002
16-0.1S4M

Date
July
July
July
July
July
July
July
July
July
July
July
July
July
July
July
July
JutJ
Jut"
Jut,..
Juty
Juty
July
July
July
July
July
July
July
July
July
July

1
2
J
~

5
6

7
6
9

ReCCPI
2001
2001
2001
2001
2001
2001
2001
2001
2001

10
11
12
13
14
IS
15
17
Iii
19

20~1

2Oll1

21
22
2)
24
25
26
21
2B

2001
2001
2001

2.9
:l{)

:11

M01
2001
20{) 1

176, !tOO{}{J
176.92581
17&,95161
17&.97742
177.00:12:1
177,02903
177.0s.4a4
171.080&5
177.10&45
177.132.26
177.15S06
177 .IB387
177.20968

2'O~1

177.2~S4a

2\]01
M01
MOl
2{JDl
2'001

177.26129
177.28710
117.312S{)
177.331l11
177.36-452
177,390n
177.416n
177.44194

2~HlI

2001
2001
2001
2001
2001
2001
2001

Inde~

Inckx Ra1lo

~e~,.

10-Year NolO1>
A·200S
911B273n
January 15, 1998
JanLJ..1ry 15, 1998
October 15, lSgS

~~II~{,

SeIi~

Bor0s of April lO2a
912810F[).5
April 15,1998
April 15, 1996
July 15,Im

January 15, 200B
161,554M

April 15,2026
161.74000

Index RiI1lo
1,()94SB
1.!l3S14
1.i)i:l530
1.09546
1.09562
1.09518
I,09SlM
1.09610
1.09616
1.09t;..42
1,0965.8
1.09674
1.09690
1.097Chi
1,097n
1.097;}l1
1.09754
1,09na
1.09186
1.09802
1,098113
1,0!t834
1,09850
1.U98{i6
1,0&832
1,09&911
1.09914
1,091130
1,09946
1. 0!t9t>"'1
1,099711

1.1 0472
1.104813
1.10W4
1.10520
1.10:.36
1.10552
1.105{;S
1.105.85
1.10601
1.106\7
1.106JJ
1.10649
1.10665
1.1~1

U(}{)g7
1.10113
1.10730
1,10746
1.10162
1.10776
1.10194
1.10810
1.1()826
1.10842
1.10MB
1.1()875
1.10-691
1.10007
1.10923
1.10939

1,11~6

1,12013
1,12029

177 .49355
177.51935
177.54516
In.51091
177.59671
In.6Z2S6
177.64<139
1n.67419

CD
CD
CD

1.1 ()455

1.11654
1.11671
1,116137
1.11703
1,11719
1.t1736
1.11752
1,117611
1,11785
I, 118~1
I, 11B 17
1.11&33
111850
1,11866
1.11882
1.11a99
1.11915
1,11931
1,11947
1,11964
1.11980

177.~774

Ra1lo

1.12045
1,120<)1
1,HOn
1,120S4
1.12110
1.12127
1.12143

JO--Year B<lnds

Index Rirllo

.."

1.09373
1.09389
1.0S405
1.0S421
1.09437

=
(1)

OJ
-,
M-

1.0~53

<"'T"

1.0!H69

a
-.,

1.{}~f5

....,
-,

1.09501
1,09517
1.095:>:1
1.08549
1.095&5
1,09580
1,09590
1.09612
1,0962a
1.0%44
1.0%6D
10%76
1.09{)92
1,097M
1,09724
1,09740
109756
1.09n2
1,097M
1 098~
1,09820
1,()9<l36
1,09852

(1)

C
-,
'<

<Sl

".....,
CJl

<Sl

=
G.)

.....,

G.)

-0
OJ

C.Q
(1)

CPI,U (NSA) tor:

March 2001

176.2

April 2001
------

176,9

G.)

May 2C><1I
_.

177,7

C>
-.,

..D.

,.....,
cSl
,.....,
,.....,

O'l

TREASURY INFLAtJoI·HNDEXED SECURITIES
Ret CPI and Index Ratios fOT
July 2001

~curity:

Ot'scrip1ion:
CUSI? Number.
Dated Dale:
Original Issue O";e:
Adcf1(ionallssu80aH(s):

)"71t1~·~ 10·Yoar Not~s
Serie<! A·2009
912f>274Y5
Janllary 15. 1993
January 15, 1~
July 15. 19s-g

Mat-urity Oat!!;
Rer CPI on Dated Gale:

Janu.ary 15. 2009
1M.aOOW

Dale
July
July
July
JU~i

July
July
July
July
July
July
JU~1

JU~i

July
July
July
July
July
July

1
2

5
6

7
6
9
10
11
1213
14
IS

16
17

Ju~>,

July
July

20
21
21

Ju~"

July
July
July
July
July
July
July
JUiy
Ju;y

23
24

25
Z'6

27
28
29
J{)

R~f

2001
2001
2aDi
2001
2001
2{]01
2001
~001

2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001

CPI

Index Rallo

176. 9{lOO a

1.07eS6
1.07682
1.01897
1.07913
1,07929
1,07945
1,07960
1,07976
1,01992
1.06007
1,06023
1.060:>9
1.06055
1.08070
1.080&6
I,OS102
108118
I.M1l3
108149
I.MI6S
I.08t8!
I.0819B
I.08212

176.91581
176,9-5161
176,91742
117,Q(}:!23
117.0290)
I 17.GS484
177,().8{) 65
177,1W4S
117.U2.26
177,15-806
177,18337
117,2'!)'Jo8
177,2S~8

In,2ii129
177.28710
177...31290
177.l1871
1 D.J1>452
177.:19032
177.4t61J
177.44194
177.4fi7H
177.49355
177,51935
177.5-4516
177.57097
177.59677
177.62.256
177.&43.39
177.67419

1.06228
1,06244
1.06259

1.0a275
1.08291
1.0d306
I,Dam
1,()&lJ6

3·718% 3D-Year Bonds
Bonds of April 2029
912SfOFH6
April 15, 1999
ApriI15.1~
Octo~r 15.1999
October 15. 2000
April 15. 20~
164.39111

Ind~x

Ratio

N
(0
(0
(0

4-1/4~/. 1(}'Vear Nates
Series A·20W
9126275W8
January 15. 20-0 a
JanuM)' 16.2000
July 15. :2.000

3-112% 10-Ye.lr Notes
Ser1es ".2011
gl2a276RtI
January 15, 2001
January 16, 2001

January 15.2010
168.24516

January 15.2011
174.04516

Inde:o: Ra1io

Inoox Rallo

\,...,

1.05144
1.05160
1.05175
1.0519>0
1.05205
1.052.21
1.05236
1.05252
1.05261
1.G5282
1,0529B
U)53 I 3
1.053.28

1.0!>Sd9

1,01640
1,01655
1.01670
1.01685
1.01700
1.01714
1.017Z9
1.01744
1.01759
I.D1174
1.01789
1.01603
1,01618
1,01833
1.01&48
1,01863
I.OliHe
1.0IB9'
1.01907
1.01922
1.01937
1.01952
1.01%6
1.0198 I
1,019905
1,0201 I
1,02025
1.02.0..1\
1,02.055
102070

l~a4

1.(j20~5

1,07606
1,07623
1.07639
1.07655
1,07671
1,07686
l,on02
1,01716
I.On3:!
1.01749
1.0n65
1.0n60
1.0D%
1.07612
1.07628
1.07843
1.07f159
1.07675
1,07&90
1,07006
1.07922
1.07937
1.0T9.53
1.0ro69
1.07985
1.0&QOO
1.0&Q16
1. ()8(}32
1.08041
1.()g{}63
1.08179

1.053-«
1.05359
1.05374
1.0539<J
1.0~G5

1.0S420
1.0543G
1.05451
1.054&6
1.0S4fl.2
1.05497
1.05512
1,05528
1.05543
1,0»55
1.05574

Cl
('0

-0

.,
Q)

!
I,

::::l
,....

Cl
.....,
-<
.,
('0
Q)

(f)

c::

......
'<

~
......

N
cJl

......
o

cSl
W
W

-u
:::::

-u

LQ
(1)

-j

L)
-j

1,
I

l.J

CPf.U (NSA) for :

March 2001

176.2

April 2001

176.g

May 2C>{)1

117,7

o......,

._-

I)EP~\RTMEN'I~

THE

TREASUClY

NEWS

TREASURY

OFFICE OF PUBLIC AFFA IRS. )500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON. D.C.- Z0l20. (ZOZ)

EKBAltGOEn UNTIL 2: 30 P _M.
JUne 14, 2001

CONTACT:

62l-2~60

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEElt .AND 26-WEEK BILLS
The Treasury ~11 auction two series of Treasury bi11s totaling
approximately $26,000 million to refund $19,789 million of publicly held
bills maturing JUne 21, 2001, and to ra~se about $6,211 million of new caSh.

:In addition to the public hOldings,Federal ~eserve Banks for their ~
accounts hold $9,667 million of the maturing bills; 1IThich may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
to $1,000 million in noncompetitive bids fram Poreign a:d Inter-

national Monetary Authority (FDlA) accounts bidding through the Federal.
Reserve Bank of New York will be included within the offering amount of eaCh

auction. ~hese noncompetitive bids will have a limit of $200 million per
account and ~ll be accepted in ~he order· of smallest to largest, up to the
aggregate award l±mit of $1,000 million.
~e4su~irect

customers have requested tha~ we reiuvest theix ma~uring
~11ion into the 13-week bill and $1,033

holdings of approximately $1,033
million i.nto the 26-week bill.

'J."hA al.location percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
~s offering of Treasury securities is governed by the t~s and conditions set forth in the Uniform Offering Circular for the Sale and Zssue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
ame~ed)

•

netails about each of the new securities are given in the attached
offering highlightS.
000

Attachment

PC-426

For pren releases, speeches, public schedules anti official bi()graphiu, CD-ll (JUT

24-hoUT fax

line at (202) 622-204()

HIGHLIGHTS O~ TREASURY OFFERINGS OF BILLS
TO BE ISSUED JUNE 21, 2001
June 14, 2001
Offering Amount ..••..••••..•...•.•••••. $14,000 million
$12,000 million
Public Offering ..•.•.•.•••••.....•••••. Offering amount less the amount awarded for PIMA aacounts
Description of Offering.
Term and type of security •.•••...•••...
CUSIP nUlTlber ...•...•••..••..•..•.•.••••
Auction date .••••••••••••••••••••••••••
Issue date .•...••••..•••••...•••.••••••
Maturity date •.•••••••.•••••••.•.•...••
Originel issue date •••••••••••••.••••..
Currently outstanding •.•••••••.••••.••.
Ninimurn bid amount and multiples •••••••

91-day bill
!J12795 HP 9
June 18, :ilOOl
June 21, 2001
September 20, 2001
March 22, 2001
$11,861 million
$1,000

182-day bill
912795 HY 0
June 18. 2001
June :U, 2001
Deoember 20, JOOl
June J1, 2001
$1,000

The following rules apply to all a.curities mentioned above:
submission of Bids:
Nonco~etitive bids I
Accepted in full up to $1 million at the highest discount rate of accepted
co~etitive bids.
Foreign and International Monetary Authority (PIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for PIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal
Reserve Banks ILS agents for FUlA accounts will not exceed 81,000 million. A single bid that ",ould
cause the limit to be exceeded \~ill be partially accepted in the amount that brings the aggregate award
total to the $1,000 million limit. However 1 if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bidsl
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g" 1.100%,

7.105%.
(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 $1 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 Rate •••• 35% of publio offering
NaximUJn A'lI'ard •••••••••••••• , ••••••••••••••• 35% of public offering
Receipt of Tenders.
Noncompetitive tenders ••• Prior to ll:OO noon eastern daylight saving time on auction day
Competitive tenders •••••• Prior to 1:00 p.m. eastern daylight 8~ving time on auction day
Payment Termsl By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
Tr.asu~Direct customers can use the p~ Direct feature which authorizQs a charge
to their account of record at their financial institution on issue date.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR 1M MEDIA TE RELEASE
June 13,2001

Contact: Peter Hollenbach
(202) 691-3502

BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BOND OWNERS
AFFECTED BY TROPICAL STORMS IN TEXAS
The Bureau of Public Debt took action to assist victims of severe weather in Texas 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
Texas affected by the stonns. These procedures will remain in effect through the end of July 200l.
Public Debt's action waives the nonnal six-month minimum holding period for Series EE and
Series I 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.
•
Texas counties involved are Anderson, Angelina, Brazoria, Cherokee, Chambers, Fort Bend,
Galveston, Hardin, Harris, Houston, Jasper, Jefferson, Leon, Liberty, Madison, Montgomery,
Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Smith, Trinity,
Tyler and Walker. 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 fonn PD-I048, available at most financial institutions or by writing the Kansas
City Federal Reserve Bank's Savings Bond Customer Service Department, 925 Grand Boulevard,
Kansas City, Missouri 64198; phone (816) 881-2000. This fonn can also be downloaded from
Public Debt's website at: www.publicdebUreas.gov. Bond owners should include as much
infonnation as possible about the lost bonds on the form. This infonnation should include how the
bonds were inscribed, social security number, approximate dates of issue, bond denominations and
serial numbers if available. The completed fonn must be certified by a notary public or an officer
of a financial institution. Completed fmms 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 word "DISASTER" on the front of their envelopes, to help expedite the processing
of claims.

000

PO-427

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR IMMEDIATE RELEASE
June 13,2001

Contact: Peter Hollenbach
(202) 691-3502

BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BOND OWNERS
AFFECTED BY TROPICAL STORMS IN LOUISIANA
The Bureau of Public Debt took action to assist victims of severe weather in Louisiana 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 Louisiana affected by the storms. These procedures will remain in effect through the end
ofJuly 2001.
Public Debt's action waives the nom1al six-month minimum holding period for Series EE and
Series I 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.
Louisiana parishes' involved are Ascension, Assumption, East Baton Rouge, Iberville, Lafayette,
Lafourche, Livingston, St. Martin, Terrebonne, and Vermillion. Should additional parishes 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 fonn PD-1048, available at most financial institutions or by writing the Kansas
City Federal Reserve Bank's Savings Bond Customer Service Department, 925 Grand Boulevard,
Kansas City, Missouri 64198; phone (816) 881-2000. This fonn can also be downloaded from
Public Debt's website at: www.publicdebUreas.gov. Bond owners should include as much
information as possible about the lost bonds on the form. This infonnation shou~d 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 fonns 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 word "DISASTER" on the front of their envelopes, to help expedite the processing
of claims.

000

PO-428

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
June 21, 2001
September 20, 2001
912795HP9

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.435%

Investment Rate 1/:

3.512%

Price:

99.132

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted
5.85%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

28,147,856
1,331,014
170,000

14,000,420 2/

29,648,870

SUBTOTAL

TOTAL

4,758,920

Federal Reserve
$

34,407,790

12,499,406
1,331,014
170,000

18,759,340

Median rate
3.410%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.350%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

29,648,870 / 14,000,420

2.12

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,117,487,000

http://www.publicdebt.treas.gov

PO-429

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
June 21, 2001
December 20, 2001
912795HYO

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.380%

Investment Rate 1/:

3.487%

Price:

98.291

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 70.06%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive

24,614,193
1,324,628

4,908,563

Federal Reserve
$

30,847,384

10,675,393
1,324,628
12,000,021 2/

25,938,821

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

16,908,584

Median rate
3.360%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.330%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BIO-TO-COVER RATIO = 25,938,821 / 12,000,021 = 2.16
NO FIMA NONCOMPETITVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,086,852,000

http://www.publicdebt.treas.gov

PO-430

DEPARTMENT

'IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

EMBARGOED UNTIL 2:30 P.M. EDT
June 19,2001

Contact: Tony Fratto
(202) 622-2960

STATEMENT OF JOHN B. TAYLOR UNDER SECRETARY, INTERNATIONAL
AFFAIRS DEPARTMENT OF THE TREASURY BEFORE THE SUBCOMMITTEE ON
INTERNATIONAL TRADE AND FINANCE COMMITTEE ON BANKING, HOUSING,
AND URBAN AFFAIRS UNITED STATES SENATE

Mr. Chainnan and Members of the Subcommittee:
Thank you for the opportunity to discuss the reauthorization of the Export-Import Bank
(Ex1m) of the United States. Treasury has an important role in the formulation and
implementation of policy related to Ex1m and I look forward to working with Ex1m's new
chairman, John Robson, in this regard. Treasury works closely with Ex1m to ensure that
international financing rules are developed to limit the scope for foreign export financing
subsidies. Treasury also works with Ex1m to ensure that its programs and policies are consistent
with the United States government's broader international economic and financial policies.
Treasury chairs the interagency National Advisory Council (NAC) that reviews U.S.
international economic policies and also individual Ex1m transactions.
The Administration supports a clean reauthorization bill without amendment. It is
important for the Administration to have time to assess the institution and draw its own
conclusions about how well Ex1m works in supporting U.S. exports, and what, if any,
adjustments to its charter may be necessary. The request is for a four-year reauthorization; if, in
the course of our analysis, we conclude that changes in its charter are necessary, we are prepared
to seek additional legislation at that time.
The purpose of Ex1m is to aid in the financing and promotion of U.S. exports, which are a
vital component of the U.S. economy. Ex1m accomplishes this objective in several ways: it
assumes commercial and political risks that exporters or private institutions are unwilling to take;
it assists U.S. exporters to compete on a level playing field when faced with govemmentsubsidized foreign export credit competition; and it provides leadership and guidance in export
financing, especially for small and medium-sized U.S. exporters.
PO-431

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

The 2002 budget proposes a 25 percent decrease in program budget resources, in part to
reflect lower estimates of international lending risk. This means that Ex1m will be able to
support more exports per budget dollar than in the past. The administration believes that Ex 1m
can continue to support exporters facing subsidized competition through policy changes that
further target assistance on exporters who cannot obtain private sector financing when competing
with foreign subsidies. It is important that Exlm' s programs foster greater levels of un-subsidized
competition in the international market for exported goods, where U.S. companies will be able to
compete freely and most successfully.
Exports have been one of the key engines of economic growth in the United States over
the last two decades as globalization has accelerated. Our export growth in recent years has
outstripped domestic growth, and exports have risen as a share of GDP. The U.S. jobs that
exports generate are, on average, higher skill and higher wage jobs than in the economy at large.
These trends will continue in the future so exports and Exlm will remain a high priority for the
Administration.
Ex1m advances the Administration's pro-export agenda in two very specific ways. First,
it ensures that the official export credit agencies (ECAs) that other governments have in place do
not provide foreign exporters a competitive advantage in international export competitions
Second, because Exlm exists, the United States has a seat at the international table that sets rules
for how official export financing operates. These rules are made in the OECD by the countries
that are the Participants to the Arrangement on Guidelines for Officially Supported Export
Credits (Arrangement). This is an arrangement among nations that provide the vast bulk of
official export financing for capital goods to developing countries. These rules, which are
embodied in the OECD Arrangement, are critical to ensuring that the export financing provided
by governments promotes market principles and fair competition.
U.S. Export Financing Philosophy and the Role ofthe OECD Arrangement
Reducing export financing subsidies is critically important from an international policy
perspective because they distort trade in favor of firms in those countries offering subsidies. By
distorting trade flows, they also distort the global allocation of resources and reduce international
economic efficiency. Moreover, subsidized exports disadvantage U.S. exporters because other
governments budget proportionately more resources for export subsidies than does the United
States.
Limiting these subsidies is also extremely important from a budget point of view. Simply
put, these subsidies drain the budget.

The OEeD Arrangement embodies agreed mles that provide international financing
disciplines. The Arrangement plays an important role in the overall U.S. strategy to promote free
trade by reducing export subsidies in the international arena. It complements the WTO antisubsidy mles - specifically, by reducing export-financing subsidies. The United States has used
the Arrangement to build an international mle-based system of limits on export subsidies.
The WTO does not restrict the use of aid-financed subsidies because resource transfers to
LDCs are important for their development. The United States uses the OECD Arrangement to
ensure aid- financed subsidies are really development aid and not export promotion in disguise.
Treasury leads the U.S. delegation to negotiations of the OECD Arrangement. Finance
Ministries normally lead this OECD policy-making body. ExIm's representative sits next to
Treasury in virtually all OECD negotiations.
Let me provide two examples of how the OEeD Arrangement limits subsidies:
Limits on Interest Rate Subsidies
Under an agreement negotiated in the 1980s, the Arrangement ensures that interest rates
offered by ECAs are full 100 basis points above the cost of funds to governments. This means
that exporters compete on the basis of the quality and pricing of their goods and services, and not
on the basis of the most favorable officially supported financing terms. It also reduces the
likelihood that commercial banks are systematically undercut by subsidized financing. Annual
appropriations that ExIm now requires for any given level of exports are hundreds of millions of
dollars lower than they would be without these disciplines on interest rate subsidies.
Reductions in Tied Aid
The OEeD Arrangement also limits the use of tied aid. Tied aid is subsidized financing
that is offered in the name of economic development but is tied, or linked, to procurement from a
firm in the donor country. For instance, tied aid is offered by the Japan Bank for International
Cooperation. Tied aid can arbitrarily close markets to efficient exporters, and misallocate global
resources.
The benefits of negotiating and enforcing international restrictions on the use of tied aid
are clear. In 1991, before the OECD tied aid rules, traditional tied aid donors reported almost
$9 billion of tied aid. In 2000, these same donors reported only $1.8 billion of tied aid -- an 80%
reduction. (These tied aid figures overstate the actual volume of tied aid flows. These tied aid
figures are based on OECD notifications of intended offers of tied aid. A significant number of
these credits have been deemed ineligible for tied aid under the OECD Arrangement and
abandoned. )
When one adds in the tied aid now offered by Japan, the figure for overall tied aid is
approximately $5.5 billion. However, the Japanese component ofthis figure appears to represent
a shift from one type of potentially trade distorting aid - untied aid - to another -- tied aid.

From a policy perspective, this shift in Japanese aid has not increased the overall
amount of potential trade distortions but rather shifted it from one official category to another.
Therefore, this shift does not offset the large reductions in trade distortions achieved in the
programs of the traditional tied aid donors.
Tied aid is now focused on the poorer LDCs, those with per capita incomes below $3,000
annually. Wealthier countries like Mexico, Korea and Malaysia are no longer eligible for tied
aid. Tied aid is now virtually non-existent in projects for manufacturing, power (thermal and
hydro), oil and gas pipelines, telecommunications, and sophisticated air traffic control
equipment. This has opened up these sectors to U.S. exporters to compete for commercial
contracts. Treasury has previously estimated that as the result of reducing tied aid trade
distortions, U.S. exports are higher by $1 billion a year than they would have been without the
Arrangement disciplines.
To better appreciate the impact of this policy success, if the U.S. had been required to
compete for these additional exports using tied aid instead of having negotiated OECD
restrictions for tied aid, Exlm would have required about $300 million annually in additional
appropriations - a cumulative total of $2.4 billion of additional appropriations since 1993, the
first full year of implementation of the tied aid rules.
The OECD tied aid rules have been tremendously successful in significantly narrowing
the scope for tied aid - thereby reducing trade distortions, leveling the playing field for U.S.
exporters, reducing budget pressures, and promoting a much more appropriate use of aid
resources.
Treasury continues to work very closely with Exlm on tied aid issues. This work
includes negotiating Arrangement agreements, implementing and policing these agreements, and
ensuring that tied aid that meets the OECD rules is not being used to undermine the long-term
competitiveness of U.S. exporters for commercial sales. In carrying out our tied aid work we
also work closely with ExIm in use of the Tied Aid Capital Projects Fund (War Chest).
Future Plans
With tied aid significantly disciplined, Treasury is now focusing on two new forms of
trade distortions that arise in export financing: untied aid and market windows.
1) Untied Aid
These distortions can occur even if aid is not legally tied to donor country firms - the
case of so -called "untied aid." Currently, untied aid is exempt from the tied aid rules solely
because the donor government does not directly tie procurement to its firms. With untied aid,
procurement is effectively tied to firms from the donor country in a variety of less direct ways.

The requirement that the aid recipient use the design and engineering work for a project
provided by firms in the donor country biases the choice of technologies in favor of donor firms.
Similarly, the requirement by the donor that one if its firms run the bidding process, including
qualifying bidders, evaluating bids, and awarding bids, can create bias in favor of firms from the
donor country. Finally, the aid relationship itself encourages the recipient to reward the donor by
selecting its firms in an effort to ensure the continued flow of this aid financing in the future.
Nevertheless, in spite of these biases, untied aid remains free to finance projects that tied
aid cannot - including commercially viable projects, and projects in countries with per capita
income above $3,000.
There are no OEeD rules on what procedures, practices and procurement results
constitute untied aid - de facto - for purposes of being exempt from the tied aid disciplines
intended to open markets and reduce trade distortions. U.S. exporters are concerned that untied
aid programs are not always freely available to finance exports from other countries calling into
question whether untied aid should continue to be exempt from Arrangement rules that govern
the proper use of aid.
Without Arrangement disciplines, untied aid can be used to circumvent the tied aid rules
and distort trade and misallocate global resources. Perhaps more importantly, without disciplines
on untied aid, existing tied aid donors could "untie" their aid programs and escape the existing
tied aid disciplines. This would put the U.S. back in the situation we faced in the early 1980s
when aid was used to systematically distort trade. In fact, there is a strong financial incentive for
tied aid donors to "untie" aid because the minimum concessionality - the budget sacrifice -required for untied aid is approximately half that required for tied aid - about 17% vs. 35% of
the credit's value. Therefore, untied aid requires no more budget sacrifice now than tied aid did
prior to Reagan-era OECD negotiations that increased these concessionality requirements.
Recognizing the many indirect biases in procurement decisions that can arise with untied
aid financing, Treasury formally proposed in the OEeD to extend the highly successful tied aid
disciplines to untied aid. This would ensure that tied aid and untied aid are available for the
same types of projects in the same countries. Treasury is now working to build support within
the OECD for this proposal.
2) Market windows
Market windows are another threat to the longer-term integrity of existing OECD
disciplines. Market windows are quasi-official institutions that support national exports. The
two largest are KfW of Germany and EDC of Canada. Because Market window institutions
purport to operate as private sector actors, there is currently no agreement in the OECD to
discipline them or to provide transparency concerning the terms and conditions of this financing.
Treasury plans to begin a major push in the OECD on Market window transparency this Fall.
We also will work with ExIm and OMB to undertake our own analysis of Market windows. We
will then work to design and negotiate appropriate Arrangement disciplines for these institutions.

Conclusion
In summary, in this testimony, I have tried to review the role of Treasury in working
through the OECD and with ExIm to reduce the amount of trade distorting subsidies in the
world. We at Treasury look forward to working closely with Chairman Robson - a former
Deputy Treasury Secretary - to look for and reduce new forms of export financing subsidies and
trade distortions.

DEPARTMENT

THE

TREASURY

NEWS

'IREASURY

~--------~~----

OrnCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

U.S. International Reserve Position

6/19/01

u.s.

The Treasury Department today released
reserve assets data for the week ending June 15,2001. As indicated in this
table,
reserve assets totaled $65,069 million as of June 15,2001, up from $65,012 million as of

u.s.

June 8,2001.

(in US millions)

l. Official U.S. Reserve Assets
TOTAL
1. Foreign Currency Reserves
a. Securities

June 8: 2001

June 15: 2001

65,012

65,069

5,090

Yen
10,929

8,619

4,731

Euro

Of which, issuer headquartered in the U. S.

b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.
b.iir. Of which, banks located in the U.S.

2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

5. Other Reserve Assets

TOTAL

Euro

Yerr

TOTAL

16,018
0

5,171

10,718

15,889
0

13,350
0
0

8,751

4,640

0
0

13,391
0
0
0
0

14,148

14,232

10,450

10,512

11,046

2J The items, "2. IMF Reserve POSition" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for June 8 are final. The entries in the table above
for June 15 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.

31 Gold stock is valued monthly at $42.2221 per fine troy ounce. Values shown are as of April 30, 2001. The March 31,2001 value was
$11,046 million.

PO-432

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
June 8, 2001
1. Foreign currency loans and securities

June 15, 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Sholt positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
June 8, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headqualtered in the U. S.
3.e. With banks and other financial institutions
headquartered outside the U.S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Sholt positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b. 1. Bought calls
4.b.2. Written puts

June 15, 2001

o
o

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

For immediate release -June 19,2001

Contact: Rob Nichols
(202) 622-2920

O'Neill Divestiture is Complete
Today Secretary O'Neill's financial advisors completed the sale of all of his
shareholdings including his Alcoa stock and options. In accordance with the time span for
divestiture that is established by the Office of Government Ethics regulations (within 90 days of
the ethics commitment to divest), the Secretary had until June 22, 2001 to complete the
divestiture. The Secretary's assets will be invested in diversified investment funds.

--30--

PO-433

Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

DEPARTMENT

THE

TREASURY

NEWS

TREASURY

OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- 20220 _ (202) 622-2960

EMBARGOED UNTIL 9:00 A.M.
June 20, 2001

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On June 21, 2001, the Treasury will buy back up to $1,750 million par
of its outstanding issues that mature between February 2015 and August 2019.
Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conducted by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers on
behalf of themselves and their customers. Offers at the highest accepted
price for a particular issue may be accepted on a prorated basis, rounded up
to the next $100,000. As a result of this rounding, the Treasury may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issues are given
in the attached highlights.
000

Attachment

PO-434

For press releases, speeches, public schedules and official biographies, call our 2-1-hour fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
June 20, 2001
Par amount to be bought back .••• Up to $1,750 million
Operation date ..•...•...•••.•••. JUne 21, 2001
Operation close time .•.•.••••••• 11:00 a.m. eastern daylight saving time
Settlement date ••••..•••••••.••• June 25, 2001
Minimum par offer amount ••••••• $100,000
Multiples of par ••..••••.••..•• $100,000
Format for offers •••.. Expressed in terms of price per $100 of par with
three decimals. The first two decimals represent
fractional 32 nds of a dollar. The third decimal
represents eighths of a 32 nd of a dollar, and must
be a 0, 2, 4, or 6.
Delivery instructions .•••.••..•• ABA Number 021001208 FRB NYC/CUST
Treasury issues eligible for debt buyback operation (in millions):

Coupon
Rate (%)
11. 250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125

Maturity
Date
02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019

CUSIP
Number
912810 DP
912810 DS
912810 DT
912810 DV
912810 DW
912810 DX
912810 DY
912810 DZ
912810 EA
912810 EB
912810 EC
912810 ED
Total

0
4
2
7
5
3
1
8
2
0
8
6

Par Amount
Outstanding*
11,326
5,061
5,857
5,887
18,824
18,824
16,287
12,339
7,072
7,614
15,307
19,281
143,679

Par Amount
Privately
Held*
9,480
3,894
4,850
4,850
17,724
17,168
13,532
10,281
5,833
6,734
12,934
16,741
124,021

Par Amount
Held as
STRIPS**
4,132
1,602
2,795
551
303
1,460
7,220
2,742
4,250
3,956
5,880
1,155
36,046

* Par amounts are as of June 19, 2001.
** Par amounts are as of June 18, 2001.
The difference between the par amount outstanding and the par amount
privately held is the par amount of those issues held by the Federal
Reserve System.

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

EMBARGOED UNTIL 3:00 P.M. EDT
June 20, 2001

Contact: Tony Fratto
(202) 622-2960

TESTIMONY OF DONALD V. HAMMOND FISCAL ASSISTANT SECRETARY
U.S. DEPARTMENT OF THE TREASURY BEFORE THE
HOUSE COMMITTEE ON BANKING AND FINANCIAL SERVICES
SUBCOMMITTEE ON GENERAL OVERSIGHT AND INVESTIGATIONS

INTRODUCTION

Chairwoman Kelly and Members of the Subcommittee, thank you for the opportunity to
appear before you today to discuss Treasury's efforts to implement the electronic funds transfer
(EFT) requirement of the Debt Collection Improvement Act of 1996 (the DCJA). The DCJA
requires the Federal government to issue most payments, except tax refunds, via EFT after
January 1, 1999 and gives the Secretary of the Treasury the authority to prescribe regulations and
to grant waivers from the requirement to receive payments electronically. The DeJA also directs
Treasury to ensure that any recipients who are required to receive payment electronically have
access to an account at a financial institution at a reasonable cost and with the same consumer
protections as other account holders at the same financial institution.

We believe the program thus far has been very successful resulting in approximately
eighty percent of all Federal payments currently being made electronically and generating
considerable efficiencies for the Federal government, financial institutions and payment
recipients. In fact, the reduction in the number of check payments alone since the end ofFY'95
has saved the Federal government almost $250 million and will generate recurring savings each
year. We expect to expand on these accomplishments by increasing our percentage of electronic

PO-435

1
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
~

We expect to expand on these accomplishments by increasing our percentage of
electronic payments in the future.

I commend the Subcommittee for its continued interest in and support of increasing the
government's usage of electronic payments in a way that balances the interests of our payment
recipients and the cost of government operations. Treasury intends to continue with the
implementation ofthis important initiative in the same manner going forward.

BACKGROUND

Treasury has been making electronic payments since the 1970s when it began an EFT
program known as Direct Deposit, an electronic payment method used largely by individuals
receiving benefit, salary, and other Federal payments. In the intervening years, EFT payments
have expanded to include electronic wire transfers and card and other emerging technology
electronic payments. In the fiscal year preceding the DCIA (FY'95), approximately half of all
Treasury disbursed Federal payments were made electronically.

In April 1996, the DCIA was enacted into law. Under the DCIA, agencies were required
to convert from paper-based payment methods to EFT in two phases in accordance with
regulations to be issued by the Treasury. These regulations were issued on July 26, 1996 and
September 25, 1998. During the first phase, recipients who became eligible to receive Federal
payments on or after July 26, 1996 were required to receive such payments electronically subject
to waivers under the Act. The July 26, 1996 interim rule, which was in effect through January 1,
1999, implemented this requirement.

The second phase began on January 2, 1999. Beginning on that date, all Federal
payments, except payments under the Internal Revenue Code, are to be made by EFT unless
eligible for a regulatory waiver.

We expect to expand on these accomplishments by increasing our percentage of
electronic payments in the future.

I commend the Subcommittee for its continued interest in and support of increasing the
government's usage of electronic payments in a way that balances the interests of our payment
recipients and the cost of government operations. Treasury intends to continue with the
implementation of this important initiative in the same manner going forward.

BACKGROUND
Treasury has been making electronic payments since the 1970s when it began an EFT
program known as Direct Deposit, an electronic payment method used largely by individuals
receiving benefit, salary, and other Federal payments. In the intervening years, EFT payments
have expanded to include electronic wire transfers and card and other emerging technology
electronic payments. In the fiscal year preceding the DCIA (FY'95), approximately half of all
Treasury disbursed Federal payments were made electronically.

In April 1996, the DCIA was enacted into law. Under the DCIA, agencies were required
to convert from paper-based payment methods to EFT in two phases in accordance with
regulations to be issued by the Treasury. These regulations were issued on July 26, 1996 and
September 25, 1998. During the first phase, recipients who became eligible to receive Federal
payments on or after July 26, 1996 were required to receive such payments electronically subject
to waivers under the Act. The July 26,1996 interim rule, which was in effect through January 1,
1999, implemented this requirement.

On September 25, 1998, Treasury published in the Federal Register a final rule [31 CFR
Part 208 (EFT rule)] prescribing the implementation of the program effective January 2,1999.
The EFT rule was issued after consideration of testimony received at four (4) public hearings and
review of 212 comment letters received from financial institutions, consumer and community
based-organizations, Federal payment recipients, and other key stakeholders.

The EFT rule establishes the circumstances under which waivers are available, provides
certain requirements for accounts to which Federal payments may be sent electronically, and sets
forth the responsibilities of Federal agencies and recipients under the regulation. The rule also
provides that any individual who receives a Federal benefit, wage, salary, or retirement payment
is eligible to open a low-cost account designed by Treasury, called the Electronic Transfer
Account (ETA), at a financial institution that offers such accounts. I will be discussing the ETA
in more detail later in my testimony.

In developing the EFT rule, Treasury followed four principles: (1) the interests of
recipients should be of paramount importance; (2) Treasury's policies should maximize private
sector competition for the business of handling Federal payments in order to promote the greatest
possible convenience, flexibility, efficiency, and security; (3) recipients, especially those having
special needs, should not be disadvantaged by the transition to EFT; and (4) recipients without
accounts at financial institutions should be brought into the mainstream of the financial system to
the greatest extent possible.

The EFT rule emphasizes recipient choice through an accommodative waiver policy
formulated for the purpose of minimizing hardships to Federal payment recipients. Any
individual Federal payment recipient may invoke a hardship waiver and continue receiving a
check. Payment recipients assess their own eligibility for a hardship waiver. Moreover, agencies
are prohibited from withholding, suspending, or delaying a payment if a recipient does not
designate a financial institution into which electronic payment may be sent and does not actively
invoke a hardship waiver. Treasury is confident that this balanced approach supports the goals of
the program as more and more individuals become familiar with EFT over time.
3

On September 25, 1998, Treasury published in the Federal Register a final rule [31 CFR
Part 208 (EFT rule)] prescribing the implementation of the program effective January 2, 1999.
The EFT rule was issued after consideration of testimony received at four (4) public hearings and
review of212 comment letters received from financial institutions, consumer and community
based-organizations, Federal payment recipients, and other key stakeholders.

Indeed, the widespread use of EFT by Social Security recipients and other Federal
benefit recipients indicates broad acceptance of EFT by the public.

EFT99 RESULTS TO DATE

Electronic Funds Transfers (EFT)

Treasury makes approximately 85% of all Federal government payments, with the
remaining payments being made primarily by the Department of Defense. As a result of the
DeIA and Treasury's and other agencies' education and outreach programs, the government has
made tremendous progress in the conversion of check payments to EFT among Treasury and
non-Treasury disbursed agencies. In FY 2000, the Federal government issued over one billion
payments on behalf of civilian and defense agencies, including benefit, salary and vendor
payments as well as tax refunds, grants, loans, and other payments. Seventy-nine percent (79%)
of those payments were electronic payments.

Federal payments are being made electronically in remarkable numbers, as evidenced by
the following:

Today, nearly eight out of every ten Social Security (SSA) and Veterans Administration
benefit payments, and 98 percent of all Federal salary payments are made electronically.

Newly eligible SSA beneficiaries are enrolling in EFT at a rate of approximately 85
percent.

The number of Federal vendor payments made electronically has grown to 82 percent
from only 10 percent for FY 1995.

Half of all Supplemental Security Income payments are currently made electronically
compared to 24 percent for FY1995. These payments are issued primarily to a population
that has traditionally been unbanked.

Even the percentage of Federal tax refund payments made electronically, payments not
required by the DeIA to be made electronically, have more than tripled since the
beginning of the program with 29 percent being made electronically in FY2000,
compared to eight percent for FY 1995.

FY 1995

FY 2001 through April 2001

Salary

90%

98%

Benefit Payments

54%

75%

Vendor Payments

10%

59%

Miscellaneous Payments

30%

43%

55%

76%

Tax Payments

29% (FY'OOactual)

DOD Disbursed Payments

86%

96%

63%

80%

Treasury Disbursed Payments

Total Treasury-Disbursed
Payments, Excluding Tax
Payments

Total Government-wide
Payments

We attribute our success to our public education effort, our efforts to publicize and
explain the requirements of the DCIA and Treasury rules to key stakeholders, and our efforts to
assist agencies operationally in converting more payments to EFT.

Electronic Transfer Account (ETA)

The most complex and challenging task that has confronted us in increasing the number
of EFT payments is how to meet the needs of the millions Federal payment recipients who do not
have an account at a financial institution. Despite our waiver policy, in keeping with the DCIA's
intent for access to a reasonable cost account, Treasury designed the low cost Electronic Transfer
Account, or the ETA. The ETA is being voluntarily offered by federally insured financial
institutions that choose to offer the account subject to the specifications prescribed by Treasury.

Treasury is committed to providing opportunities for those individuals without an
account at a financial institution, thus allowing them to join the financial services mainstream
and receive the benefits of electronic payment. We consider the ETA to be an important
potential stepping stone to full service banking relationships while providing a safe, reliable, and
low-cost alternative to recipients who receive federal benefits.

We anticipate that we will have a national presence of over 600 ETA providers with more
than 16,000 locations by the end of this year. Some of the larger certified ETA provider banks,
including Firstar, FleetBoston, Banco Popular, and Fifth Third Bank, have rolled out the ETA in
all of their branches. Well Fargo has rolled out the ETA in all branches except those in
California. Bank One will complete its roll out by October ofthis year. Also by October, Bank
of America will offer the ETA at all of its 4,400 locations in 21 states and the District of
Columbia. Firstar, recently merged with US Bank Corp, anticipates it will begin offering the
ET A in its US Bank branches by the end of the year.

As of April 2001, Federal payment recipients have opened 10,913 ETAs. We project that
the number of ETAs opened will gradually increase over the next few months with more
substantial increases next year for the following reasons:

As I mentioned a moment ago, several large financial institutions with multiple locations

will be coming on board over the next six months, thus increasing coverage across the country
and in the ten top check volume states.

Awareness of the availability and benefits ofthe ETA will continue to grow among

Federal benefit check recipients as a result of the distribution of approximately 10 million ETA
check inserts which promote Direct Deposit and the ETA as alternatives to receiving checks.
Additional ETA check inserts will be sent to recipients in locations where ETA providers begin
offering the ETA.

SSA sent direct mailings to approximately 1.8 million check recipients in nine states in

November 2000 and April 2001. Another 850,000 check recipients in five additional states are
scheduled to receive letters in June ofthis year. These letters promote both Direct Deposit and
the ETA as alternatives to receiving checks. For example, the SSA direct mailings to one million
recipients in Illinois, Iowa, and Kentucky in November 2000 resulted in about 35,000 new EFT
enrollments
It is important to realize that Treasury's major objective is to increase EFT payments and to

reduce the number of paper checks issued, and this objective is being achieved. The ETA is a means
to achieve this end. Based on anecdotal feedback from some ETA providers, many individuals
eligible to open an ETA may be choosing instead to open a traditional account, and this is also a
favorable result.

PUBLIC EDUCATION

In FY 1997, Treasury began developing a comprehensive public awareness and education
campaign to inform Federal payment recipients of their options under the EFT legislation and to
promote the safety and reliability of EFT. The components of the campaign included
development and distribution of printed materials, an educational video, public service
advertising for radio, television, and print media, public relations activities, and a precedent
setting grassroots community outreach initiative.

To expand EFT99 public awareness to a grassroots level, Treasury developed a regional
network for its public education efforts. Treasury and contractor personnel, as well as five
competitively selected community-based organizations, were established on-site in each of five
regions of the country to work with local grassroots organizations on how to promote EFT as
well as basic financial skills to their constituents. More than 1,400 local organization training
sessions and 3,500 consumer sessions have been held throughout the grassroots campaign.

More than 12 million copies of various educational and marketing materials have been
distributed throughout the campaign. One product, a financial literacy handbook, was developed
in conjunction with the Financial Services Education Coalition that was formed as a result of the
EFT99 initiative and distributed to thousands of communities across the nation. Representatives
from community-based organizations, financial trade associations, and government agencies
jointly developed this basic financial services training kit for local community educators to use at
the grassroots level in educating Federal payment recipients on how to use mainstream banking
servIces.

With regard to ETA specific activities, during the past 18 months we have worked to
bring together both ETA providers and local community-based organizations to encourage
collaborative marketing opportunities for reaching potential ETA customers.

Community outreach enables us to reach more individuals to promote the benefits and
availability of the Direct Deposit and the ETA. In addition, Treasury has already mailed
approximately 10 million ETA inserts with benefit checks to recipients in 28 states and Puerto
Rico during the past 18 months. We anticipate that additional ETA check inserts will be sent to
recipients in new states as more ETA provider branch locations begin to offer the ETA.

We also continue to meet regularly with SSA on EFT99 issues and worked with the
agency to develop a letter to its benefit check recipients encouraging the use of Direct Deposit
for those individuals who have bank accounts and the ETA for those who do not currently have
or have been unable to obtain an account. As mentioned previously, more than 1.8 million letters
have been sent to nine states, with additional mailings planned for later this year. We are
encouraging SSA to continue its direct mail campaign to check recipients in additional states.

In addition, among other activities, Treasury is:
X

maintaining a website on the EFT requirement and the ETA program;

continuing ongoing efforts to promote Direct Deposit including providing materials to
financial institutions, Federal agencies, and the public;

speaking and exhibiting at conferences and other forums on the benefits of Direct Deposit
and the ETA;

publishing EFTlET A newsletters for financial institutions, community organizations and
other stakeholders; and

continuing to assist certified and potential ETA providers in implementing the ETA
program.

PROGRAM COSTS AND SA VINGS

Costs to implement EFT99, including portions of the ETA program, from FY1997 to
FY2001 are approximately $21 million. The public education campaign that I just
described has cost approximately $18 million over the past five years, with most of those
funds used in the first three years of the campaign.
9

The remaining funds have been used to develop and publish Treasury's EFT rule and ETA
account attributes; educate Federal agencies and other key stakeholders on the EFT rule and ETA
features; and work with and assist financial institutions offering the ETA.

Specifically for the ETA, amounts spent as reimbursement to ETA providers for account
setup costs totaled approximately $98,000 in FY2000 and are projected to be $155,040 in
FY2001. In addition, the Federal Reserve Bank (FRB) of Dallas, in its capacity as fiscal agent,
enrolls financial institutions in the ETA Program, has created a database of financial institutions
that have been certified as ETA Providers, and manages an Internet web site, an ETA Call
Center, and a Voice Response Unit, a toll-free telephone number that can be used to obtain
locations of ETA providers by five digit zip code. Costs, including the cost to develop and
maintain the database, website, call center and VRU, totaled slightly more than $2.7 million
through May of this year.

Therefore total program costs through May 2001 have been $24 million.

What have we received from these expenditures? Since FY1995, annual Treasurydisbursed check volume has decreased by more than 140 million checks. Based on the
differential between the cost of making a check payment and the cost of making an EFT payment
this decrease has resulted in cumulative savings to date from increased electronic payments of
nearly $250 million. In addition to the savings already received, since these payments continue
on into the future, recurring savings will result for the life of the payment stream. Based on
current check volume percentages when compared to where we were at the end ofFY'95, we
estimate recurring, annual federal government savings of approximately $70 million per year.
These savings were estimated on the assumption that the level of electronic payments will remain
constant. Obviously, we plan on doing better than that. Additional savings to be realized from
the ETA will accrue over time as savings from the conversion to EFT surpass initial ETA start up
costs. These costs include $12.60 paid to financial institutions per account opened as a
reimbursement for account setup. Treasury expects to recoup that cost for each account in

approximately two and one half years after it is opened, based on a monthly EFT conversion
savings per account of slightly more than 41 cents.

Additionally, since check volume has decreased generally, the number of Treasury
disbursed forged, altered, and counterfeit checks has decreased by nearly 79,000 since FY 1995.
This has resulted in a cumulative $41 million dollar decrease in potential losses associated with
check fraud.

CONCLUSION

In conclusion, overall EFT99 implementation has been a tremendous success and
continues to proceed well. Implementing the program provides us an important opportunity to
deliver the high quality of service that our customers deserve, lower the cost of government to
American taxpayers, and help Federal payment recipients without accounts take advantage of the
benefits of electronic payments.

I appreciate the opportunity to report on the progress of the EFT99 program and I will be
pleased to answer any questions the Subcommittee may have.

D EPA R T l\l E N T

0 F

THE

TREASURY

T REA S {] R Y

NEWS

OFFICE OF PUBLIC An'AIRS -1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.- ZOllO _ (202) 622-2"0

KBARGOED tDiTI:L 2:30 P.X.
\me 20,

COli'l'ACT:

2001.

Office of Financing

202/691-3550
TR.EAStJRy TO AtrC'l'ION $1.1, 000 KJ:LLION OF 2 - YEAR. N'O"rES

The Treasury will auction $11,000 million of 2-year notes to refund $271~6
illion of publicly hellil notes maturing Juue 30, 2001, and to pay clown about $~6,ll6
ill.ion.
In addition to the public holliliugs,

Fede~al Res6~e

Banks hold ,$6,167 mi11ion

f t.ha maeuring notes for their own acco'I.).%Lu, which may be refunded by issui.ng

n additional amcune of the new secu;r;ity.

up to $1,000

in noncampeti~ive bids fram Foreign and Iuternational.
accounts bidding :hrough the J'ederal R.eserve Bank of )few
ork rill be included vith:.i.n the of£er:ing amount: of ehe auction. These
oncCl2llpeUtive bids wi 11. have a limit of $200 millieu per account aAci will be
~cepeed in the or~r of smallest to largest, up to the aggregate award limit of
1,00.0 m.illi~.

oneeary Auehori. ty

mi~lion

(PIMA)

rraas~D~rect

f app%c~t.ly

cus~amers

$773

requeste4 thae we reinvest

~11io: ~to

the

~-year

the~ matur~g hol~ngs

nota.

The auctiou wi11 Qe concuctad ~n the aingle-price auctio: format. ~ competiDODCompetitive awarda will be at the highest yie1d of accepted competitive
mde:rs. "l'he allocation percentage applied to bic!s awaraed at the highast yield will
~ rounded up to the uext hundredth of a whole percentage point, e.g., l7.~3%.
L~e and

The uous being offered toclay are eligible for the SnIPS program.

This offering of 'l'reasury securities is governed by the te:ms and conctitions
:t forth .izl the tJz:d£oxm Offerj.:ng Circular for the Sale and :Issue of Marketable !5ook~try 'l'reasu:y Bills, Kotes I and Bonds (3l C!'R Part 356, as amencled).
l)eca.:5.l..s

al::I~t

the

new

security are given iA the at.tached o££eri:s

h~gb.lights.

000
~ta.cJzment:

-436

r press releases, speeches, public schethdes IUlti of/udal biog,aphies, caY ou, 24-hDur fa line at (202) 622-2040

HIGBLJ:Gl!TS OF TREASURY 0J'J'UJ:liG TO THE PtmL:IC OP
~-YXAR NOTES TO SB ISSUED JULy 2, 200~

Jun@ 20, 20()J.
Offering Amount •••••••••••••••••••••••••.•.••• $1l, 000 million
Pub1ic Offering •••••••••••••••.••••••.•.•••.•• Offeriug amount les~ the amoUAt
awarded for PIKA accounts

Description o~ Offering:
~8r.z an4 cype of se~urity ••••• ~.- ••••• ~ ••••••• 2-year·notes
Series . . . . . . . . . . . . . . . . . . . . . . .
a 1il-2003
CO'S:IP Il~ •••••••••••••••••••••••••••••••••• 91.~S:i7 6z 0
Au.ctioA dace ........................................ JUD.e 27 I 2001.
Issue date •••••.•••••.••..•......••.•••••••••• JUly 2, 200l.
Dated 4aee •.••••••••••••••••••••.••••••.••• ~ •• JUne 30 , 2 DOl.
va. \:Uri. t:y Qa te • • • • • • . . • . • • • • • • • • • • • • • • • • • • • • • •• .:J'u.De J 0 , 2 00:3
0

. . . .

. . . . . . . . . . . .

11\; . . . . . . . .

Xneerest rate •••••••.•.•.••••••••••••••••••.•• Detar.mined based on the highest
accepted compe~iti~e bid
rieJ.d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ •••••••••• ])eteJ"'ll'liDed at auc:t.iOD
rnterest payment dates ••••••••••••••.••••••••• December 31 acd JUn@ 30
KJn;mum'bid amount and multiples ••••••.••••••• $1,000
Accrued interest payable by invest.or •..•..•••• Determinec1 at auction
Premium 01" discount •...•••••· •••••••••••••.•••• l)etezmined at auct.ion
STR%PS

~for.ma~on:

amount required •••.••.••..••••...••••• $lIOOO
Co:z:pus c:tTSIP number •••••••••••••••••••••••••• 912820 GJ 0
%)ue date (8) and CtJ'S:tP Ilumber (s)
for addi~i~ TXHT(s) .- .•..•....••••.•••.•• ~oe applicable
¥'i.ni::Nm

S~ss~o~ of Bids;
!ioncompeti ti."e :bids:
Accepted in full up eo $5 ~llion . t the highest aecep~ed yield.
Foreign aDCl Iute~tiona.l. Xozl.~tazy Authority (PIKA) bic1a: ~c=compet.it;ive bids
s~t.ted through the Pede~al Reserve Banks as agents for PIKA acco~ts.
Accepted in orier of .i.ze from sma11est to l.argest rith J:lO mare thom $200
m:i.1.1J.o=. awa:raed per account.
The ~tal. DOD-compet.it.ive amouut awardee! to J'ecie::-al.
ae8e~ BeAks aa .seAts for PDIA accC1m~. wi.l.l IlOt exceed $1,000 IId.lliOA.
A
s~g1e bid thae would cause ~e l.tmit to be exceeded will be partially accepted
in the amount that brings t.he aggregate award total to the $1,000 Ddlli~ l~t.
However I if there are t:vo or more bids of equal azount.s that: WO'I11d cause the
l~t to be exceeded, each will be prorated to avoid ~eediAg the limit.
Compe ti. t;iva bids:
(1) Hust be axpx-esse4 as a y1elcl with three deci.lluUs, e.g., 7 .l~3%.
(2) Net long position for ea.c:h bidder Jm1st be reported when the sum of the total
bid ~t, at all ~el4s, anC!. ~e D.et. long pos~tion is $2 bil~ion or.greate::-.
(3) Net l.cug posi~ioll must ~ c;lete;rmi~ed as of one ha.l.f-hour prior ~o t:.he
cl0.~g t±me for recei.p: of compe~~tiV8 tenders.

Kax;nrum Recognized Sid at a Single Yield ••••••••.•• 35% of public offeri.ng
~

Award •••••••••••••••••••••••••••••••••••••• 35% of public offering

1eceipe of Tenders:
Bonccmpet~ti~e

tenders:

Prior to 12: 0 0 ~Oll ea.s tern daylight saving time on auc cion Clay.
Campetieive taDders:
Prior t.o 1..00 p.m . . . . t.arJl dayl;Lgb..t .a.vi~ t.i:me on auction day.

Payment Tel:lSlS: By charge too a. funds accoWlt .t a Federal bserve Bank on issue (late,
o:!:' ~t:. o£ £ul.1 par ~Ul1t with tcmder. 1'reasu.:y..D.irect: customers can use the Pay
~ir.ct faabure which au~oriz •• a c~. ~o ~eir account of record at. their
financial. il1s~tu~cm on issue dat.e.

DEPARTMENT

THE

TREASURY

NEWS

IREASURY

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

Embargoed until 10:30 AM EDT
June 21, 2001

Contact: Tara Bradshaw
(202) 622-2960

Statement of Jim Flyzik Acting Assistant Secretary for Management and Chief
Information Officer (CIO) before the House Government Reform Committee

Mr. Chainnan and members of the Committee, I appreciate the opportunity to
appear today to discuss E-Government initiatives within the Department of the Treasury,
efforts to comply with the Government Paperwork Elimination Act (GPEA) and how
compliance with GPEA fits into the Department's information technology strategic plan.
First, I want to thank the Chairman and the other members of the Committee for your
continued support and encouragement toward the improvement of information
technology and reform in the Federal Government.
As many of you know, I serve as the Acting Assistant Secretary for Management
and Chief Information Officer for the Treasury Department. In this role, I provide
strategic direction and oversight for all information technology programs within the
Treasury Department and its fourteen Bureaus. Since February of 1998, I have served as
the Vice Chair of the Federal CIO Council where I playa key role in the strategic
direction of the Council and the Federal Government's use ofinfonnation technology.
The Department of the Treasury is making great strides in harnessing the power
of the Internet to improve customer service, increase mission effectiveness, and create
operating efficiencies. This progress is evident in the Department's plan to comply with
the Government Paperwork Elimination Act (GPEA). However, the Department's drive
to be at the forefront of electronic government extends beyond compliance with GPEA
requirements. The Treasury CIO Council strategic plan places E-Government at the
forefront. The Department is aggressively and proactively developing plans and
launching initiatives that will make it a leader in electronic government.
The Treasury CIO Council E-Government plan promotes the development of
systems and tools to support the Department's move toward E-Treasury. The CIO
Council supports the use of Public Key Infrastructure, Virtual Private Networks,
SmartCard and Portal technology to create a platform for E-Government initiatives.
PO-437
Far press releases, speeches, public schedules and official biogrpphies, call our 24-hour fax line at (202) 622-2040
~

An example of the way that Treasury Bureaus are delivering new value to
citizens, businesses, and government partners is FMS' Pay.gov. Pay.gov is an Internet
portal and transaction engine that offers a package of electronic financial services to
assist agencies. The services of Pay.gov rest on four cornerstones:

•

Collections - enabling end-users to authorize collections over the Internet

•

Forms submittals and bill presentment - accepting agency forms submitted over the
Internet and presenting agency bills to end-users over the Internet

•

Authentication - establishing the identity of Internet end-users

•

Agency reporting - providing necessary information back to agencies about
transactions.

The services of Pay.gov can help agencies meet their GPEA requirements to
accept forms electronically by October 2003. The basic services of Pay. go v generally
will be free for agencies and the public. FMS will price services that go beyond basic
services using an "at-cost" basis.
I would like to mention a few additional E-Government initiatives within the
department. The Information Technology Investment Portfolio System (I-TIPS) is a
government-owned, off-the-shelf tool. Treasury hosts this system for use throughout
government. I-TIPS is a web-based, E-Government solution that supports the selection,
control and evaluation of information technology projects. It houses a broad range of
information about the business purposes, technology, costs, risks and return of a specific
proj ect. Treasury required the bureaus to use I-TIPS as part of their capital planning and
budgeting activities. It enabled Treasury to provide consolidated IT budget information
electronically to OMB. I-TIPS eliminated the need for bureaus to develop and maintain
separate reporting systems. Treasury is also the government-wide project manager for ITIPS. Over twenty agencies in the Federal government report using I-TIPS. The federal
government reduces system development and maintenance costs substantially through
standardization. I-TIPS supports GPEA by replacing the annual paper-based IT
Planning Call with an electronic submission.
Treasury also hosted the Federal Bridge Certification Authority (FBCA) project
for the Federal government, currently operated by GSA. The FBCA is a mechanism for
the secure exchange of information between government agencies. The bridge allows
agency public key infrastructures (PKIs) to interoperate as it permits digital credentials
(called "digital certificates") issued by each agency to its employees to be accepted with
trust and confidence by other agencies for electronic transactions. This functionality
directly supports E-Government, as agencies will be able to perform Internet-enabled
transactions, such as credit card collections through banks, or secure emails between
agencies, with previously unattainable trust and confidence. A prototype version of the
FBCA became operational in February 2000 and was successfully used in a large-scale
test in April 2000.

During that time, the PKls of five different organizations within the U.S., the
Canadian Government and academia, were cross-certified through the prototype FBCA.
The agencies were able to interoperate, successfully exchanging digitally signed
electronic mail messages. FBCA is operated by GSA and, once cross-certification has
been completed, will be used by NASA, USDA's National Finance Center, FDIC,
Treasury, the State of Illinois, and the Canadian Government for the electronic transfer of
documents.
Treasury's Bureau of Public Debt partnered with Treasury's Financial
Management Service, Mellon Bank, MasterCard and IBM to build an Internet-based
system to sell U.S. Savings Bonds directly to the public. Savings Bond Direct allows
citizens to buy a savings bond on a 24 x 7 basis through the Internet using a credit card.
The Bureau of Public Debt sells directly to the public instead of using its traditional
network of over 40,000 commercial banks. Through Savings Bond Direct, Public Debt
reduced the delivery time for bonds by one-third. The system cost $350 thousand to
develop and implement and within its first 18 months of operation, generated almost
$230 million in bond sales.
The Bureau of the Public Debt's Treasury Direct Electronic Services (TDES)
allows individuals to directly manage their investments in the U.S. Treasury marketable
securities using either the Internet or telephone. The system is an application that uses
intelligent agents to automate various investor services, such as purchasing securities,
reinvesting maturing securities, viewing account status, requesting account statements, as
well as other similar services. TDES was implemented to promote self-sufficiency
among Treasury Direct's 700,000 customers and to facilitate Public Debt's consolidation
of servicing sites from thirty-seven Federal Reserve Banks to three. By using TDES,
Public Debt has reduced the processing cost of a tender to $0.50 as opposed to $30.00 to
process a paper tender in the past.
The Savings Bond Connection and the Treasury Direct Electronic Services are
two highly secure E-Government applications that allow individual investors the option
of purchasing securities on-line, completing transactions to include the payment process,
and accessing account information.
The U.S. Mint operates the Online Store, a highly successful electronic commerce
web site with an online catalog shopping service. The site offers Internet catalog
browsing with mail and phone order capability as well as secure credit card sales. The
U.S. Mint's Online Store is recognized as one of the top 20 "e-tailers" in the nation, with
total web sales of more than $256 million during a twelve-month period. The Mint
receives orders from customers to electronically buy Mint products. The Mint also
receives coin orders electronically from the Federal Reserve Banks (FRB). E-mails and
electronic spreadsheets are used quarterly by the FRB to order coins for individual banks
by denomination and amount.

The Electronic Federal Tax Payment System (EFTPS), provides an electronic
system for reporting and paying Federal taxes. EFTPS is the largest payment collections
system in the world. The Financial Management Service (FMS) and the Internal
Revenue Service (IRS), working with the private sector, have modernized the federal tax
payment environment. They started with the federal tax deposit coupon system then
expanded to other business and individual tax payments. By replacing the current paperbased system, EFTPS benefits taxpayers and the Federal Government by providing
greater reporting efficiencies and by expediting the availability of funds and investment
decision-making information to the Treasury Department. The primary objectives for
EFTPS are to reduce the filing burden by providing flexible payment choices for
taxpayers; to increase the speed, efficiency, and accuracy of revenue collection and
taxpayer account posting; and to expedite the availability of funds to the Government.
EFTPS-OnLine was launched in October 2000 as an Internet pilot that allows business
taxpayers, by invitation only, to enroll, make payments, and access customer service
OnLine. The nationwide launch of EFTPS-OnLine is scheduled for September 2001 and
will allow businesses and individuals to make their tax payments electronically.
The IRS E-file program provides faster refunds, an acknowledgement that the tax
return has been accepted by the IRS, and nearly 100% accuracy, all of which translates
into fewer contacts with the IRS. As of June 8, 2001, the IRS received about 123 million
Form 1040 returns, up about 1.3% from last year at that time. This includes 39.8 million
returns that were filed electronically, up about 13.3% from the same period last year.
Congress has established the aggressive goal that 80 percent of all tax and information
returns should be filed electronically by 2007. The IRS has developed a strategic plan
that will enable them to make significant progress toward accomplishing this goal and
revolutionizing how both individual and business taxpayers transact and communicate
wi th the IRS.
Even though the IRS Restructuring Act of 1998 statutorily exempts IRS from
GPEA, the IRS Business System Modernization efforts support the intent of GPEA. The
federal tax system, which produces close to $2 trillion in revenue each year, is dependent
on a collection of obsolete computer systems developed by IRS over the last 35 years.
The purpose of the IRS Business Systems Modernization effort is to raise all major IRS
business systems to the level of best practice that exists in private and public sectors,
while managing risks inherent in the process. This modernization effort will impact
every component of IRS over time. Implementation work on the first approved
modernization projects to facilitate call routing and electronic filing will begin in 20012002.
In the last decade, trade has grown 132%. U.S. Customs is currently using the
Automated Commercial System (ACS), which is sixteen years old and taxed to its limits.

To address this deficiency, Customs has designated its replacement, the
Automated Commercial Environment (ACE) under the overall Customs Modernization
Program. Other government agencies, such as Agriculture, Food and Drug
Administration, Transportation, Immigration and Naturalization Service, and the Bureau
of the Census, rely on Customs systems to perform their internal operations. Currently, a
single international shipment can require as many as 40 different government paper
forms. Ninety percent of the information is redundant. ACE will significantly reduce the
paperwork burden, provide functionality long sought by the trade, and respond to
legislative requirements. Further, the International Trade Data System (ITDS) will
provide a single, comprehensive front-end interface for over 100 federal regulatory and
enforcement agencies. ITDS will also support the data interactions between these
agencies and over 350,000 businesses involved in international trade. The ACE and
ITDS modernization efforts respond directly to GPEA requirements.

The Alcohol, Tobacco and Firearms' (ATF) electronic government investment
expands on and is enabled by the Department's earlier investments in ATF's technology
and business modernization efforts. Using current Internet based technologies, ATF will
provide the necessary tools to permit the 630,000 members of the alcohol, tobacco,
firearms and explosives industries to file all required forms and reports using secure
Internet transactions. To maximize the utilization of this investment, these same
technologies will be used to solicit, award, administer, and pay commercial vendors
conducting business with ATF. ATF's electronic government investment proposes the
use of current technology to accomplish a 200 year old core Treasury mission. The
technology will support the submission, receipt and audit of tax return data and
associated payments as well as the receipt and audit of non-tax related forms filed by
regulated industry members. This proposal will replace the current paper-based
submission of nearly 1.5 million documents filed annually by industry members with
highly accurate electronic data.
The Financial Management Service (FMS) Payment Application Modernization
and Government-wide Accounting Modernization efforts include processes in the areas
of payments, collections, government-wide accounting and debt management that, when
made available in an electronic form, will provide individuals and other entitles that do
business with FMS, the option to submit information or transact with FMS more
efficiently and with improved customer service and satisfaction. Since the
implementation of the electronic funds transfer (EFT) requirement of the Debt Collection
improvement Act, the percentage of total Treasury disbursed payments made by EFT has
risen to 73%. FMS Payment services touch the lives of over 100 million people.
Literally tens of millions of Americans depend on FMS systems to meet lifeline needs
every month. FMS makes almost 900 million payments annually on behalf of civilian
agencies such as the Social Security Administration, Department of Veterans Affairs and
the IRS. FMS also offsets certain payments against debt owed to the Federal
Government. Payment modernization is one component of a multi-year effort to replace,
streamline and reengineer the critical information systems that support core FMS
business processes.

The processes and systems used to account for and report on the execution of the
President's Budget, and on the government's receipts, outlays and surplus or deficit, have
not changed fundamentally for 30 years. However, there have been dramatic changes in
the government's accounting environment. The Government-wide Accounting
Modernization initiative will improve the reliability and timeliness of the government's
financial information by providing better tools for federal program agencies to check the
status of their financial information held by Treasury and by streamlining reporting and
reconciliation processes.
Treasury's Strategic Plan and the goals of the Government Paperwork Elimination
Act (GPEA) are linked to all of our E-Government initiatives and modernization efforts.
I am a member of Treasury's Capital Investment Review Board (CIRB) and one of the
criteria we use to analyze business cases is whether the proposed investment is in
alignment with strategic business objectives. The goal of reducing the burden of
paperwork and increasing the ability of customers to interact with Treasury
electronically, while re-engineering and streamlining our business processes makes good
business sense. GPEA was a catalyst to our efforts.
In summary, I would like to reiterate that the Department's drive to be at the
forefront of electronic government extends beyond compliance with GPEA requirements.
Although GPEA-related activities are a critical component of the overall Treasury effort,
the Department is seeking to fundamentally redefine the way in which it performs some
of its critical missions. The Department is aggressively and proactively developing plans
and launching initiatives that will make it a leader in electronic government.
I would like to thank the subcommittee for the support it has given to EGovernment. Without your support we would not have been able to achieve the National
success we enjoyed to date. I would like to thank the members of the Committee for the
opportunity to present this morning. Mr. Chairman, this concludes my formal remarks
and I would be happy to respond to any questions.

DEPARTMENT

'IREASURY

THE

TREASURY

NEWS

------------~~----

OrnCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

Embargoed until 11 :30 a.m. EDT
June 21, 2001

Contact: Tony Fratto
(202) 622-2960

ST ATEMENT OF BRIAN C. ROSEBORO NOMINEE FOR ASSIST ANT
SECRETARY OF THE TREASURY FOR FINANCIAL MARKETS
BEFORE THE COMMITTEE ON FINANCE UNITED STATES SENATE
Chainnan Baucus, Ranking Member Grassley, and Members of the Committee on
Finance, thank you for the opportunity to appear before you today.
I am honored that President Bush has nominated me to serve as Assistant
Secretary of the Treasury for Financial Markets and, if confinned, to have the opportunity
to work with Secretary O'Neill, the Treasury staff, and others in the Administration to
advance the President's economic agenda.
Before proceeding any further, I would like to take this opportunity to thank my
grandparents, Cleo Duncan Roseboro and James Benjamin Roseboro Jr., both deceased.
It is because of their instilling the values of hard work, perseverance and faith that I am
honored to sit before you today.
If confinned, I look forward to working closely with this Committee, the Senate,
and with Members of the House of Representatives on the broad range of issues
addressed by the Office of Financial Markets.
The Department of the Treasury plays a fundamental role in our financial markets.
The strength and resilience of the markets are of critical importance to global financial
stability and confidence. In addition to serving as an advisor to Secretary O'Neill on
capital market issues, debt management, and Treasury's response to market events, I
especially hope to have the opportunity to work with this Committee to improve the
efficiency with which we finance the government's obligations.
My eighteen years of experience in capital markets has given me the opportunity
to learn about and actively confront many of the pertinent issues evolving from the
globalization of banking and capital markets. Beginning my career with the Federal
Reserve Bank of New York, I learned the macroeconomic policy and operational issues
critical for the development of efficient markets. Later, private sector opportunities, with
preeminent global banking and insurance institutions, honed my understanding of the
issues of those seeking to transfer financial risk and those choosing to manage it.
PO-438
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

In sum, I have been afforded a unique opportunity to understand and actively
address many issues evo lving in financial markets from the perspecti ves of regulator,
salesperson, trader, and corporate wide risk manager.
Mr. Chairman, thank you again for the opportunity to appear before the
Committee. I hope members of the Committee will support me, and I promise to work
diligently and with an open mind on all matters that this Committee may wish to raise
with this Office. I hope that this will be the beginning of a strong working relationship.
I would like to thank Secretary O'Neill for the confidence he has shown in me by
supporting me for this office. I would be pleased to answer any questions that you and
other members of the Committee may have.

DEPARTMENT

THE

TREASURY

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

FOR IMMEDIATE RELEASE
June 21, 2001

TREASURY DEBT BUYBACK OPERATION RESULTS

Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
par of its outstanding issues. A total of 12 issues maturing between February 2015 and
August 2019 were eligible for this operation. The settlement date for this operation will
be June 25, 2001. Summary results of this operation are presented below.
(amounts in millions)

Offers Received (Par Amount):
Offers Accepted (Par Amount):
Total Price Paid for Issues
(Less Accrued Interest) :
of Issues Eligible:
For Operation:
For Which Offers were Accepted:

$8,414
1,750

2,515

~umber

12
7

~eighted

Average Yield
of all Accepted Offers (%):

ieighted Average Maturity
for all Accepted Securities (in years) :

5.586

15.0

letails for each issue accompany this release.

0-439

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

June 21, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS

(amounts in millions, prices in decimals)
Table I

Coupon
Rate 1%)

Maturity
Date

Par
Amount
Off e r e d

11.250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125

02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019

537
735
605
519
197
433
886
977
540
570
1,194
1,222

Par
Amount
A cceJ;1 t e d

Highest
Accepted
Pr~ce

Weighted
Average
Accepted
Price

240
670
190
75
0
0
45
308
0
0
222
0

154.453
149.312
142.234
136.218
N/A
N/A
132.343
133.937
N/A
N/A
135.234
N/A

154.424
149.260
142.192
136.192
N/A
N/A
132.322
133.920
N/A
N/A
135.232
N/A

Weighted
Average
Accepted
Yield

Par Amount
Privatel:t: He1d*

5.518
5.550
5.572
5.595
N/A
N/A
5.642
5.644
N/A
N/A
5.685
N/A

9,240
3,224
4,660
4,775
17,724
17,168
13,487
9,973
5,833
6,734
12,712
16,741

Table II

Coupon
Rate 1%)

Maturity
Date

CUSIP
Number

Lowest
Accepted
Yield

11.250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125

02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019

912810DPO
912810DS4
912810DT2
912810DV7
912810DW5
912810DX3
912810DY1
912810DZ8
912810EA2
912810EBO
912810EC8
912810ED6

5.516
5.546
5.569
5.593
N/A
N/A
5.640
5.643
N/A
N/A
5.685
N/A

Total Par Amount Offered:
Total Par Amount Accepted:

8,414
1,750

Note: Due to rounding, details may not add to totals.
*Amount outstanding after operation. Calculated using amounts reported on announcement.

DEPARTMENT

THE

TREASURY

NEWS

TREASURY

OFFICE OF PUBLIC AFFAIRS. ]500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622·2960

EMBARGOED UNTIL 2:30 P.M.
June 21, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $27,000 million to refund $18,827 million of publicly held
bills maturing June 28, 2001, and to raise about $8,173 million of new cash.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $10,051 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million.
Treasu~Direct customers have requested that we reinvest their maturing
holdings of approximately $939 million into the 13-week bill and $698 million
into the 26-week bill.

The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about each of the new securities are given in the attached
offering highlights.
000

Attachment

PO-440
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

TO BE ISSUED JUNE 28, 2001
June 21, 2001
Offering Amount •.•.•.•.•.•••••.•...•.•. $15,000 million
$12,000 million
Public Offering •...••••••.•••.•.•.•.••• Offering amount less the amount awarded for FIMA accounts
Description of Offering:
Term and type of security .•.•••.•.•.••.
CUSIP nwnber ......•..••..•.•••••..•.•.•
Auction date ••••.••..•.•.••••••••.•.•••
Issue date .•.•.......•....••.•.•••...••
Maturity date •..•.••.•••••.•.••••••..••
Original issue date ...•.•...•.•..•.•.••
Currently outstanding ••••••••••••.•••••
Minimum bid amount and multiples .•.••.•

91-day bill
912795 HQ 7
June 25, 2001
June 28, 2001
September 27, 2001
March 29, 2001
$12,207 million
$1,000

182-day bill
912795 HZ 7
June 25, 2001
June 28, 2001
December 27, 2001
June 28, 2001
$1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FIMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate award
total to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%,
7.105%.
(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 $1 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 Rate •••. 35% of public offering
Maximum Award •.••.••••••••..•••...•.••••.•• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders •.. Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders ••.... Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
Treasu~Direct customers can use the Pay Direct feature which authorizes a charge
to their account of record at their financial institution on issue date.

DEPARTMENT

IREASURY

THE

TREASURY

NEWS

ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlDNGTON, D.C. - 20220 - (202) 622-2960

FOR IMMEDIATE RELEASE
June 22, 2001

Contact: Tasia Scolinos
(202) 622-2960

FINANCIAL ACTION TASK FORCE RELEASES 2000-2001 REPORT ON
INTERNATIONAL MONEY LAUNDERING

The Treasury Department welcomes today's announcement by the Financial
Action Task Force (FATF) of significant progress in its efforts to combat international
money laundering. Dramatic results have been achieved through its initiative on noncooperative countries and territories. The F ATF removed the Bahamas, the Cayman
Islands, Liechtenstein and Panama from the list it published one year ago, recognizing the
comprehensive reforms they have put in place. "We applaud the legal reforms made by
these countries," said U.S. treasury Secretary Paul O'Neill. "These improvements are a
testament to the effectiveness of international cooperation in combating money
laundering, and I'm optimistic that the FATF process will generate further progress."
Eleven countries named last year will remain on the non-cooperation list: the
Cook Islands, Dominica, Israel, Lebanon, Marshall Islands, Nauru, Niue, the Philippines,
Russia, St. Kitts & Nevis, and St. Vincent & the Grenadines. In addition, the F ATF has
placed six more countries on the list: Burma, Egypt, Guatemala, Hungary, Indonesia, and
Nigeria. The U.S. Treasury Department urges all 17 countries to move quickly to enact
and implement needed reforms. The Treasury Department intends to update its advice to
U.S. financial institutions as necessary to reflect the FATF findings.
The F ATF has also recommended the imposition of additional countermeasures
against Russia, Nauru, and the Philippines due to their lack of progress over the last year
in addressing the F ATF's concerns. The countermeasures will go into effect on
September 30, 2001, unless their governments enact significant legislation before then to
address these problems. The Treasury Department supports counter measures against
countries refusing to implement constructive legal reforms to address ongoing money
laundering concerns. The Treasury Department, in conjunction with the Department of
State and the Department of Justice, remains firmly committed to this global battle and
we praise the steps the FATF has taken today.
PO-441

Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

FATF INFORMATION: The FATF is an independent international body. The twentynine member countries and governments of the F ATF are: Argentina; Australia; Austria;
Belgium; Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong;
China; Iceland; Ireland; Italy; Japan; Luxembourg; Mexico; The Kingdom of the
Netherlands; New Zealand; Norway; Portugal; Singapore; Spain; Sweden; Switzerland;
Turkey; United Kingdom; and the United States. Two international organizations are
also members of the FATF: the European Commission and the Gulf Co-operation
Council.

-30-

DEPARTMENT

IREASURY

THE

TREASURY

NEWS

OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIAAVENYE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960

FOR IMMEDIATE RELEASE
June 25, 2001

Contact: Tony Fratto
(202) 622-2960

TREASURY POSTS U.S. SELF-ASSESSMENTS RELATING TO COMPLIANCE
WITH 12 KEY INTERNATIONAL STANDARDS AND CODES

Treasury Secretary Paul O'Neill today announced the release of a series of U.S. selfassessments relating to compliance with international standards designed to strengthen financial
systems in countries around the world. Some of the self-assessments have been completed
previously by various public and private organizations, but are being made available via a new
page on the Treasury website (http://www.treas.gov/standards/).
The release of U.S. self-assessments is part of an international effort to improve
transparency globally as a way to promote stronger financial systems that can withstand crises.
The creation of the new website is the culmination of a cooperative effort between the U.S.
Treasury and the Commodities Futures Trading Commission (CFTC), the Federal Reserve, the
Federal Deposit Insurance Corporation (FDIC), the National Association ofInsurance
Commissioners (NArC), the Office of the Comptroller of the Currency (OCC), the Office of
Management and Budget (OMB), and the Securities and Exchange Commission (SEC).
Secretary O'Neill said, "Crisis prevention requires all countries to pursue sound policies
and develop robust financial sectors. Adopting practices that meet or even exceed key
international standards for financial systems - such as bank capital, supervisory standards and
accounting principles - is critical." He went on to say, "The inter-agency process that
contributed to this release demonstrates the strong support ofthe United States for standards and
codes, our recognition of the critical role that the standards process can play in strengthening
crisis prevention, and the government-wide commitment to transparency."
The standards covered by the assessments are the 12 key standards highlighted by the
Financial Stability Forum (FSF) in its Compendium of Standards. The United States is a
member of the FSF, and helped to identify the 12 key standards, which cover the areas of
macroeconomic policy and data transparency, institutional and market infrastructure, and
financial supervision and regulation.

PO-442
Far press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

The 12 key standards (and the standard-setting body) highlighted in the FSF Compendium are:
1) Code of Good Practices on Transparency in Monetary and Financial Policies (International
Monetary Fund)
2) Code of Good Practices on Fiscal Transparency (International Monetary Fund)
3) Special Data Dissemination Standard/General Data Dissemination System (International
Monetary Fund)
4) Principles and Guidelines for Effective Insolvency and Creditor Rights Systems (World
Bank)
5) Principles of Corporate Governance (Organization for Economic Cooperation and
Development)
6) International Accounting Standards (International Accounting Standards Board)
7) International Standards on Auditing (International Federation of Accountants)
8) Core Principles for Systemically Important Payment Systems (Committee on Payment and
Settlement Systems)
9) The Forty Recommendations of the Financial Action Task Force (Financial Action Task
Force)
10) Core Principles for Effective Banking Supervision (Basel Committee on Banking
Supervision)
11) Objectives and Principles of Securities Regulation (International Organization of Securities
Commissions)
12) Insurance Core Principles (International Association ofInsurance Supervisors)
Countries that work toward meeting or exceeding these standards will help promote financial
stability by strengthening financial regulation and supervision, improving transparency,
improving market integrity, and facilitating better-informed lending and investment decisions.
The IMF and World Bank have established a process for assessing countries' implementation
of the 12 key standards, which are published as Reports on Observance of Standards and Codes
(ROSCs). Most ofthe ROSCs that have been completed to date are available on the IMF
website.
The U.S. self-assessments are not meant to be a substitute for external assessments under the
IMF and World Bank ROSC program. However, the U.S. is making available the selfassessments, which can be a valuable input into the external assessment process, in order to help
promote greater awareness of U.S. practices.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

OR IMMEDIATE RELEASE
une 25, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
June 28, 2001
September 27, 2001
912795HQ7

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.375%

High Rate:

Investment Rate 1/:

Price:

3.451%

99.147

All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate.
Tenders at the high discount rate were
llotted 27.05%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive
FIMA (noncompetitive)

29,388,425
1,245,139
130,000

5,156,272

Federal Reserve
$

35,919,836

13,624,878
1,245,139
130,000
15,000,017 2/

30,763,564

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

20,156,289

Median rate
3.370%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
3.340%:
5% of the amount
E accepted competitive tenders was tendered at or below that rate.
~s

id-to-Cover Ratio

= 30,763,564 / 15,000,017 = 2.05

f Equivalent coupon-issue yield.
/ Awards to TREASURY DIRECT = $1,026,174,000

http://www .publicdebUreas.gov

po-443

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

'OR IMMEDIATE RELEASE
-une 25, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182 -Day Bill
June 28, 2001
December 27, 2001
912795HZ7

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.340%

Investment Rate 1/:

3.445%

Price:

98.311

All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate.
Tenders at the high discount rate were
llotted
2.92%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

SUBTOTAL

4,895,157

4,895,157
$

31,412,211

10,927,128
928,146
145,000
12,000,274 2/

26,517,054

Federal Reserve
TOTAL

25,443,908
928,146
145,000

Accepted

16,895,431

Median rate
3.320%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
3.280%:
5% of the amount
E accepted competitive tenders was tendered at or below that rate.
~s

id-to-Cover Ratio

= 26,517,054 / 12,000,274 = 2.21

I Equivalent coupon-issue yield.
I Awards to TREASURY DIRECT = $744,273,000

http://www.publicdebt.treas.gov

po-444

D EPA R T 1\1 E N T

0 F

THE
.

TREA. S iT RY
."

NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220" (202) 622-2960

FOR Th1MEDIATE RELEASE
June 26,2001

Contact: Tony Fratto
(202) 622-2960

Il\IF CONCLUDES ARTICLE IV CONSULTATION WITH THE UNITED STATES
The Treasury Department is releasing today the concluding statement by the staff of the
International Monetary Fund following this year's Article IV Consultation with the United
States. This statement represents IMF staffs independent judgement and assessment of U.S.
economic performance and policies.
In its statement, the IMF staff commends the United States for strong economic
performance, a sound policy framework, and its contribution to the global economy. The IMF
staff also takes note, however, of the recent economic slowdown, asserting that "the principal
policy priority for the United States in the near term is to revive economic growth." IMF staff
adds that "some short-term fiscal stimulus along the lines of the recently enacted ta'( cut will help
insure against a sharper slowdown" and notes further that the "Federal Reserve's substantial
easing of monetary policy since early 2001 has been appropriate." On external balances, the
IMF staff notes that the current account deficit has reflected the stronger pace of economic
growth and relatively higher rate of return in the United States and that further reforms abroad
would "help to ensure that the adjustment of external balances takes place in a manner conducive
to strong global growth."
Release of this statement is consistent with a broad effort by the United States to enhance
the transparency of the IMF. Thus far in 2001, nearly 90 percent of the IMF's members have
published Public Information Notices (PINs) for Article IV consultations. In addition, in recent
years, over sixty countries and regions, including the United States, have published the staff
reports on their Article IV reviews and more plan to do so. The United States ·expects to release
this year's staff report later this summer after it has been reviewed by the IMF's Executive
Board.

-30PO-445

For press releases, speeches, public schedules and official biographies, call our 24-hoUT fax line at (202) 622-2040
·U.S. Government Pflntlng 0:I,C8 1998· 619·559

INTERNATIONAL MONETARY FUND
2001 Article IV Consultation with the United States of America

Statement of the Fund Mission
June 26, 2001

1.
Sound fiscal and monetary policies over the past decade have provided a strong
foundation for the longest U.S. economic expansion on record. Detennined policy efforts
led to a dramatic improvement in the federal fiscal balance since 1992, resulting in large and
growing fiscal surpluses in the last three years. The sure-handed implementation of monetary
policy allowed the economy to expand strongly, and unemployment fell to levels not seen in
more than three decades, without igniting inflationary pressures. With concerns rising that
the strong pace of growth in 1999 and early 2000 might push output past even what appeared
to be the economy's rapidly expanding productive capacity, the Federal Reserve moved
during this period to tighten monetary policy to guard against overheating of the economy
and the emergence of inflationary pressures. Signs of slower growth did not appear until
mid-2000, but then the economy slowed much more rapidly than expected.
2.
The sharp slowdown in economic growth reflected a number ofmutually
reinforcing developments that weighed heavily on economic activity in the second half of
2000 and into early 2001. Higher interest rates, rising energy prices, falling stock prices, and
wider credit spreads contributed to reducing investment and dampening consumer spending.
Lagging sales and a buildup in inventories triggered sharp cutbacks in production in some
sectors of the economy and clouded corporate earnings and employment prospects, creating
considerable uncertainty regarding the future course and strength of economic activity. At
this juncture, whether economic activity recovers soon or remains sluggish for a protracted
period depends on how consumer and business confidence evolve and influence consumption
and investment decisions; whether households and businesses encounter balance-sheet
problems that spill over on to the banking system; and whether the stronger productivity
growth of recent years is sustained. The recent slowdown in a number of major economic
partners is likely to have some dampening effect on U.S. growth.
3.
In these circumstances, the IMF staff believes that the principal policy priority for
the United States in the near term is to revive economic growth. While the new tax
reduction act will provide some stimulus to domestic demand, monetary policy should be the
primary instrument for stimulating economic activity. The Federal Reserve's substantial
easing of monetary policy since early 2001 has been appropriate. Whether further easing will
be needed will depend on the economy's response to past interest rate cuts. If economic and
financial indicators remain weak, additional cuts in interest rates may be necessary. Provided
that underlying productivity growth continues at a reasonable pace, inflationary pressures are
expected to remain generally well contained owing to an easing in labor market tightness and
strong competition in product markets, thereby providing room for a forward-looking
monetary policy to support the economy in the event of persistent weakness.

-2-

4.
In recent years, the stronger pace of u.s. growth relative to major trading partners
and the real effective appreciation of the dollar-largely driven by capital inflows seeking
a higher relative rate of return from investments in the United States-contributed to a
large widening in the U.S. external current account deficit. The size of that deficit-now
over 4lh percent of GDP-is not sustainable in the longer term, and has raised concerns
that the dollar might be at risk for a sharp depreciation. Nevertheless, with the right
policies in the United States and other major countries, adjustment in the current account
should occur in an orderly manner. In the period ahead, as world demand growth is
rebalanced and the cyclical positions of the United States and other major countries
converge, demand for U.S. net exports should increase and U.S. net capital inflows should
moderate, leading to a gradual depreciation in the dollar and a narrowing in the U.S. current
account deficit. Disciplined macroeconomic policies in the United States-including the
continuation of fiscal surpluses which will contribute to maintaining national saving-will
facilitate, although not guarantee, an orderly adjustment. Further reforms in Europe and
Japan that enhance the prospects for profitable domestic investment in these areas would also
help to ensure that the adjustment of external balances takes place in a manner conducive to
strong global growth.
5.
Although evidence suggests a reasonably favorable outlook for underlying
productivity growth-reflecting continued gains in technological innovation and in the
adoption and diffusion of technology-less optimistic productivity prospects could trigger
a downward revision in expected earnings growth and lead to a significant rebalancing of
domestic and international portfolios. This might involve a sharp adjustment in the value of
the dollar. In that event, monetary policy should remain focused on ensuring sustained lowinflationary economic growth. The main challenge for U.S. policy would be to determine
whether underlying productivity growth had actually slowed down.
6.
Given the current weakness in economic activity, some short-term fiscal stimulus
along the lines of the recently enacted tax cut will help to insure against a sharper
slowdown. More generally, fiscal policy should remain focused on medium-term issues,
with tax policy driven mainly by structural considerations. The IMF staff welcomes the
emphasis that has been placed on cutting all marginal personal income tax rates-rather than
using the tax system to provide incentives for particular activities-and on simplifying the
structure of the tax system by removing the phaseout provisions for personal exemptions and
itemized deductions. These efforts are likely to yield better incentives to work and invest, to
improve transparency, and to lower compliance costs. However, the scheduled expirations of
some of the tax cuts, which were used as budget accounting devices to keep the estimated
cost ofthe package within agreed limits, will increase uncertainty and complicate tax
planning; it also means that parts of the tax package will need to be revisited.
7.
In the end, the total cost of the tax cuts is likely to be significantly higher than
current estimates suggest, unless offsetting actions are taken. The tax reductions that expire
in 2010 and the relief from the impact of the alternative minimum tax that lapses in 2004 can
be expected to be extended beyond these expiration dates, adding significantly to the cost of

-3-

tax reductions. Moreover, various "temporary" tax credits are likely to be renewed, as they
have been in the past, entailing further budgetary costs.

8.
Potential expenditure slippages are also a risk to the medium-term budget outlook.
With budget surpluses in the last three fiscal years, discretionary spending has risen more
rapidly than the mandated spending limits. The IMF staff welcomes the Administration's
efforts to keep discretionary spending in check and its proposal to extend the use of the
PAYGO requirement and discretionary spending caps (with an appropriate adjustment in
their levels) beyond their expiration in FY 2002. Strong prospective spending pressures will
test this resolve. The Administration, itself, has indicated a few priority areas for increasing
expenditures, suggesting that this additional spending will be funded out of the "reserve" in
the FY 2002 Budget or by implementing offsetting spending cuts in nonpriority items. The
Budget reserve, however, may be smaller than anticipated (particularly if the cost of the tax
cuts is higher than envisaged), and a substantial portion ofthe reserve is likely to be required
to pay for the Administration's education initiatives and its plans for defense. While there is
scope for cuts in other discretionary spending, limiting total discretionary spending to the
modest increases planned is likely to prove to be very difficult.
9.
In view of the uncertainties in the final cost of tax cuts, in the ability to hold down
increases in discretionary spending, and in the accuracy offiscal forecasts in the out years
(when the cost of the tax cuts would be greatest), the IMF staff takes the view that both
spending increases and multi-year tax cuts need to be implemented flexibly with an eye
toward ensuring that sufficient resources will be available to finance these measures over
the budget horizon. To firmly lock in place both tax reductions and new expenditure
initiatives would substantially increase the risk that the budget position could deteriorate
sharply in the longer term, with thepossibility that the Administration's objective of
preserving the Social Security surplus might not be achieved.
10.
The Budget recognizes the need for additional measures to put the Medicare and
Social Security programs on a sound long-term financial footing. With respect to
Medicare, the Administration has chosen to focus on the finances of the program as a whole,
instead of separately dealing with its two components-Hospital Insurance (HI) and
Supplementary Medical Insurance (SMI). The Budget proposes effectively to spend all of the
$525 billion surplus which will accrue to the Medicare HI trust fund over the next ten years
in part to pay for the costs of the whole Medicare program and to expand Medicare benefits
by introducing a modest prescription drug benefit for low-income seniors, pending
consideration of a comprehensive Medicare reform. At the same time, the Budget commits
the Administration to preserving the Social Security surplus and using it for debt reduction
and Social Security reform. However, it acknowledges the need for further actions to
adequately meet the program's future obligations, and a new commission has been formed to
study Social Security reform.
11.
In the IMF staffs view, a reasonable fiscal target over the medium term would be
to set aside sufficient resources to put Social Security and the whole Medicare program on
a financially viable basis over the longer term and keep the rest of the budget in balance

-4-

over the economic cycle. Priority needs to be given to solving the financing problems of
Social Security and Medicare, and at present there are sufficient resources available to solve
these problems. In the period immediately ahead, preserving the surpluses in the Social
Security and Medicare HI trust funds and balancing the rest of the budget would make a
meaningful down payment toward this fiscal target. The trust funds for Social Security and
Medicare HI were established originally as part ofrefonn plans to partially pre-fund these
largely pay-as-you-go programs to allow them to meet their long-tenn obligations without
the need for sharp future increases in tax rates or cuts in benefits. To achieve this purpose,
the surpluses in these trust funds have actually to be saved in order to put aside real resources
to meet the programs' future liabilities. While the Administration does not find it useful to
distinguish between the HI and the SMI components of Medicare, the IMF staff views some
pre-funding of the entire program-which saving the Medicare HI surplus would accomplish
pending the enactment of a comprehensive Medicare refonn-as advantageous for taxsmoothing purposes. For Social Security, its long-term financing problems are not large,
especially in comparison with those faced by many other industrial countries, and could be
solved by making some moderate adjustments now to the program's parameters.
12.
Finding a permanent long-term solution for the financing of Medicare will present
a significant challenge given the diffiCUlties associated with predicting the program's costs.
Periodic adjustments to the program are likely to be needed, and a mechanism for making
such adjustments on a regular basis should be established. A comprehensive solution to
Medicare's financial problems is likely to involve a menu of choices that would include
changing benefits, raising co-payments and deductibles, and increasing contribution rates.
Timely adoption of a comprehensive reform package to improve the program's longer-term
financial viability would avoid the need for more drastic measures if such reforms were
unduly delayed.
13.
Prospects for a significant pay down in U.S. government debt have improved
dramatically from only a few years ago. In the period ahead, saving by the federal
government will result in overall budget surpluses that are likely to exceed the
government's redeemable marketable debt. If this money is to be saved, which it should be
to deal with future liabilities, there is no choice but to invest such excess cash balances in
private assets. The challenge will be to ensure that such investments are managed in a
manner that will minimize any risk that there would be undue political interference in
investment decisions and adverse effects on economic efficiency and long-term growth
prospects. This could be accomplished by establishing individually controlled voluntary
personal retirement accounts within the Social Security system, as the Administration
suggests, or by investing these balances through the Social Security trust fund. There are
important tradeoffs to be considered in adopting either of these approaches, but regardless of
the means chosen, the IMF staff believes that the ultimate objective has to be to ensure that
sufficient resources are set aside to meet the future needs of Social Security and Medicare.
14.
Although U.S. banks experienced some moderate deterioration in commercial loan
quality in 2000 and early 2001, the overall condition of the banking sector remains
healthy. The deterioration in loan quality reflected higher interest rates through mid-2000,

-5-

slowing corporate profit growth, and weakness in certain sectors (particularly
telecommunications). The slowdown in economic growth during 2001 is likely to result in
some further deterioration in credit quality that will have a negative impact on bank
profitability. However, current profit and capitalization levels are relatively high, putting
banks in a strong position to weather the impact of these effects.

15.
In late 1999, passage of the Gramm-Leach-Bliley (GLB) Act introduced a
comprehensive overhaul of the outdated laws regulating thefinancial sector in the United
States. The Act repealed the restrictions on affiliation between banks, securities firms,
insurance companies, and other financial service providers. It empowered the Federal
Reserve as the "umbrella" supervisor for the newly created financial holding companies, but
limited its supervisory authority over the operating units of these companies that are
regulated by other banking agencies and the nonbank functional regulators. Since the passage
of the GLB Act, progress has been achieved in making this new supervisory framework
operational, as the regulatory agencies have worked to enhance interagency cooperation and
information sharing. These efforts are especially important in view of the wide distribution of
various responsibilities among different agencies. In particular, the continued emphasis on
refining the program for the supervision of large complex banking organizations, with the
focus on evaluating and reviewing internal systems and controls for risk management, is
welcome.
16.
The United States should continue to be a major force for further liberalization of
trade on a multilateral basis, and efforts to initiate a new round of multilateral trade
negotiations should remain the key priority. At the same time, the IMP staff notes recent
progress with free trade initiatives on a regional and bilateral basis and recognizes the
beneficial effects that such negotiations may yield for global trade liberalization. The IMP
staff also welcomes the renewed efforts by the Administration to obtain Trade Promotion
Authority because of the important role it could play in securing commitments from other
countries to conclude trade liberalization agreements. Improvements in market access
provided in the African Growth and Opportunity Act and the Caribbean Basin Enhanced
Initiative are useful steps in enhancing growth prospects for countries in these regions, and
the IMP staff encourages the authorities to take additional needed steps to provide duty- and
quota-free access to the U.S. market for all least-developed countries.
17.
The slowdown in U.S. economic activity and the continued strength in the dollar
may give rise to increased demands for import protection, as suggested by the recent
initiation of a safeguard investigation of the steel industry. Such protectionist pressures
need to be strongly resisted. To enhance market competition with substantial benefits to the
economy overall, the IMP staff believes that a change in the administration of antidumping
and countervailing duty procedures is needed. Such import protection should be provided
only in those cases where foreign producers are found to be engaged in anticompetitive
behavior.
18.
While U.S. agricultural policy involves lower levels of overall support than in many
OEeD countries, supplemental actions taken in recent years to alleviate financial

-6-

difficulties faced by U.S. farmers in the context of declining world commodity prices have
created perverse incentives in the U.S. farm sector and have had an adverse impact on
producers in other countries. Refonns implemented in 1996 under the Federal Agriculture
Improvement and Refonn (FAIR) Act sought to move government assistance to the sector
away from price supports and toward income support. The recent practice of providing
supplemental assistance appears to have impeded and prolonged adjustment in the fann
sector. In fonnulating the new farm act this year, the IMF staff recommends that the
authorities return to the original goals of the FAIR Act and significantly reduce income
support payments and resist pressures to extend support to a wider range of crops. Also, steps
need to be taken to eliminate, or at least to substantially scale back, the crop loan program,
which continues to distort production decisions.
19.
ODA in recent years has remained at historically low levels of around 0.1 percent
of GNP, compared to an average of 0.2 percent during the 1980s and early 1990s, and the
FY2002 Budget does not envisage an increase. The IMF staff encourages the authorities to
make further efforts to raise foreign assistance. At the same time, the IMF staff welcomes the
support for the enhanced RIPC initiative, with U.S. commitments to the RIPC trust fund and
bilateral debt-reduction initiatives likely to be in place in FY 2002.

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lRFASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

u.s. International Reserve Position

06/26/01

u.s.

The Treasury Department today released
reserve assets data for the week ending June 22, 2001. As indicated in this
table,
reserve assets totaled $64,706 million as of June 22, 2001, dovvn from $65,044 million as of
June 15, 2001.

u.s.

in US millions)

· Official U.S. Reserve Assets

TOTAL
. Foreign Currency Reserves
a. Securities

Euro
5,171

June 15. 2001

June 22. 2001

65,044

64,706

Yen
10,718

TOTAL
15,889

Euro
5,147

Yen

TOTAL

10,607

15,755

Of which, issuer headquartered in the U. S.

· IMF Reserve Position

, Special Drawing Rights (SDRs)
· Gold Stock

· Other Reserve Assets

8,751

4,640

13,391
0
0
0
0

8,699

4,592

0
0

14,207

14,146

10,512

10,467

11,046

2J The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
jollar ten:ns at the official SDRJdoliar exchange rate for the reporting date. The IMF data for June 15 are final. The entries in the table above
lor June 22 (shown in italics) rerlect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at $42.2221 per fine troy ounce: Values shown are as of April 30, 2001. The March 31,2001 value was
511,046 million.

0-446

13,291
0
0

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
June 15. 2001
1. Foreign currency loans and securities

June 22. 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
June 15, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.e. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

June 22, 2001

o
o

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

ElltBAI\GOED umn. 9: 00 A.X.
~e 27, 2001

p~c

oomTACT: Office of Financing
202-691-3550
JlEDU COBl'AC'l': Office of Public: Affairs
202-6~:a-2960

On June 28, 2001, the Treasury will l:>uy back up to $1,750 million par
of i~s outstanding issues that mature between Februazy 2019 and Feb:rua.ry 2023.
'treasury reserves the right to a.ccept J.ess than the announced amount.
~s debt buyback (redemption) operation will :be conducted by ,::,ea.sw:y.l s
Fiscal Agent, the Federa.l Reserve Bank of Hew York, using its Open xarket
operations system. Only institutions that tiie Pederal. Reserve Ba:I:Lk of Hew
11'od:. bas approved to conduct Open Market transactions may submit offers on
HUl.! o~ cbem.el....... aza4 tl:&elzo CN.tcama:'8. O~i:.:'. at the hi.gha8t acceptec1
~ic. for & p&:t~cu1&r i ••ue ~ De accepted C~ a prorated ~is, rounded up
to the next $100,000. As a resul.t of this rounding, the Trea.su:y may buy
back an aacunt slightly larger than the one am:1Ounc:ed above.

~s debt l:Nyback operation is governed by the terms aDd
forth in 31 en Part 375 aDd this az:mowu:emant.

ccmditio~s

set

'!'be debt buyba.c:k operatioD regul.ations are aval.lable 011 the Bureau of

ella Public: nebt' s website at "'"'. public:debt. treu • gov •
Details about the operation and each of the el.igib1e issues are givan
Ln

t;Ae Q~~AdL04 bJ.9'iW.~vAt ••

~tt.cb:ment

0-447

'or press relelUe,. speeches, pul1lie sc"IudMles tuUloJflCiIll biographUs, call ollr 24-lIollT /u line at (202) 622~Z040

June 27,

200~

~&:' ~t to be bought: back •••• ~ eo $1,750 million
Operation date ••••••••••••.••••• JUne 28, .2001
Operation close time •••••••••••• 11:00 a.m. e&ster.n daylight saving time
Sett1ament date ••••••••••••••••• JUly 2, 2001
JCi niDpua par offer amount ......... $100,000
Ha1t~1es

of par •••••••••••.••••

$~OO,OOO

Foxmat for offers ••••• Expressed in tel:1llS of priee per $100 of par wi.th
three cleci 1M ls. The first ewo decimals represent
fractional. 32111!a of a C!o11ar. The t.hircl decl.ma.l
represEmts eighths of a 32zd of a. dollar, and must
be a 0, 2 , ' or 6.
Delivery instructions ••••••••••• ABA RUmber 021001208 FRB mYC/CUST

'l'reasury issues eligible for debt buyback operation (in millions) :

Par Amount Par Amount
CQU.pon

Haturit:y

bee (%)
8.875

Date
02/15/2019

8.125

08/15/2019

8.S0Q
8.750
8.750

02/15/~Q20

7.875
8.125

08/15/2020
O~/1.5/2021

8.125
8.000

05/15/2021
08/1.5/2021
11/15/20:21.

7.250

08/~5/.aD~2

7.625

11/15/2022
02/15/2023

7.125

•

05/15/2020

Par

~ts AX"U

COSIP

Par Amount

Number
912810 EC 8
912810 ED 6
912810 EE
912810 EP 1
912810 EG9
912810 1m 7
912810 l!iJ 3
912810 EK 0
912810 EL B

OutstanClin.g~

91.2810 EM 6
912810 EN 4

912810 EP 9
Total
o~

15,085
19 1 281
9,8S8
8 1 197
1.8,166
10,248
10,474
10,1.73
31 .. 177

Privately
Held*
12,712
16,741
8,402

lIela as
S'1'RI:PS~"

5,806
976

2,266

Ei:,696

4,738

15,623
9,1.4.1
8,856
8,515
27,729

9,216

1.7,983

10 , 238

9 , 27.7

837

7,934
16,899

6,333
14,264

167,760

1404,289

3,339
6,206
58,231

854

4,697
l,313

J'U.De 26, 2001.

Par amow:Lts are as of JU.zla 25, 2001.

The difference between ~e par amount outstan"iJ:lg and the par amount
Privately bel.Cl is the paz- a:aaw:Lt of those issues hel.d by the :Federal
Rase%"V'e System ..

D EPA R T 1\1 E N T

IREASURY

0 F

THE

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W .• WASHINGTON, D.C .• 20220. (202) 622-2960

FOR IMMEDIATE RELEASE
June 27, 2001

Contact: Tasia Scolinos
(202) 622-2960

ROBERT C. BONNER FORMALLY NOMINATED TO SERVE AS COMMISSIONER
OF THE U.S. CUSTOMS SERVICE
On Tuesday, June 26 th , the White House formally nominated Robert C. Bonner for the
position of Commissioner of Customs at the Department of Treasury. Judge Bonner brings a
wealth of experience to the Department of Treasury and the U.S. Customs Service. He is
currently a partner in the Los Angeles office of Gibson, Dunn & Crutcher. He joined the firm
after having served as a United States District Judge, the United States Attorney for the Central
District of California, and as the Administrator of the Drug Enforcement Administration (DEA).
Judge Bonner is graduate of the University of Maryland and Georgetown Law School.
After clerking for a U.S. District Judge, he served for three years on active duty in the United
States Navy, Judge Advocate General's Corp. Following his years in the military, Judge Bonner
spent four and one half years as an Assistant United States Attorney in Los Angeles before
turning to private practice in 1975. In 1984, Judge Bonner returned to public service as the
United States Attorney for the Central District of California (1984-1989). He was subsequently
appointed to the United States District Court for the Central District of California by former
President Bush in 1989 (1989-1990). Former President Bush went on to appoint him as
Administrator of the Drug Enforcement Agency in 1993 (1990-1993).
Judge Bonner is a fellow of the American College of Trial Lawyers and a past president
of the Federal Bar Association, Los Angeles Chapter. He was the Chairman of California's
Commission on Judicial Performance, and is a member of the California and District of
Columbia bars. He is on the Board of Directors of the Los Angeles Chamber of Commerce, and
he recently served as co-chair of California Lawyers for Bush-Cheney.
Judge Bonner is a native of Wichita, Kansas. He and his wife of thirty-one years,
Kimiko, currently live in Pasadena, California. They have one daughter, Justine.

PO-448

Farpress releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Government Printing Olke

1 'N8

- 6 t 9-559

D EPA R T 1\1 E N TO."'

THE

1REASURY (.~~

T REA SUR Y

NEW S

OffiCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622·2960

EMBARGOED FOR DELIVERY
June 27, 2001

Contact: Tony FraHo

(202) 622-2960

EXCELLENCE AND THE INTERNATIONAL FINANCIAL INSTITUTIONS BY
PAUL H. O'NEILL SECRETARY OF THE TREASURY
TO THE ECONOMIC CLUB OF DETROIT
DETROIT, MICHIGAN

Thank you for inviting me to speak to the Economic Club of Detroit. You are one of the
premier venues for important economic discussion and I welcome this opportunity today to pull
together in a more complete fonn some of the things I have been saying and acting on since I
became Secretary of the Treasury last January.
Many of you know me from past business associations or from our work together in
helping non-profit organizations. None of you will be surprised to know that I have brought my
devotion to the idea of excellence to my new pursuits in the government. I am questioning every
practice I encounter to see if there is a way to create more value for the American people who
pay the bills. A companion part of this quest is to improve the sense of satisfaction for the
people in the government who do the work.
My particular focus today is the International Financial Institutions. I will talk to you in
the familiar tenus of economics and process and public policy, but before I do that I want you to
know that my passion for these subjects comes from forty years of traveling and working in the
world - seeing first hand what it means for an individual human being to have a life without
hope. Many of you have seen what I have - babies born in the dust, young children afflicted by
diseases that are caused by the absence of clean water and sanitation, young adults who have no
education. Putting an end to these conditions is why we need to care about the perfonnance of
the International Financial Institutions.
Since their inception the international financial institutions - the IMF, the World Bank
and the regional development banks - have spent hundreds of billions of dollars to reduce
poverty and address financial crises around the globe. The World Bank group alone has lent
$470 billion since its inception, and $225 billion injust the last decade. Visit some of the
poorest nations in the world, and you will see that we have too little to show for it. It's time for
a new approach to eliminating poverty.

PO-449
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Today, more than 1.2 billion people around the world live on less than $1 a day. In the
United States, the average income is nearly $90 per day. Virtually all of those differences can be
explained by differences in productivity. Poor countries are poor because productivity is low.
And higher productivity translates directly into higher incomes. The best way to alleviate
poverty is to increase people's incomes.
That is our challenge - raising productivity to raise living standards around the world.
It's a challenge that we in the world's wealthiest and most innovative and optimistic nation
should relish. The people of the world can achieve better living standards the way we have through the constant improvement of and rewarding of skills and ideas.
To spread the principles that have made America prosperous, we must continue to
promote more open trade around the world and we must focus the international financial
institutions on nourishing the seeds of market economics.
Some doubt the ability of the international financial institutions to meet that challenge. I
shared their concern, even before I became Treasury Secretary, that these institutions were too
often associated with crisis conditions or failure. When respected elder statesmen and scholars
call for closing down the IMF, it is clear that we have a major repair and restoration job before
us.
I believe we can focus the vast knowledge in these institutions and help them to be
effective in achieving world economic development. We have begun to engage the institutions
and all of the other Nations that fund them, to encourage change, step-by-step. As we do so, we
are holding up the banner of excellence. For us excellence means: the MDBs clearly associated
with improving standards of living in the developing world based on productivity growth and,
for the IMP, careful monitoring and prompt decisions before financial crisis conditions threaten
economic order in the world.

The Multilateral Development Banks
The work of the development banks has been too diffuse. If we are to accomplish our
goal of raising living standards around the world, we must focus intently and solely on projects
that raise productivity.
So, here is our approach: In the case of each new loan, each new grant, each new project,
each new program, we need to ask: "How is this flow of funds going to raise productivity or
raise income per capita?"
How do you increase productivity growth? There are three elements to improving
productivity: improvements in human knowledge, new and better physical capital, and ongoing
entrepreneurial activity. The recent history of the U.S. makes clear how important improved
education and capital are to individual entrepreneurs. One has only to look at the American
farmer. As fanners learned new techniques and developed new machinery, fann output per unit
of farm labor grew by more than eight times between 1948 and the 1990s. In contrast,
agriculture value-added per worker in sub-Saharan Africa is lower now than it was 20 years ago.

Many of the poorest countries are primarily agricultural. It used to be thought that
forcing the pace of industrialization was the path to progress. But putting huge uncompetiti ve
industrial plants in poor countries had too little payoff in lives of the general population. Such
policies disrupted lives and traditional communities as young men left their families and
communities to stream into growing industrial cities. The social and health consequences are all
too obvious and deplorable in all too many developing countries. And the huge state-owned
industrial firms are now bankrupt or heavily subsidized by the toil of common people.
We now understand that investing in agriculture while creating the environment to
diversify into competitive, privately owned manufacturing is the key to development. But there
is still more to be done in focusing on productivity.
So how can the World Bank and other MDBs contribute to those three factors underlying
productivity? First, expanding human skills and knowledge. One of the most fundamental
things - call it a universal truth - is that education is inextricably linked to improving living
standards. If you want to see higher rates of productivity growth, the people need knowledge
and skills. So, I would like to see the MDBs place greater emphasis on education. President
Bush has made education a top priority for the U.S. economy. It should be a top priority for
Nations around the world. Over the past 5 years, education projects accounted for only 7 percent
of total World Bank lending. That must change.
Second, productivity growth requires capital, so you need open trade and stable capital
flows from abroad. But not all capital investment is equal. You need to make real products for
real customers in competitive markets. As the MDBs provide investment assistance it is
important that they take a "whole world" view, and not induce countries to invest in sectors that
are already over-supplied.
Finally, the role of the entrepreneur is critical, and almost intangible. How do you invest
in idea creation? If we knew that, we'd solve all the world's problems. We do know that some
things are necessary, ifnot sufficient, to create an entrepreneurial environment. To spark
innovation, you need the rule oflaw, enforceable contracts and a stable government process with
a minimum amount of corruption. Without these, there is no reward to innovation - without
assurance that you can own a new idea, who will bother?
We must insist that the MDBs reinforce these bedrocks of a market economy. We must
establish as a precondition that we will not tolerate corruption. Poverty is not an excuse for
corruption. It is not an excuse for not having the rule of law. Poverty is a symptom and it will
only go away when these basic conditions for lasting growth are in place.
Within this strategy for setting priorities based on productivity enhancement, let me
propose some specific ways to use taxpayer resources more effectively:
I think the World Bank and the other multilateral development banks should be clear
about the instruments of assistance they use. When they give a nation money and call it a loan,
then I think they should expect they are going to get their money back with interest. Iftheir
intent is not to get the interest and principal back, then they should call it a grant.

By misusing loans we've allowed many of the poorest nations to become so highly
indebted that they cannot service the loans they already have, let alone more. Weare making
progress cleaning up those situations. They must never happen again. We teach a bad lesson to
the recipients when we confuse loans with grants because the message is: obligations may not be
real obligations.
I believe that the MDBs should adopt a bolder, more aggressive stance on the use of
grants for the poorest countries. How can you make a loan for an already heavily indebted
country to provide basic health and education services to its poorest people or to help fight
HIV I AIDS and other infectious diseases? How will such economies generate the economic
returns with which to pay back funds? Projects like these should be considered for grants, not
loans.
As we become clear about the instruments of assistance, we also need to become more
rigorous about measuring results. For example, in education it is clear that inputs - classrooms,
teachers - are a secondary measure. What is really important is the product of education - an
ability to read and write and compute at an appropriate level. When you have achieved that, you
have achieved a critical milestone for the prospects of economic development. We need to be
hard-minded and demanding that the inputs produce valuable outputs so that people in the
developing world can achieve a standard ofliving that we know is attainable.

Graduation of Middle Income Countries. I believe that the MDBs should focus their
resources first on countries that do not have access to private financial markets. As the financial
conditions of individual countries improve, we should implement a system of loan rates that
moves toward the private market interest rate. Then we would not confuse the assistance role of
the banks from the point of view of competing with private enterprise.
Better Coordination. I also believe that the multilateral development banks can improve
their coordination. More work is needed to bring greater consistency, simplicity and clarity
where more than one institution is operating in a particular country. The MDBs need to do a
better job of sharing ideas and lessons learned about what works and what does not work.

In addition, it is important that the assisting institutions put themselves in the shoes of the
recipient countries as they impose conditions. Is it practical to assume that a President in a
country without a well-developed government system can do all of the well-intentioned things
we tell them they must do? If the answer is no, we need to reduce the number of things we insist
on to those that are measurable and that we mean to enforce.
The International Monetary Fund
Like the World Bank, the IMF needs to focus on core objectives. The core objectives of
the IMF are to (1) promote sound monetary, fiscal, exchange rate, and financial sector policies,
(2) carefully monitor economic conditions, and (3) deal with critical problems in the
international financial system as soon as they are detected. In the late 1990s, the IMF went well
beyond these core objectives; putting too many conditions on some loans and putting too much
money into some places in the face of dubious economic and political conditions.

Crisis Prevention. Having inherited a few international financial crises when I came into
this job, I have spoken often about the need for better crisis prevention at the IMF. Crises strike
when there is a failure to detect financial stresses or imbalances, or when there is a failure to
make the necessary decisions to reduce the stresses and imbalances that have been detected. The
problem in recent years has clearly been the latter. We simply must do better - and that is why I
continue to return to this theme.
Conditionality. In our policy review work at Treasury, we have been arguing that
conditionality can be substantially reduced, so that what is left is more enforceable, measurable,
and purposeful and in the interest of the people in the recipient countries. For example, in the
case of Indonesia, the IMF had a very long list of conditions, none of which were undesirable per
se, but some of which went well beyond the IMF's core area of expertise. Some of these things
were more properly in the province of people inside the country.
Moral Hazard and Contagion. Another thing that the IMP should strive for is a way to
reduce so-called moral hazard. It is a fundamental truth that risk and reward must go hand in
hand. Disassociating the two is a recipe for disaster. We need to figure out a way to let people
who reap the high returns suffer the consequences of that risk without letting them off the hook
with the taxpayers' money.
Understanding contagion will enable us to deal more effectively with this moral hazard
problem. Frankly, I don't believe that we should accept the notion of contagion as something
that God intended for us to have. I think we should work very hard to develop mechanisms to
defeat contagion. If you look at Turkey, Argentina and Indonesia today, you would be very
hard-pressed to make a case that they were closely related to each other. We should not accept
the proposition that a weakening financial condition in one difficult place inevitably creates a
chain reaction of investors withdrawing from other markets.
Exaggerating the possibility of contagion leads to too-frequent intervention because, in
effect, we convince ourselves we don't have a choice. That is to say, if we don't act, the
consequences will be multiplied in a world-wide rout of the financial system. Making money
available on this theory, we promote the idea that we will intervene everywhere on the spur of
the moment in order to protect ourselves against the consequences of one nation losing its
financial footing.
If we can solve the problem of contagion, we can deal in a much more forthright and
forceful way with individual countries and investors. Ifwe do not have to worry about
contagion, it is going to be a lot easier to say "you brought this situation on yourself in spite of
the best possible advice and we are not going to bail you out."

Recent Financial Crisis
How do we make these institutional changes? Clearly, we don't just stop everything and
start over. In the case of Turkey, for example, we inherited a crisis and a set of expectations
surrounding that crisis. We could not start from scratch. Nonetheless, the steps we took
represent the beginning of a different pathway for the future.

We stressed several principles in our dealings with Turkey. First, we did not provide
additional bilateral financial assistance to Turkey. Rather, we said that the IMF should be the
instrument of choice when there is a need to deal with financial instability or crisis conditions.
In general we should not become engaged in bilateral assistance on top of, or in lieu of,
appropriate intervention by the IMF. Since IMF resources are limited - and this is very
important - this decision was a statement that there are indeed limits on what the official sector
will do in such situations.
Second, we stressed the importance of prior actions with a firm commitment from the top
political leadership. We feel that a forthright, on the record, very clear position of ownership of
the changes that are going to be made should be a condition for the receipt of assistance; and that
is what the Turkish government agreed to do. Going forward, Turkey's success will depend on
that government following through on its commitment. Modifying the practices and
expectations of the past in dealing with such situations will take time, but we have begun to do
so.
Conclusion
Next week I will be meeting in Rome with my partners in the G-7, as well as with the
Heads of the Multilateral Development Banks. I look forward to this meeting as an opportunity
to move forward on the priorities that I have described to you today.

Thank you.

D EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE. N.W.• WASHINGTON. D.C.. 20220. (202) 622.2960

FOR IMMEDIATE RELEASE
June 27,2001

Contact: Public Affairs
(202) 622-2960

STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL

The Administration respects the independence of the Federal Reserve in making decisions about
our nation's monetary policy. We share the Federal Reserve's goals of maintaining healthy
economic growth while preserving low inflation.

-30-

PO-450

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

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
Ju.lie 27, 2001

CONTACT:

Office of Financing
202 -691-3550

RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:

3 7/8%
R-2003
9128276Z0
High Yield:

Issue Date:
Dated Date:
Maturity Date:
3.990%

Price:

July 02, 2001
June 30, 2001
June 30, 2003

99.781

All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 74.43%. All tenders at lower yields were accepted in full.
Accrued interest of $ 0.21060 per $1,000 must be paid for the period
from June 30, 2001 to July 02, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive

Tendered
$

SUBTOTAL

3,666,667

3,666,667
$

28,559,898

9,900,018
1,100,061
11,000,079 1/

24,893,231

Federal Reserve
TOTAL

23,793,170
1,100,061

Accepted

14,666,746

Median yield
3.968%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
3.900%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 24,893,231 / 11,000,079 = 2.26
NO FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION. THE STRIPS
MINIMUM IS $1,000.
1/ Awards to TREASURY DIRECT

PO-4S1

$901,515,000

http://www.publicdebt.treas.gov

D EPA R T 1\1 E N T

0 F

THE

T REA SUR Y

NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE. N.W. - WASlllNGTON. D.C. - 20220. (202) 622·2960

FOR IMMEDIATE RELEASE
June 28, 2001

Contact: Public Affairs
(202) 622-2960

PRESIDENT BUSH NOMINATES ROSARIO MARIN TO SERVE AS
UNlTEDSTATESTREASURER
President Bush has fonnally nominated Rosario Marin to be the next Treasurer of the
United States in the Department ofthe Treasury.
A current Councilwoman and a fonner Mayor of the City of Huntington Park, Rosario
Marin was fIrst elected to the city council in 1994. In March of 1999, Ms. Marin was
overwhelmingly re-elected to the city with a population of 85,000 of which 99% are Latinos. In
addition, Ms. Marin concurrently works for AT&T as Public Relations Manager for the Hispanic
Market in the Southern California Region.
Previously, she was with the OffIce of Governor Pete Wilson in Los Angeles, California
as the Deputy Director of the Governor's OffIce of Community Relations and prior to that served
as the Assistant Deputy Director of California State Department of Social Services. In addition,
Ms. Marin also served as the Chair of the State Council on Developmental Disabilities and
previously was the Chief of Legislative Affairs for the Department of Developmental Services.
If confInned, Rosario Marin would become the 4l 5t Treasurer of the United States - an
offIce older than the Treasury Department itself. She would have responsibility for oversight of
the Bureau of Engraving and Printing, the United States Mint, and the Savings Bond Marketing
OffIce within the Bureau of the Public Debt.
A graduate of California State University in Los Angeles, she also graduated from
Harvard University's John F. Kennedy School of Government Program for Senior Executives in
State and Local Government.
A recipient of numerous awards, she is only the second recipient of the distinguished
Rose Fitzgerald Kennedy Prize on June 1995 at the United Nations. Most recently, Ms. Marin
was honored by being the only public elected offIcial to receive the Excellence in Public Service
Award at the 2000 Latino Perspectives Conference in Sacramento. In addition, she was one of
two elected offIcials to be featured on the "20 Up and Coming Latinas" in the Los Angeles
Business Journal, February 2000 issue.
PO-452
For press releases, speeches, public schedules and official biographies, call our 24-hoor fax line at (202) 622-2040
'U S Goveevweol PnotIDo OHice: 1998· 619-559

Ms. Marin has been appointed to numerous commissions and boards. They include:
California Film Commissioner; Member of Special Olympics International Board of Directors;
Former Vice President and current member of Latino Caucus of the League of CA Cities;
President of Mayors and Councils Department of the League of California Cities; Member of
Public Safety Policy Committee of the League of California Cities; Board Member of Minority
Organ Tissue Transplant Education Project; Membership Committee Member of the National
Association of Latino Elected Officials; Board Member of HOPE (Hispanas Organized for
Political Equality); and Former Chair and current member of Southeast Community
Development Corporation.
Councilwoman Marin and her husband Alex Marin of 19 years have three children: Eric, 15;
Carmen, 11; and Alex, 9.

-30-

NEWS

TREASURY

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT:
Office of Public Affairs
202-622-2960

FOR IMMEDIATE RELEASE
June 28, 2001

TREASURY DEBT BUYBACK OPERATIPN RESULTS

Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
par of its outstanding issues. A total of 12 issues maturing between February 2019 and
February 2023 were eligible for this operation. The settlement date for this operation will
be July 2, 2001. Summary results of this operation are presented below.
(amouncs in millions)

Offers Received (Par Amount) :
Offers Accepted (Par Amount):
Total Price Paid for Issues
(Less Accrued Interest):
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield
of all Accepted Offers

(%):

Weighted Average Maturity
for all Accepted Securities (in years):

$7,643
1,750

2,258

12
11

5.726

19.5

Details for each issue accompany this release.

PO-4S3

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

June 28, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS

(amounts in millions, prices in decimals)
Table I

Coupon
Rate (%l

Maturity
Date

Par
Amount
Offered

8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
7.125

02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
02/15/2023

1,252
1,156
641
468
864
276
565
346
914
200
390
571

Par
Amount
Acce]2ted

Highest
Accepted
Price

Weighted
Average
Accepted
Price

252
185
80
130
231
30
230
56
280
0
150
126

135.015
126.953
131.593
134.718
134.937
125.000
128.156
128.312
127.000
N/A
123.000
116.906

134.976
126.911
131.578
134.711
134.930
124.954
128.154
128.297
126.981
N/A
122.979
116.903

Weighted
Average
Accepted
Yield

Par Amount
Privatelv Held*

5.702
5.719
5.721
5.718
5.721.
5.738
5.732
5.736
5.736
N/A
5.743
5.748

12,460
1.6,556
8,322
6,566
15,392
9,111.
8,626
8,459
27,449
9,277
6,183
14,138

Table II

Coupon
Rate (0Ji 1

Maturity
Date

N U mbe r

Lowest
Accepted
y'e1d
~

8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
7.125

02/1.5/2019
08/15/2019
02/15/2020
05/1.5/2020
08/15/2020
02/15/2021
05/15/2021.
08/15/2021
11/15/2021.
08/15/2022
11/15/2022
02/15/2023

91.2810EC8
912810ED6
912810EE4
91.2810EF1
912810EG9
91.2810EH7
912810EJ3
91.2810EKO
91.2810EL8
91281.0EM6
912810EN4
912810EP9

5,699
5,716
5.720
5.718
5.720
5.735
5.732
5.735
5.735
N/A
5.742
5.748

CUSIP

Total Par Amount Offered:
Total Par Amount Accepted:

7,643
1,750

Note: Due to rounding, details may not add to totals.
*Amount outstanding after operation. Calculated using amounts reported on announcement.

D EPA R T 1'1 E N T

() J.'

T U E

T REA SUR Y

NEWS
ornCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlllNGTON, D.C. - 20220. (202) 622·2960

Contact: Tara Bradshaw
(202) 622-2960

For Immediate Release
June 28, 2001

TREASURY ANNOUNCES EFFECTIVE DATES
OF SLOVENIA INCOl\-IE TAX TREATY
The Treasury Department today announced that the bilateral income tax treaty with
Slovenia entered into force on June 22, 2001, upon the exchange of instruments of ratification in
Washington. The treaty, to which the U.S. Senate gave advice and consent to ratification in
1999, represents a new treaty relationship for the United States.
The treaty applies, with respect to taxes withheld at source, in respect of amounts paid or
credited on or after September 1, 2001, and, with regard to other taxes, in respect of taxable
years beginning on or after January 1, 2002.

-30-

PO-4S4

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

D EPA R T 1\1 E N T

0 F

THE

T REA SUR Y

NEWS

TREASURY

OFFICE OF PU8L1C AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W. e WASHIN(;TON. D.C.e 20220 e (202) 622.2960

EMBARGOED UNTIL 2:30 P.M.
June 28, 2001

Contact:

Office of Financing
202/691-3550

TREASURY TO AUCTION CASH MANAGEMENT BILLS
The Treasury will auction approximately $13,000 million of 9-day
Treasury cash management bills to be issued July 3, 2001. The noncompetitive
and competitive closing t~e will be 11:30 a.m. eastern daylight saving t~e.
Tenders will not be accepted for bills to be maintained on the book-entry
records of the Department of the Treasury (Treasu~Direct).

up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FIMA) accounts bidding through the Federal Reserve Bank of
New York will be included within the offering amount of the auction. These
noncompetitive bids will have a limit of $200 million per account and will be
accepted in the order of smallest to largest, up to the aggregate award limit
of $1,000 million.
The auction being announced today will be conducted in the single-price
auction format. All competitive and noncompetitive awards will be at the
highest discount rate of accepted competitive tenders. The allocation
percentage applied to bids at the highest discount rate will be rounded up to
the next hundredth of a whole percentage point, e.g., 17.13%.
NOTE: Competitive bids in cash management bill auctions must be
expressed as a discount rate with two decimals, e.g., 7.10%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Details about the new security are given in the attached offering
highlights.
000

Attachment

PO-455
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERING
OF 9-DAY CASH MANAGEMENT BILLS
June 28, 2001
Offering Amount ......•........•.•.• $13,000 million
~lic Offering •••••••.•••••.••.••• Offering amount less the amount awarded for FIMA
accounts
Description of Offering:
9-day Cash Management Bill
term and type of security
!OSIP n'UJl\ber ..••...•.•..........•.. 912795 BC 8
Auction date •••••••••••••.••••••••• July 2, 2001
issue date .•.•••.••.•...•...••••••• July 3, 2001
~turity date •••.••.••.•••••.•••••• July 12, 2001
original issue date .•......•.••.••. January 11, 2001
currently outstanding •.•••••••••••• $29,963 million
Min~um bid amount and multiples ••• $1,000
ubmission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate
of accepted competitive bids.
oreig.n and International Monetary Authority (FIMA) bids: Noncompetitive bids
submitted through the Federal Reserve Banks as agents for FIMA accounts. Accepted
in order of size from smallest to largest with no more than $200 million awarded
per account. The total noncompetitive amount awarded to Federal Reserve Banks as
agents for FIMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that
brings the aggregate award total to the $1,000 million limit. However, if there
are two or more bids of equal amounts that would cause the limit to be exceeded,
each will be prorated to avoid exceeding the limit.
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 $1 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 Rate:
Maximum Award: 35% of public offering

35% of public offering

receipt of Tenders:
Noncompetitive tenders:
Prior to 11:30 a.m. eastern daylight saving time on auction day
compet-i tive tenders:
Prior to 11:30 a.m. eastern daylight saving time on auction day
pyment Terms: By charge to a funds account at a Federal Reserve Bank on issue date,
or payment of full par amount with tender.

OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- 20220 - (202) 622-2960

EMBARGOED UNTIL 2:30 P.M.
June 28, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $27,000 million to refund $19,521 million of publicly held
bills maturing July 5, 2001, and to raise about $7,479 million of new cash.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $10,508 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts will be in addition to the offering amount.

The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Details about each of the new securities are given in the attached
offering highlights.
000

Attachment

PO-456
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

June 28, 2001
$12,000 million
Offering Amount .•.••••.••••..••••..•••. $15,000 million
Public Offering •.....•.•.•..•••.•..•••. Offering amount less the amount awarded for FIMA accounts
Description of Offering:
Term and type of security •••••••...•••. 91-day bill
CUSIP ntunber ....•••.••..•..•.•••..•..•• 912795 HR 5
Auction date •••.••••••.••••.•••.•••.••• July 2, 2001
'Issue date . . . . . . . . . . .

*' • • • • • • • • • • • • • • • • •

Maturity date •••••••••.••••.•••••••••..
Original issue date •••.•••••.•••..•••..
Currently outstanding ••••••••••••••••••
Minimum bid amount and multiples •••••••

JUly 5, 2001

October 4, 2001
AprilS, 2001
$12,312 million
$1,000

182-day bill
912795 JA 0
July 2, 2001
July 5, 2001
January 3, 2002
July 5, 2001
$1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FlMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FlMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate award
total to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%,
7.105%.
(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 $1 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 Rate •••. 35% of public offering
Maximum Award •••••••••••••••••••.••••••••.• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders •.. Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders •••••• Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Ter.ms: By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
Treasu~Direct customers can use the Pay Direct feature which authorizes a charge
to their account of record at their finanoia1 institution on issue date.

D EPA R T ]\II E N T

o.~

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220 • (202) 622-2960

June 29, 2001

Contact: Public Affairs
(202) 622-2960

MEDIA ADVISORY
Treasury Secretary Paul H. O'Neill will hold a pre G-7 press conference at
11 :00 a.m. EDT on Thursday, July 5, 2001 in the Treasury Department's
Diplomatic Reception Room (Room 3311),1500 Pennsylvania Ave. NW.
The Room will be available for pre-set at 10:00 a.m. EDT.

Media without Treasury or White House press credentials planning to
attend should contact Treasury's Office of Public Affairs at (202-622-2960), by
close of business Tuesday, July 3, 2001, with the following information: name, social
security number and date of birth. This information may also be faxed to (202) 6221999.

-30-

PO-4S7

For press releases, speeches, public schedules and official biographies, call m!1 24-hDur fa~ line at (2(2) 622-2040
·u.s. Government Prlntlcg Cif'C2

1998 - 619-559

DEPARTlVIENT

THE

TREASURY

NEWS

lREASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C. • 20220 • (202) 622-2960

ElVlBARGOED UNITL 2:30 P.M. EDT
June 29, 2001

Contact: Tara Bradshaw
(202) 622-2960

TREASURY SECRETARY PAUL O'NEILL STATElVIENT ON JULY 1ST DROP IN
WITHHOLDING RATES
Treasury. Secretary PaulO 'Neill made the following remarks at an event celebrating the
drop in the income tax withholding rates:

"Just about everyone across America knows by now that on July 23 rd taxpayers will start
receiving checks from the federal government, as payments for the retroactive reduction of a
portion of the 15% tax rate bracket to 10%.
"But there's another important July date that taxpayers also have cause to celebrate. On
July 1S\ for the first time since Reagan was President, income tax rates will drop for America's
taxpayers. New withholding tables go into effect, reflecting rate cuts that will let nearly 55
million taxpayers keep more of their own money.
"Cutting income tax rates is the strongest fiscal policy stimulus for our economy. And it
is happening exactly when the economy needs it, because President Bush worked with the
Congress to achieve quick action on his tax relief plan. I am delighted that this weekend the first
phaSe of long-term, across the board tax relief for hardworking American families becomes a
reality."

-30-

PO-458

Far presti revilSes, speeches, public scheduJ.es and official biogmiJhies, call our 24-1wur fa:::: line at (21)2) 622-2()4()

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

FOR IMMEDIATE RELEASE
July 02, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 9-DAY BILLS
9-Day Bill
July 03, 2001
July 12, 2001
912795HC8

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.75 %

Investment Rate 1/:

3.82 %

Price:

99.906

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 78.01%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered

Tender Type
Competitive
Noncompetitive

TOTAL

Accepted

40,000,000

a
40,000,000

13,000,103

°
$

13,000,103

Median rate
3.73 %: 50% of the amount of accepted competitive tenders
Has tendered at or below that rate.
Low rate
3.65 %:
5% of the amount
Jf accepted competitive tenders was tendered at or below that rate.
3ID-TO-COVER RATIO = 40,000,000 / 13,000,103 = 3.08
ID FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCT!ON.
/ Equivalent coupon-issue yield.

http://www.publicdebt.treas.gov

:)-459

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

FOR IMMEDIATE RELEASE
July 02, 2001

Office uf Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:

91-Day Bill
July 05, 2001
October 04, 2001
912795HR5

High Rate:

3.580%

Investment Rate 1/:

3.663%

Price:

99.095

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 66.17%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Accepted

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

SUBTOTAL

22,117,966
1,323,630
155,000

15,000,101 2/

23,596,596

TOTAL

. 5,429,064

5,429,064

Federal Reserve
$

29,025,660

13,521,471
1,323,630
155,000

20,429,165

23,596,596 / 15,000,101

1.57

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,041,864,000

http://www.publicdebt.treas.gov

PO-460

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
IMMEDIATE RELEASE
July 02, 2001

CONTACT:

~OR

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
July 05, 2001
January 03, 2002
912795JAO

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.500%

Investment Rate 1/:

3.612%

Price:

98.231

All noncompetitive and successful competitive bidders were awarded
:ecurities at the high rate.
Tenders at the high discount rate were
.llotted 64.81%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

SUBTOTAL

18,862,727
1,572,853
50,000

Accepted
$

12,000,260 2/

20,485,580

TOTAL

5,079,096

Federal Reserve
$

25,564,676

10,377,407
1,572,853
50,000

17,079,356

Median rate
3.470%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
3.430%:
5% of the amount
f accepted competitive tenders was tendered at or below that rate.

id-to-Cover Ratio
I
I

20,485,580 / 12,000,260

1.71

Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $1,212,911,000

http://www .pu blicdebt.treas.gov

PO-461

D EPA R T lVI E N T

0 F

THE

T REA SUR Y

NEWS

lREASURY

OFFICE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220. (202) 622-2960

Contact: Tasia Scolinos
(202)622-1996

FOR IlVIMEDIATE RELEASE
July 2, 2001

THE DEPARTMENT OF TREASURY RESPONDS TO FATF MONEY
LAUNDERING REPORT

Today the Treasury Department's Financial Crimes Enforcement Network (FinCEN)
updated its advice to U.S. banks and financial institutions following the recent FATF
announcement that The Bahamas, the Cayman Islands, Liechtenstein, and Panama have
implemented significant legal reforms to combat money laundering.
In conjunction with a review ofFATF's findings, and following technical assistance
provided by FinCEN to these countries, FinCEN informed banks and other financial institutions
that these four countries now have counter-money laundering regimes that generally comply with
international standards. The Treasury Department expects that these countries will continue to
take the necessary steps to implement their reforms and will continue to cooperate in the global
fight against money laundering.

Additionally, FinCEN will be assessing appropriate guidance for financial institutions
with respect to the six countries that were added to the F ATF list of "non-cooperative" countlies:
Burma, Egypt, Guatemala, Hungary, Indonesia, and Nigeria.
The FinCEN advisories will remain in force for the following countries, which also
remain on F ATF' s non-cooperation list: Cook Islands, Dominica, Israel, Lebanon, Marshall
Islands, Nauru, Niue, the Philippines, Russia, St. Kitts & Nevis, and St. Vincent & the
Grenadines. United States officials stand ready to provide appropriate technical assistance to
these jurisdictions as they work to remedy the deficiencies in their counter-money laundering
systems.
Copies of the advisories can be found on the FinCEN web site: www.llstrcas.gov/fincen.
See in particular AdvisOlies 9+ 12 regarding the BMPE and Colon Free Zone in reference to
Panama. Additional information can also be found on the FA TF web site: www.oecd.org/fatf.

-30-

PO-462

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

D EPA R T lVi E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220 • (202) 622-2960

u.s. International Reserve Position

07/03/01

The Treasury Department today released U.S. reserve assets data forthe week ending June 29, 2001. fu indicated in this
table, US. reserve assets totaled $64,355 million as of j1..ll1e 29,2001, do'YVIl from $64,629 million as of
June 22, 2001.

US miflions)

Official U.S, Reserve Assets

TOTAL
Foreign Currency Reserves

a. Securities
Of which, issuer headquartered in the

Euro

June 22. 2001

June 29. 2001

64,629

64,355

Yen
10,507

Euro

TOTAL
15,755

Yen

TOTAL

5,08510,566

u. s.

15,651
()

b, Total deposits with:
b,i. Other central banks and BIS
b.ii, Banks headquartered in the U.S.

8.ll. Of NhlCh, banks located abroad
b.iii. Banks headquartered outside the US.

b.iii. Of which, banks located In the U.S.

::3.399

-1.,59::'

13,::'91

3,609

-1.5'1'5

13 134

0
0

D
D

0
0

1-1.,102

IJ 001'

Special Drawing Rights (SDRs)2

10,435

iU, JOg

Gold Stock

1 1.046

11 0-1...1

IMF Reserve Position

:)ther Reserve Assets

Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open ivlarKet Account
iOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
~posits

reflect carrying values.

The items, "2. IMF Reserve POSition" and "3. Special Drawing Rights (SDRs)." are based on data provided by the IMF and are valued in
Jliar terms at the offiCial SDR/doliar exchange rate for the reporting date, The I MF data for June 22 are final. The entries In the table above
~ June 29 (shown in italics) reflect any necessary adjustments, including revaluation, by the U,S. Treasury to the prior week's IMF data.
Gold stock is valued monthly at $42.2222 per fine troy ounce, Values shown are as of May 31, 2001. The April 30, 2001 value was
1,046 million.

0-463

U.S. International Reserve Position (cont'd)

II. Predetermined Short-Term Drains on Foreign Currency Assets
June 22. 2001
1. Foreign currency loans and securities

June 29, 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
l. Other

II. Contingent Short-Term Net Drains on Foreign Currency Assets
June 22, 2001
. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
:. Foreign currency securities with embedded options
:. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S .
. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

June 29. 2001

o
o

I also plan to give our support to the Financial Action Task Force work on money
laundering. Progress has already been made by several of the nations identified by the FATF,
and I'm optimistic that the F ATF process will generate further improvements. I am pleased to
report that on another element of the fmancial abuse agenda--the OEeD harmful tax practices
initiative--we have made substantial progress in focusing the initiative on its core element of
infonnation exchange.
Ministers will want to touch on a number of issues in preparation for talks among the
Heads of State - notably progress in providing debt relief and the need to move beyond debt
relief in promoting economic and productivity growth in the poorest countries. Finally, my
colleagues and I will meet with Russian Finance Minister Kudrin and discuss recent progress in
Russia on market-oriented economic reforms and the creation of a more favorable investment
climate.
-30-

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: 24

Author(s):
Title:

Pre G-7 News Briefing with U.S. Treasury Secretary Paul O'Neill

Date:

2001-07-05

Journal:

Volume:
Page(s):
URL:

Federal Reserve Bank of St. Louis

https://fraser.stlouisfed.org

.f)

EPA. Rt T :\:1 E N T

0 F

H F..

-r

E ".\ SUR Y

TREASURY

NEWS

OFFICE OF PVBLle AnAIllS -1508 PENNSYLVANIA,AVENVE. N.W. eWASmN(rTON. D.C.- 20228.~2) 6Zz..U"

DIB&JtCOm) U'N'rtL 2: 30 P •••
.lUly ,5, 2001.

CO!Pl'AC."r:

'!'RZASmly TO

~:rOH

Office of J"lnancizLg202/691-3550

$5,000 lITLLTOl\l 01'

9-1/2-YDK 3-1/:1% ntFI.A-tIC»t-DmtnD RO'l'l!'.S
The ~ 1ri.11 &'U.C~i.~
~ AO~•• to ~se e&sh.
~~

b:L4 ~ ~ec!e~

'S,ooo

aeB4!tZT8

m:5.1.1J.ou of ~-1/2~ 3-1/2% £.D£l.••:i.oa-

£0:1:'

Ueir

0WI:l

accounts will M

ad4e4

~~ cff~.

tr» to ,1,000 millie:=. iD DODCCIIIIP&titi'ft bids frc::a I'oraigu a=4 hteZ'D&u'cma1
lfcmetazy Autborit:y Cl"IXA) ac:eouDt5 bic1di.Dg ~gb the Federal .serve BaDk of Maw
fork will be iDc:lw!lec! wit.h..i.21 the offe.ri.Dg amount of the wetion. ofte ••
DCACC'IIaP8titive b:ida wil.l. _~ • :L:Ia:i.~ of $200 a:i.ll.iOD per .CCO'Wl~ uad vi11. he
acaept:e4 Ul Che order o~ 8III&l.1.••t to largest, up ~ ~ aggz ....~. awaz'd l!.a1t
$1,000 mil.lion.

'!'hit auction w::!.11. 3M a=Dcmc:'te4 ill De .:f.ql.~e. aoe~:Loa lozma~. All..
competitive and. DtOZ:IC'c;mrpee1ei'98 awarda will. be at eh8 AisrbeR yiel.4 of ac:cepte4
ccmpetiti~ teDders.
'l'he allocation percentillJe applied to J»,4a .~ at the
bighest yield rill.. be Z'01ZZI4e4 up ~o Ue ~ l:z\m4re4u. of a whole peramatage
potDt, e.~., 11.13%.
SOl'lh

year

lfhe!1et lODg' posieiOJl ~Elg' t:.hre8hold amcunt for tUs 9-1./2Dote ill $1 ]:)ill.i.on.

.i.rz.£l.aeiOD-~8lted

I!'h() DOtas :being offered today

eliQoil)le for the S'rR:tPS progzam.

~ securitd.es i. gcwe%Ued by t.he t.enu and
il1 ~ 'DAi.:fozm Of£eri.Dg Cixcul.ar for the Sa1. aDA! XSsue ~

This offering of
~~i.olW set fc~

llarketahl.a Book-BD1:ry

Bills, Kotes, and lSODds (31 CF1t Part 356, as

MnezIded)

For orl..g'~ issue aiSCO'Qllt (OD», ntS regulatiozu~ perait Z'.~iD5r. of
mflaticm-!.ad exe4 ~i ties wi.t:hoa.e :reprd to O%D xul..es, pro'ri.de4 t.bt ~
nope=.1lWs oc~ not .ore thaD <me yea%' after t:be o::ig.iDa.l seew::i.t.ie. were first
issued to the pUblic. 'l1:LerafoJ:'8, tl:ua om l;izit does DOt apply to this auction.
De~1s ~t tl:&e sec=.rl.tY are gi..-en ..iA ·tlle ai:t:aehed. offeri.:lg lUgh1ights.

20-465

Por ;ress

re~eases,

.~.che., ;ub~~e s~.dales

aDd o~f~ci.I biographies,
Z4-bour fax liD8 at (202) 632-2040

ca~~

our

R:rGE:l..IGHTS OP
~-l/:-~

OFP'ERING TO THE PUBLIC OF

mFI..ATIcm-l:NDE'A'ED NO'I'ES 'TO BE ISSORD JULy 16, JOOi.
~ly

O!!erinr;
?~:.~~

S. 2001

••••••••••••••••••••••••••••....•••• $5 ,000 aillion

ot!"e::-iDg ....................................... ., ... o .... _w~ .........,.... .. !I.~--

amount
Description of Offering:
of se~iey •.••••••••.••••••.•.•..•••

Te~ and ~

awarC1o~

. .:. . .

fo: l"'l:KA

~tl

~-112~ ~l.~OD
~dnctes

(~)

Series .......... ,. ••••••••••••••••••••••••••••••••••.• A-20l.1
C'O'SrP n-u:nMr ••••••••••••••••••••••••••••••••••••••• 912821 6R 8
.Auction c1a. te .••..• ~ •••••
JUly 11, 2001
I;.sua Mea ............................................. .:JU.ly 16, 200l.
l).a.:.ad -da.t t!II . . . . . . . . . . . . . . . . . . . . . . . . . . . _ • • • • • • • • • • • • • • • • • Janu.a.ry 1.5, :2 0 0 J.
MAturity date .•••••••• : .••••••••••••••••••••••••••• Janua.:ry' lS, 201.1
lntares't rate '. ~ . . . . . . . . . . . . . . . . . . . . ~ .................. 3-1/2%
I

...........................

Amount oriqina21y issued •••••••••.••••••••••••••••• $6,001 mi21ion
Adjusted. amcu,ut; c::urreDtly OQeata=diJ1g ••• _ .••••••

••

$6,103 mill.ion
at auC't:5.c:m.

Ineerest payment dates .•••••••••••••.••••••••.••••• January 15 aDd JU1y 1S
Mjn;mlm bid amount and multiples ••••••••••••.•••••• $1,000

Accrued

~terest

.•••.••••••..•.•.••.•.•.•••••..•••• $0.09S11 per $1,000 (from
July ~5 to ~y 16, 2001)
interest ~e by inTestor •••••• $0.09688 per $1,000

Adjusted a~crued
Premium or ~s~t •.•••••••••••••••••••••••••••••• 00~ermdDed at

~~~

STlUPS J:n£o%m&tion:
Mj n;Imtm 8lrIOU.Ot r.~ ••••••••••••
$1, 000
eo:r-pu.s COSIP II'lImhe.r ••••••••••••••••••••••••••••••• • 912820 CA 9
TIIN conversion factor per $1,000 •••••••••••••••••• 10.054861623
.11

~s3ioD of ~ids:
NOZl.CCI:lpeti.eive bids:

•••••••••••••••

Accepted i= full

\Zp

to $5 million at the

big'hes~ aec:.ept~

yit14.

Foreign an«! Xnternati.OZlAJ. ~tary AUuori ty Cn:MA) b1da c !rc=c:CIIIIP"ti t i vw ld4s
sul:D.itted t.hrou.gh the Pede%al :Reserve Banks as agents for 7D£A &c~ts.

ACcepteQ i~ order of aiE8 fram ~le9t to larqese ~~ DO mere thaD $200
million awardee per aCCOWlt. '!'he to~ noncompetitive amount awarded to Federal
RBserve Banks as agents for PIMA accounts wi11 DOt e:r:eeed. $1.,000 million. A
~ingle bid that wou~d c:.aus.e the limit t.o be ex.e&eded will be partial.ly accepeed
in the amount tAat brings the aggregaee award total to the $1,000 mil.:licm lillU.t.
B~, if theZ'e are two or more biAs of. equal. &:IIOU.nts that WO\U.e causa the
limit 'to 1:>8 exeeede<1, each nJ.1. be prorated to avo;i.~ exceed..ing the 1:imit.
Competitive bids:
(1) Must be expresse<1 as a real. ~e.ld with three aec:imal.s, e .OJ., 3.1.23%.
( 2 ) Net long po~ i tion fer eaeh bidder tmlS t :be reported. when the sum of the total bid
~tr at all yields, and tbe ~et :long position i.s ,1 bUlj,cm or great..~.
(3) Net loug position must be dettl%m.ined &oS of one half-hour prior to the elesing t:1JBe to:
receipt; Qf competitive ~ml<1er8_
Hax~m'm

Recog:c.iaed ~id at a S~le Yield ••.•••••••••.•• 35% of ~ic offering
••••.•••••••••••••••..••••••.•••••••..•••• 35% of public cff~g

MBKdWllC ~d

~C8 iPt of Tenders:
Non.cOIIIPetitive tenders: Prior to 12 :00 nOO1l eastern daylight saving time em aucti= 4a)'.
Cc::m:!petieive tenders: Prior to 1: 00 }':I.m. eastern daylight saving t1lne em auct~~ 4ay.
P~ym.aIlt Terms: 'BY eh&rqe to a fwlds account at a Pede:ra.l Rese~ ~ on issue date, or
paymer.t of f'.1.l.l par ~t wi~ t.ender.
'!'reasuryDir&c:1; c:u..stamers can use the Pay Di~:

:sat~-a

which

instieution

auehor~zeB

a charg8 to

ehei~

aecOUDt e£ recerd at

the;r

issue daee.
~z

Base Ref8r8UCe Period .•.•• 1982-~984
••••••••.•• 174.04516
••••••••••• l77 .28710
Index Ratio 07/16/2001 ••••..•• l.01863

Ref OI 01/15/2001
Ref CPI 07 / 16/~OO!.

f;~ancial

OEPARTMEN"f

O.F

THE

TREASURY
.

TREASURY

NEWS

ornCE OF 'VILle AFFAIRS. 1500 PENNSYLVA.NIA AVENUE, N.W.' WASKINC'rON, D.C.' 20120. (202) 62.2.%960

BARGOED ~IL 2:30 P.M.
ly!i, 2001
~y

CO~AC~:

Office of FiAancing
202/691-3550

OFFERS 13-WEEK AND 26-WEEK SILLS

~e ~easury wi11 auction two aeries of ~reasury bills cota1ing
proximataly $2?,000 ~lli~ to refuDd $19,478 million of publicly held
lis matU%iDg ~ly 12, 2001, and to raise about $7,522 ~11ioD of new cash_
e amount of maturing publicly hald bills includes the 9-aay cash management
118 issued ~y 3, 2001, in ehe amount of $13,000 million.

In addition to the public hol~s, Federal ~eserve ~s for their own
counts hold. $10.,485 :au..l1i.0D. of ~e mat:uringo bills, which may be refundea at
a highest discount rate of accepted competitive eenders. ~ts awaraed
these accounts will ~ in addition to the offering amount.

op to $1,000 million iA noncompetitive bidS from Foreign

and

Xnter-

tiona! Honetary Authority (FIKA) accou:ts b~44ing througA the Federal
Ae.r'Ve Ba!lk of Naw York will be included. within the offering amount of each

ction. Thes. noaecmp.~itive bids will have a l~t of $200 million per
count aDd wi11 be accepted in the order of smallest to largest, up eo the
gregate award limit of $1,000 million.
~easuryDirect: customers bave nqu.est8Q that we reinvese their maturiug
ldings of appro~tely $1,015 million into the 13-week bi1~ and $862
llion ~to the 26~ek bill.

~e allocation percentage app1ied to bids awarded at the highest discount
te will be rounded up to the next hundredth of a whole pereencage point,
9.

17 .. 13%.

!'his offering of 'l'reas\Ui:Y securities is gO'J'erned by the te:ms and eontions set forth in the Unifor.m Offering Circular for the Sale and Issue of
rket.ble Bock-Entry Treasury Sil~s, Notes, ana Bouda (31 CPR part 356, as
ended) •
De~ai1s about each of
£aring highlights.

the new securities are given in the attached

000

-466
FO,. press releases, $peecnes, publU schedules and official biographies, calloW' 24-hou7 feu 1bu 41 (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED JULy 12, 2001
July 5, 2001
Offering Amount ••••••••••••••..•••••••• $15,000 million
$12,000 million
Public Offering •••••••••••••.•.••••.•.. Offering amount leas the l!Ul\ount awar.ded for FIMA
Description of Offering:
Term and type of security ••••.•••.•••.•
CUSIP number •••••••••••••••••..••••••.•
Auctian date ...•••.••••.••.•. , • • • • • • . ••
Issue date ••..••••.••..•••.••..•.••••••
Matur3ty date ••••••••••••••••••••••••••
Original issue dote ••••••••••••••••••••
Curremtly outstanding ••••••••••••••••••
Minimrum bid amount and multi~les ••.•.••
The

f~llowing

91-day bill
912'195 OS 4
July 9, 2001
3uly 12, 2001

October 11,2001
April 12, 2001
$12,314 million
$1,000

.ccount:~

l8a-day bill
912795 JB 8
July 9, 2001
July 12, 2001
January 10, 2002
July 12, lOOl
1'<
$1,000

rules apply to all securities mentioned above:

Bubmi.slon of Bidss
Noncompetitive hids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and Interna.tional Monetary Authority (FINA) bids: Nonc~etitive bids submitted-through the
Federal Reserve Banks as agenta for PIMA accounts. Accepted in ord~r of size from smallest to largest
with no ~ore than $200 million awarded per account. The total noncompetibive amount awarded to Federal
Reserve Banks as agents for FlMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount th~t brings the aggregate award
~o~al to the $1,000 million limit.
However, if there are two or more bids of equal amounts that would
cease the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) MUst be eKPressed as a discount rata with three decimals in incr«ments of .005%, e.g., 7.100%,
7.105%.
(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 $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing ttme for receipt of
~omp.eitive tenders.
Haximwm Recognized Bid a~ a Single Rate •.•. 3S% of publio offering
Maximwm Award •••••••••••••••••••••••••••••• 35% of public offering
Receipt of Tenders:
NQncompetitive tenders ••• Prior to 12:00 noon eastern daylight saving time on auction day
comp.~itive tenders .••••• Prior to 1:00 p.m. eastern daylight saving time on auction day
P&yme~t ~ermsl
By charge to a funds account at a Federal Reserve Bank on issue date, or p~ent of £u11
par ~ount wi~h t.nd.~.
Trea.ur,yDir.ct customers can use the p~ D~rect
to tha~~ acoount o~ r~cora a t th.~r e~nanoia1 ~n.~~tut~on o~ i •• ua date.

feature which

au~hor~zes

& charge

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt· Washington, DC 20239

Contact: Peter Hollenbach
(202) 691-3502

FOR RELEASE AT 3:00 PM
July 6, 2001

PUBLIC DEBT ANNOUNCES ACTIVITY FOR
SECURITIES IN THE STRIPS PROGRAM FOR JUNE 2001

The Bureau of the Public Debt announced activity for the month of June 2001, of securities within the Separate
Trading of Registered Interest and Principal of Securities program (STRIPS).
Dollar Amounts in Thousands
Principal Outstanding
(Eligible Securities)

$2,082,447,159

Held in Unstripped Form

$1,907,763,86 I

Held in Stripped Form

$174,683,298

Reconstituted in June

$19,154,356

The accompanying table gives a breakdown of STRIPS activity by individual loan description. The balances in
this table are subject to audit and subsequent revision. These monthly figures are included in Table V of the
Monthly Statement of The Public Debt, entitled "Holdings of Treasury Securities in Stripped Form."
The Strips Table along with the new Monthly Statement of The Public Debt is available on Public Debt's
Internet site at: www.publicdebt.treas.gov.Awide range of information about the public debt and Treasury
securities is also available at the site.
000

PO-467

www.publicdebt.treas.gov

TABLE V

- HOLDINGS OF TREASURY SECURITIES

.A.moun~ Outstanding

Corpus

Total
Outstandinq

CUSIP

Treasury Bonds
CUSIP
9123100M7
008
OR6
OU9
ON5
OPO
OS4
OT2
DV7
OW5
OX3
on

Interest Rate:
11-5/8
12
10-314

9-3/3
11-3/4
11-114

10-5/S
9-7/S
9-1/4
7-1/4
7-112

8-3/4
8-7/8
9-1/8

DZS
EA2

E80
EC8
E06
EE4
EFl
EG9
EH7
EJ3
EKO
EL8
EMS
EN4
EP9
EQ7
ES3
ETI
EV6
EW4

8-7/8
8-1/S
8-1/2
8-314
8-3/4

7-718
8-1/S
8-1/8

8
7-1/4

BAD
BSS

6-1/4

6G6

7-112
7-5/8

B04
6E2
BF9
BG7
6H5
6Jl
BKS
8L6
BM4
8P7
8V4
6W2
CG6
CH4
CK7

6-713
6
6-3/4
6-lr2
6-51S
6-318
6-1/8
5-112
5-114
5-114
6-1/S
6-1/4
5-3/3

8'2

EYO
EZ7
FAl
F89
FE3
FFO
FG8
FJ2
FM5
FPS

912803 A89
AD5
AGS
AJ2
912300 At..7
912S03 At.. 1,
AC7
A23
AFO
AH6
AK9
AL7
AM5
AN3
AP8
AQ6
AR4
AS2
ATO
AU7
AV5
AW3
AXl
AY9
AZ6

7-1/8

7-518

3-513

J
A
A
A
A
A

3-3/8
3-51B
3-7/8
4-1/4
3-112

Total Inflation-Indexed Notes -....

912820 BZ9
SVSI
CL9
oN4
EK9
GA9

512,039,530

368,049,282

144,040,248

1S, 167,668

10,573,256
17,592,199
18,405,957
17,151,053
11,901,728
6,098,733

18,573,256
17,592,199
18,296,473
17,151,053
11,901}28
6,098,733

0
0

0
0
0
0
0
0

89,722,927

89,613,443

109,484

9,269,713
4,755,916
6,005,584
11,085,799
4,390,916
5,666,859
5,811,754
18,823,551
18,824,448
16,241,669
12,031,358
7,072,439
7,614,470
15,084,798
19,280,932
9,888,268
8,197,183
18,166,306
10,247,573
10,473,788
10,173,482
31,177,194
10,237,790
7,933,626
16,899,061
22,659,044
9,704,162
10,634,170
11,695,207
12,837,915
10,018,418
11,168,177
10,210,971
10,015,756
22,046,339
11,776,201
10,947,052
11,350341
11,178,580
17,043,162
10,886,993

.........

4,579,406
1,892,608
5,851413
4651,468
2, t95, lS4
7,326,384
3,066,703
3,036,249
5,260,164
13,523,923
17,444,263
6,738284
9,318,577
2,926,039
3,720,270
9,510698
18,271,645
7,652,220
3,533,303
9,009,586
9,350,773
5,985,973
8,930,254
13,557,179
9,385,391
4,723,776
10,795,861
19,228,164
3,412,482
3,833,019
7,614,800
11,155,616
7,088,218
6,748,277
7,050,971
7,785,756
13,412,739
11,188,201
10,446,452
10,992,741
11,012,380
16,955,754

TotallnflatiDn-lndexed Bonds

3,622,400
2,368,150
3,418,300
104,448
3,810,400
3,758,915
1.324,213
2,630,610
551,590

0
109,484

,-,
0

Treasury Inflation-Indexed Bonds:
C USIP,
912810 F05
FH6

Reconstituted
This Month

PolllOn Held in
StriDDed Form

1O,78~,593

08/15/05
02/15/06
11115/14
02/15/15
08/15/15
11/15/15
02115/16
05115/16
11115/16
05115117
08115117
05115/18
11115118
02115/19
08115/19
02115/20
05115120
08115120
02115121
05115/21
08115/21
11/15/21
08115/22
11115/22
02115123
08/15/23
11115/24
02115/25
08115125
02/15/26
08115126
11/15/25
02115/27
08/15/27
11115127
08115/28
11115/28
02115/29
08115/29
05115/30
02115/31

07/15102
01115/07
01/15/08
01115/09
01115/10
01115/11

Portion Held !O
U"stnpoed Form

299,623
1,380,160
7,503,385
2,712,781
4,146400
3,894,200
5,574100
1,009,287
2,236,048
4663,880
9,156,720
896,800
4,487,815
1,243,228
17,620,015
852,399
3,209,850
6,103,200
3,430,880
6,291,680
6,B01,151
4,080,407
1,681,300
2,930,200
4,419,900
3,160,000
2,230,000
8,633,600
538,000
500.600
357,600
166,200
87,408
102,400

8,301,806
4,260,758

11115/04

Treasury Innation-Inde:.<"d Not"s
Interest Rate,
Series.
C USI?_
9128273AS
2M3
3T7
4Y5
5W8
6RS

Thousands

81,600
0
101,600
29,430
148,800
1,476080
716,240
235600
182,000
273,600
146,800
1,118,735
358,800
286,400
300,800
769,600
472,033
147,200
304,600
1,093,760
316,000
614,545
405,440
2,784,775
199,200
617,600
899,200
123,680
205,120
412,800
210,880
111,900
350,800
578,400
323,200
70,400
1,226,600
235,600
41,600
6,400
107,200
82,600
0

05/15/05

. .. - ...

Total Treasury Bonds, .....

1(1

Maturity Oat"

STRIP

Loan Descnption

IN STRIPPED FORM JUNE 30 200 1--,

Interest Rate:
3-5/8

3-7/8
.................

912803 BN2
CF8

04/15128
04115/29

....

18,381,583
21,219,801

13,331,533
21,085,308

0
134,493

0
0

39,601,384

39,465,392

134,493

TABLE V - HOLDINGS OF TREASURY SECURITIES IN STRIPPED FORM, JUNE 30, 2001 __ Continued

Amount Out.:.tandlng In Thousands

CoriJus,

Treasury Notes'
CUSIP
912327 Y71
5L2
692

Series:
L
AB

Interest Rate
0-5/S
5-1/2

7-7/8

Z39

6-1/2

5P3
Z54
501
Z8S
5R9
025
2C5
2El

5-1/2

2G6

5X6
2L5
6A5
2PG
6B3
2S0
6Cl
F49
2Wl
6E7

6-3/8
5-5/S
6-1/4
5-7/3
7·1/2
5-7/8
6·1/3
5-114
6-3/8
6-1/4
6-1/2
6-51B
6-1/2
6-5/S
6-3/8
7-1/2
6-112
6-5/8
5·1/4
6-3/8
6
6-1/4
6-3/3
0-1/4
6-1/8
5-7/8
6
5-3/4
5-3/4
5·5/8
5-5/3
5-113
5-112
4-3/4
6-1/4
5-112
4-518
5-1/2
4-1/4
5·3/4
4
5· <12
4-1/4
5-318
5-314
5-1/4
4-1/4
5-718
4-3/4
7-114
5-1/4
7-1/4

2Y7
6F4
3C4
6HO
G55
3G5
6K3

3J9
6L1
3L4
303
6P2
3S9
600
3V2
6S6
J78
3Z3
6Ul
485
6V9
4Dl
6W7
4H2
6Y3
4K5
L83
4N9
4U3
N81
SA6
PS9
5F5
083
SMO
R87
5S7
S86
T85
609
U83
V82
6N7
W81
X80
6X5
Y55
Z62

AD
P
AE
D
0

0
S
E
T

F
U
A
G

V
H
W

K
X
B
L

Y
M

Z
N
P

AC
Q

AD
C

l
A

0
M
E

N
F
P
G
0
H

B
J
K
A
E

B
F
C
G
D

H
A
B
E
C
D

F
A
6
E
C
D

2JO

2U5

3EO
3X8

0
B

,~F6

4V1

S(33

5NS

5Z1

B
C
6

6J6
6,4

Maturity Date

STRIP
CUSIP

Loan Description

Total
Outstandinq

912820 FF9

DYOI
882
FG7
EG9
FH5

Eel
F Jl
E05

fiCO
EGo

En
FK8
Ell

FL5
EN3
FM4
EPg

FN2
E06
BOS
FP7
ES2
FOS
ETO
FR3
EU7
BE6
FSI
FU6
CC9

FV4
CE5

CHS
FY8
CKl

FZ5
CN5
GB7
BF3
CS~

GO::;
CU9
GEl

CWS
GFS
0A2
GH4
OCS
8G1
OE4
0J3

BH9
DOl
BJ5
OU8
6K2

BLO

7-7/8
5-718
7-112

EE3
6M3
BNS
ER4
6Pl
609
FXO
6R7
8S5
GG6

6-1/2
6-3/4

6-112
5-7/8
5-314

5-5/8
6-7/8
4-5/8

6-1/2
6-1/4
888
6-1/B
5-112

BUO
6W6
6X4

5-5/8
4-3/4

C'(~

CA2
COS
DKO
CV5
E'li

5-1/2
6
6-1/2
5-3/4

E:,15
FT9
GC5

07131101
07/31/01
03115/01
03/31/01
08131/01
09130/01
09130/01
10/31/01
10131/01
11/15/01
11130/01
12131/01
01/31/02
01131102
02128/02
02128/02
03131/02
03131/02
04130102
04130/02
05115/02
05131/02
05131/02
06130102
06130102
07131/02
07131/02
08115/02
08/31102
08131102
09130102
09120102
1013"02
11/30102
11/30102
12131102
12131102
01131103
01131/03
02115/03
02128/03
02128103
03/31/03
03131103
04130/03
04130103
05131103
05131/03
06130/03
08115/03
03115/03
1 i/15/03
02115/04
02115/04
05115104
05115/04
08115/04
08/15/04
11115/04
1"15/04
02115/05
05/15/05
05115/05
08115/05
11/15/05
11115/05
02115/06
05/15/06
05115/06
071\5106
10115/06
02115/07
05/15/07
08/15107

14,136,833
20,541.318
12,339,185
14000,224
20,118,595
1'4,518,514
18,797,823
14,639,843
19,196,002
24,226,102
33,504,627
31,166,321
13,453,346
19,3S1,251
13,799,902
16,563,375
14,301,310
17,237,943
14,474,673
17,390,900
11,714,397
13,503,890
14,871,823
13,058,694
14,320,609
12,231,057
15,057,900
23,859,015
12,731,742
15,072,214
12,806,814
15,144,335
26,593,892
12,120,580
15,058,528
12,052,433
14,822,027
13,100,640
15,452,604
23,562,691
13,670,354
14,685,095
14,172.892
14,674,853
12,573,248
13,333,528
13,132,243
13,331,937
13,126,779
28,011,028
19,852,263
18,625,785
12955,077
17,823,223
14,440,372
18,925,383
13,346,467
18,089,806
14,373,760
32,658,145
13,834,754
14,739,504
28,562,370
15,002,580
15,209,920
28,062,797
15,513,587
16,015,475
16,180,509
22,740,446
22,459,675
13.103,673
13,958,186
25,636,803

...

R2constrture-d
This Month

Portion Held in
Stnooed Form

458,000
5,095,000
13,500

22,-137,594

(

23 436,329

14,136,833
20,083,318
7,244,185
13,986,624
20,113,595
14,480,114
10,297,023
14,639,843
19,194,402
19,006,602
33,499,827
31,031,521
13,398,338
19,381,251
13,799,902
16,529,875
14,278,910
17,234,743
14,474,673
17,390,900
7,718,237
13,503,890
14.849,423
13,058,694
14,318,609
12231,057
15,057,900
20,506,753
12,73 1,742
15,072,214
12,768,414
15,144,335
26,534692
11,826,980
14,990,688
11,667,793
14,822,027
13,100,640
15,452,604
22,350,667
13,626354
14,685095
14,172,092
14,674,853
12,573,248
13,338,528
13,103,843
13,331,937
13,125,059
25,834,828
19,680,263
17,604,085
12,442,077
17,799,228
13,779,572
18,925,383
11,643,267
18,089,806
14,36B,960
32,653,145
13,246,594
14,739.104
28,562,370
15,002580
14,836,680
28,025,997
15,492,107
15,729,S75
',6,130,509
22.740,446
22.450,675
12,965,874
13,690,711
25,210,603
1:::,563,912
27,031801
24,963,925
14,280,490
27227,094
23,343, ~ 09
22,436.994
23436,329

1.441033,313

1,410,634,245

30.299,073

936,683

2052447,159

19G7,763361

174683,29.3

19,154,356

02115/03

13.533412

05115/08
11/15/08
05115109
03/15109
02115/10
0811511 0
02115/11

27,190.961
25063,125
14,794,790
27,399,894
23,355,709

Total Treasury Notes" '
Grand Total..

Ponloo Held in
Unstnoped Form

38,400
500,800
0
1,600
5,219,500
4,800
8~,800

55,008
0
0
33,500
22,400
3,200
0
0
3,996,160
0
22,400
0
2,000
0
0
3,352,252
0
0
38,400
0,
59,200 ;
293,600
67.840
384,640
0
0
0
1,212,024
44,000
0
800

38,400
0
0
0
0
0
0
130,000
0
0
0
0
0
0

0
0
0
0,
33,520
0
0
0
0
0
0
500,800
0
0
0
0
0

500
0
0

0
0
0
7.488
0
0

0
0

0
28,400
0
1,720
2,176,200
172,000
1,021,700
513,000
24,000
660,800
0
1.703,200
0
4,800
0
588,160
'--400
0
0
~,

373,240
36,800
21,4S0
285,6CO
0
0
9.000
137,804
267,475
425,200
14,500
109,160
119,200
5'14,300
172,800
12,600
600
0

0
0
0
15,000
4,900
0
25,600
0
1,600
0
41,600
0
0

23,200
0
0
0
14,800
1,600
0
116,480
0
0
0
3,200
21,800
0
0
0
0
0

0
5,200
0
0

D£PARTMENT

THE

TREASt:RY

.
.. ,

TREASURY

NEWS

OFFICE OF 'PtJ:BLJC AnA IRS • UOO PENNSYLVANIA AY!.K~. N.W•• WASHINGTON. D.C •• 20%}0. (202) 612.:'60

CONTACT:

FOR :IMMEDIATE RELEASE

202/691-3550

3uly·S,2001

~'s

Office of FinanciDg

13-week and 26-week bill announcement iDcoxrect1y stated

the amount of publicly held bills maturing July 12, 2001.

The correct

&mauDt of maturing publicly held bills is $32,478 million.
The announoement also inoorreetly stated
cash in the amount of $7, 522 mi11ion.

need to raise new

Because of the adjustment to the

amount of maturing publicly held bills, the announcement should have
reflected a pay down of $5,478 mi1lion.
~l

other detai1s an tbe announeement are the

S~.

000

PO-468

~r press releases, s~eecbe~, public .ehedu~es &DC o££ieial biographies, call our
24-bour £az li~8 ae (202) 622-2040

D EPA R T lVl E N T

0 F

THE

T REA SUR Y

NEWS

lREASURY

OffiCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220" (202) 622-2960

Contact: Public Affairs
(202) 622-2960

FOR IMMEDIATE RELEASE
July 7,2001

Statement by Treasury Secretary Paul O'Neill following the G-7 Meeting in Rome

I enjoyed visiting with my G-7 colleagues here today. I find these gatherings
particularly useful when we can have intormal discussions among ourselves, together as a group
or one on one in bilateral meetings. These kinds of frank discussions allow all of us to reach a
deeper understanding of common ground and better prepare our principals for the Heads of State
meeting in Genoa later this month. Going fon.vard, we will work to strengthen the G-7 process
and its value for our Heads of State and Government by making our goals as clear and
measurable as possible and by taking a direct role in monitoring progress toward their
achievement.
We all agreed that growth in each of our economies is crucial to prosperity around the
world. I reiterated my belief that we in the United States have taken strong measures in both
fiscal and monetary policy to return our economy to a higher growth path. And I continue to
believe that the prospects for long-term global prosperity are better now than at any time in our
history.
We were joined today by the heads of the multilateral development banks for a thorough
and forthright exchange. We all agree that these institutions are crucial to world development
and that education projects should be a larger part ofMDB portfolios. I emphasized the
importance of using rigorous performance measures to assist the MDBs in focusing their
resources on projects that increase productivity and per capita income in developing nations.
I am very pleased that we have established a consensus on redirecting the OECD harmful
tax practices project to focus exclusively on infoffi1ation exchange and treat non-member
countries and member countries in the same time line.
-30PO-469

rOT press release~ !if1tJtlm~ public £ch£dules 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
July 9, 2001

Contact: Peter Hollenbach
(202)691-3502

PUBLIC DEBT ADDS MATURED NOTES AND BONDS TO TREASURY HUNT

The Bureau of the Public Debt expanded its popular Treasury Hunt Web site by adding
information on some 14,000 matured registered Treasury notes and bonds still held by investors.
The $54 million in matured Treasuries are held by about 10,000 investors. A registered Treasury
note or bond is a paper security inscribed with the owner's name witb records maintained by
Public Debt. Treasury stopped issuing registered paper securities in 1986 with tbe advent of
TreasuryDirect.
To check if you may have a matured registered note or bond, simply enter the Taxpayer
Identification Number of the owner, either a Social Security Number for individuals, or an'
Employer Identification Number for trusts and organizations. Some 93 percent of these matured
notes and bonds are registered in the names of individuals. The remainder are registered in the
names of organizations such as churches, service and fraternal organizations or businesses. If
there is a potential match, all the visitor to Treasury Hunt need do is provide some basic contact
information and Public Debt's staff will follow up.
Treasury Hunt, at www.savingsbonds.gov, also lets the public search for undeliverable savings
bonds and interest payments, along with matured Series E, H, and HH savings bonds. The public
conducted more than 350,000 searches on the site since it went live in February 2001.
Investors who still hold $450 million in registered, paper Treasury bonds that have not yet
reached maturity can make the SmartExhange and take advantage of the safety and convenience
of maintaining their holdings in TreasuryDirect. Once investors convert their holdings to
TreasuryDirect, they no longer have to be concerned about safekeeping paper se~urities.
TreasuryDirect also offers payment by Direct Deposit and reinvestment options.'

PD-470

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
rul y 09, 2 001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:

91-Day Bill
July 12, 2001
October 11, 2001
912795GS4

High Rate:

3.560%

Investment Rate 1/:

Price:

3.643%

99.100

All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate.
Tenders at the high discount rate were
llotted 45.93%.
All tenders at lower rates were accepted in full.
AMOUNTS TENDERED

~ND

ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

23,902,619
1,343,423
160,000

15,000,108 2/

25,406,042

SUBTOTAL

TOTAL

5,4l4,086

5,414,086

Federal Reserve
$

30,820,128

13,496,685
1,343,423
160,000

20,414,194

Median rate
3.530%: 50% of the amount of accepted competitive tenders
s tendered at or below that rate.
Low rate
3.495%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
d-to-Cover Ratio

25,406,042 / 15,000,108

1.69

Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $1,101,177,000

http://www.publicdebt.treas.gov

471

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
July 09, 2001

CONTACT:

Office of Financing
202 - 691- 3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182 -Day Bill
July 12, 2001
January 10, 2002
912795JB8

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.500%

High Rate:

Investment Rate 1/:

3.612%

Price:

98.231

All noncompetitive and successful competitive bidders were awarded
ecurities at the high rate.
Tenders at the high discount rate were
llotted 53.48%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive
FIMA (noncompetitive)

23,346,677
1,181,213
125,000

5,070,842

Federal Reserve
$

29,723,732

10,693,955
1,181,213
125,000
12,000,168 2/

24,652,890

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

17,071,010

Median rate
3.480%: 50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low rate
3.430%:
5% of the amount
E accepted competitive tenders was tendered at or below that rate.

Ld-to-Cover Ratio

= 24,652,890 / 12,000,168 = 2.05

Equivalent coupon-issue yield.
Awards to TREASURY DIRECT = $924,488,000

http://www.publicdebt.treas.gov

PO-472

D E P ,\ R T 1\1 E N T

() F

THE

T REA S V R Y

NEWS

IREASURY

omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASlllNGTON, D.C. - 20220. (202) 622·2960

U.S. International Reserve Position

07 J 10/01

The Tre:1Sury Department today released US. reserve assets data for the week ending July 6, 2001. As indicated in this
table, u.s. reserve assets totaled $64,636 million as of July 6, 2001, dovm from $64,907 million as of
June 29, 2001.

US millions)

Jfficial U.S. Reserve Assets

TOTAL
Foreign Currency Reserves

Euro

:1. Securities
'~f.vn;c!1.

,ssuer !:eao'auartered

III

tile US.

July 6. 2001
64,636

June 29. 2001
64,907
'( en

TOTAL

16 :01

15.::351
iJ

). Total deposits with:
.'
~ '--I J, lUI

b.i. Other central banks and HIS
b.ii. Banks headquartered in the U.S.
b Ii.

,)r.vnlc~.

janl\S Iccctec abroad

b.iii. Banks headquartered outside the U.S.

:C.lli.

[~A '.Vr;jc~

ballf"s :ocatec

III

the US

'/IF Reserve Position:

!.J3.131

pecial Drawing Rights (SDRs) 2

.. :re"l

old Stock

, " ']J.11

,I)

_'.'./

I
j

ther Reserve Assets
.~,C:uces ;lC!cr:'Js~f :r,2 Iredsc;~:'s :::<Gld,S;C :),:ctili'::3tlCfl .='jfllj 1,=Sr.'~~n(j tile' C:':'C:C:I~il C\CS2,'/f}~; :::':. '-;k'!ri ' ::cn ,\IZ:rhd "\'C:::,)UJl[
)MA), valued at current market exchange rates. Foreign currency holdings listed as securities refled marked-to-market values, and

osits reflect carrying values.
fhe items, "2. IMF Reserve Position" and "3. Special DraWing Rights (SDRs)," are based on data provided by the IMF and are valued in
3rterms at the official SDR/do/iar exchange rate for the reporting date. The IMF data for June :;9 are final. The entries in the table above
July 6 (shown in italics) refleo any necessary adjustments, including revaluation. by the U.S. Treasury to the prior week's IMF data.
;oid stock is '/alued monthly at $42.2222 per fine troy ounce. Values shown are as of May 31.2001. The Apnl 30,2001 value was
046 million.

u.s. International Reserve Position (cont'd)
I. Predetermined Short-Term Drains on Foreign Currency Assets
June 29, 2001
. Foreign currency loans and securities

July 6,2001

o
o
o

. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:

2.8. Short positions
2.b. Long positions
Other

I. Contingent Short-Term Net Drains on Foreign Currency Assets
June 29, 2001
Contingent liabilities in foreign currency
.a. Collateral guarantees on debt due within 1 year
.b. Other contingent liabilities
Foreign currency securities with embedded options
Undrawn, unconditional credit lines

3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
I.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

July 6,2001

o
o

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR IMMEDIATE RELEASE
July 11,2001

Contact: Peter Hollenbach
(202) 691-3502

BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS
AFFECTED BY FLOODING IN WEST VIRGINIA
The Bureau of Public Debt took action to assist victims of severe weather in 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 flooding. These procedures will remain in effect through August 31, 2001.
Public Debt's action waives the normal six-month minimum holding period for Series EE and Series I 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 West Virginia counties involved are Boone, Cabell, Calhoun, Clay, Doddridge, Fayette, Kanawha,
Lincoln, Logan, Mason, McDowell, Mercer, Mingo, Preston, Putnam, Raleigh, Roane, Summers, Wayne and
Wyoming. 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 by writing the Richmond Federal Reserve
Bank's Savings Bond Customer Service Department, 701 East Byrd Street, Richmond, Virginia 23219; phone
(804) 697-8370. This form can also be downloaded from Public Debt's website at: wvvw.publicdebt.treas.gov.
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 0'" J financial institution. Completed forms should be forwarded to Public Debt's Office of Investor
Services, 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the word
'DISASTER" on the front of their envelopes, to help expedite the processing of claims.
PO-474
000

www.publicdebt.treas.gov

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
)R IMMEDIATE RELEASE
lly 11, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 9-YR 6-MO INFLATION-INDEXED NOTES
This issue is a reopening of an inflation-indexed note originally issued
muary 16, 2001.
lterest Rate:
!ries:
~IP No:
'RIPS Minimum:

3 1/2%
A-20l1
9128276R8
$1,000

Issue Date:
July 16, 2001
Dated Date:
July 15, 2001
Maturity Date:
January 15, 2011
TIIN Conversion Factor per $1,000
10.054861623 1/

High Yield:

3.500%

Adjusted Price: 101.863

All noncompetitive and successful competitive bidders were awarded
curities at the high yield. Tenders at the high yield were
lotted 86.09%.
All tenders at lower yields were accepted in full.
Adjusted accrued interest of $ 0.09688 per $1,000 must be paid for
e period from July 15, 2001 to July 16, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive

9,394,230
111,268

4,888,736
111/268

TOTAL

9,505,498

5,000,004 2/

Both the unadjusted price of $100.000 and the unadjusted accrued interest
$ 0.09511 were adjusted by an index ratio of
1.01863, for the period
)m January 15, 2001, through July 16, 2001.
Median yield
3.468%:
50% of the amount of accepted competitive tenders
tendered at or below that rate.
Low yield
3.430%:
5% of the amount
accepted competitive tenders was tendered at or below that rate.
)-TO-COVER RATIO = 9,505,498 / 5,000,004 = 1.90
FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
This factor is used to calculate the Adjusted Values for any TIIN face
amount and will be maintained to 2-decimals on Book-entry systems.
Awards to TREASURY DIRECT = $43,224,000

http://www.publicdebt.treas.gov
-475

DEPARTlVlENT

THE

TREASURY

NEWS
omCE OF PUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C. - 20220 - (202) 622-2960

For Immediate Release
July 12,2001

Contact: Public Affairs
(202) 622-2960

STATEl\·'lENT OF SHEILA C. BAIR NOMINEE FOR ASSISTANT SECRETARY OF
THE TREASURY FOR FINANCIAL INSTITUTIONS BEFORE THE COlVIMITTEE ON
BANKING, HOUSING AND URBAN AFFAIRS UNITED STATES SENATE
Chairman Sarbanes, Ranking Member Gramm, and Members of the Committee, I am
pleased to appear before you today to discuss my nomination to become the Assistant Secretary
of the Treasury for Financial Institutions.
Before I begin my statement, it might be prudent to introduce my family, since I think it
unlikely our 17-month-old daughter, Colleen, is going to make it through the entire hearing.
With me today are my husband, Scott Cooper, our 8-year-old son, Preston, Colleen, and our au
pair, Urarat Sukahrom. I am very happy that they could all be with me this morning on this
special occasion.
I would like to begin my statement by expressing my deep appreciation to President Bush
for nominating me for this important position. I am honored by the confidence the White House
has shown in me by naming me to this post and I will work hard to justify that confidence. I
would also like to thank Secretary O'Neill, Deputy Secretary-Designate Ken Dam, and Under
Secretary-Designate Peter Fisher for the support they have provided for my nomination. I look
forward to having the privilege of working with them, the rest of the impressive team that the
President has assembled, and the well regarded career staff at the Treasury Department.
Next, I would like to thank Senator Dole for his support and help on this nomination, and
all the support, advice, and mentoring he has provided me over the past two decades. I know he
wanted to be here this morning and wish him a full and speedy recovery from his recent surgery.
Working for Senator Dole early in my career, I was able to learn all the best things about being
in public service. In the tradition of two other great Kansans, William Allen White and Dwight
D. Eisenhower, Senator Dole's leadership in the Senate reflected the common sense values and
pragmatic idealism so steeped in the politics of Middle America. From him, I learned that
government has a special obligation to use American taxpayers' dollars wisely and sparingly,
wisdom that will serve me well at the Treasury Department whose job I believe, first and
foremost, is to protect taxpayers' funds from imprudent risk and wasteful expenditure. Senator
Dole also taught me, however, that government has a special obligation to help society's less
fortunate and those programs to help the poor and disadvantaged, if carefully targeted and
efficiently managed, can constitute a wise and noble use of taxpayer's funds.

PO-476
For press release~ speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
~

I come to you today with over a decade of experience working in public service, ranging
from my first job as a civil rights attorney for the old Department of Health, Education and
Welfare, to my five years of service to this august body on the staff of Senator Dole, to over four
years as a Commissioner on the Commodity Futures Trading Commission, where I served as
Chairman of the CFTC's Financial Products Advisory Committee. I have nearly 12 years
experience working with the financial markets, combining my years at the CFTC, with over
seven with the New York Stock Exchange, and five as Senior Vice President for Govenunent
Relations. My blend of experiences with the NYSE and CFTC has given me valuable insights
into the financial regulatory/policy making process from the perspective of both the regulator
and the regulated. It has also given me a broad based understanding of the workings of financial
markets and the financial institutions, which participate in them.
My previous experience with financial derivatives and equities will be helpful in dealing
with the myriad public policy issues that are arising as traditional lines demarcating banking
products from other types of financial products are blurring, and in some cases, disappearing.
With financial institutions forging into new product lines and services in the wake ofthe
Gramm-Leach-Bliley Act, the ability of financial regulators and policy makers to coordinate and
work together cooperatively is being increasingly challenged, and I hope my background will
help me to contribute to the development of comity and consistency in the regulation and
oversight of our financial institutions. These are exciting times in the making of financial
regulatory policy and once again, let me say how deeply grateful I am to President Bush for
giving me this opportunity to return to public service. If confirmed by the Senate, I look forward
to working closely with members ofthis Committee, the House Financial Services Committee
and others as together we deal with the dynamic and momentous changes occurring in the
delivery of financial services.
Thank you very much. I would be happy to respond to any questions that you might
have.

-30-

DEPARTIVIENT

THE

TREASURY

NEWS
OFF1CE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C .• 20220 - (202) 622-2960

FOR IlVIMEDIATE RELEASE
July 12, 2001

Contact: Tasia Scolinos
(202) 622-2960

AMERICAN HOME PRODUCTS SETTLES TREASURY NARCOTICS TRAFFICKING
SANCTIONS MATTER FOR $2.5lVIILLION
American Home Products has paid the Treasury Department $2.5 million to settle
charges levied against two of its wholly-owned U.S. subsidiaries, Wyeth-Ayerst International,
Inc. and Whitehall International Inc. Acting through their Colombian branches and affiliates,
these subsidiaries engaged in prohibited transactions with entities designated by Treasury's
Office of Foreign Assets Control ("OF AC") as Specially Designated Narcotics Traffickers
("SDNTs").
The alleged transactions were with the SDNT front company, Drogas La Rebaja, and
other affiliated SDNT businesses. Drogas La Rebaja, now also known as Copservir, is a
Colombian drugstore chain named to OFAC's list ofSDNTs in October 1995. Drogas la Rebaja
and the other involved SDNT businesses are owned or controlled by Colombia's Cali drug cartel
leaders, Gilberto and Miguel Rodriguez Orejuela. This is the largest civil settlement ever
received by OF AC under the SDNT program.
OF AC enforces these narcotics trafficking sanctions under Executive Order 12978 and
31 CFR Part 536. The principal tool for implementing the sanctions is OF AC's list of SDNTs
which was developed by OFAC in close consultation with both the Justice Department and the
State Department. The objectives of the SDNT program are to identify, expose, isolate and
incapacitate the businesses and agents of the Colombian drug cartels by denying them access to
the U.S. financial system and to the benefits oftrade and transactions involving U.S. businesses
and individuals. Since the inception of the SDNT program in October 1995, OF AC has issued
12 lists and identified 578 businesses and individuals as SDNTs. This list consists of 10
Colombian drug cartel leaders, 231 businesses and 337 other individuals.
"Violations of our sanctions programs against foreign_narcotics traffickers and those who
provide them with material support are taken very seriously and violators must understand that
they will pay a penalty," said OFAC Director Richard Newcomb.

PO-477

For press releases, speeches, public schedules and official biographies, call QUr 24-hour fax line at (202) 622-2040

"Engaging in any unauthorized transaction with an SDNT is a violation of U.S. law and
all United States persons should be cautioned accordingly," added Director Newcomb.
In announcing the settlement, Director Newcomb recognized the U.S. Customs Service
for its efforts in investigating the alleged transactions that resulted in the precedent setting
settlement.

-30-

D EPA R T

E 1\ l'

0 If"

T II E

TREASURY

T REA SUR Y

NEWS

OFFICE Of' PtlBLIC AFFAIKS -liiOO PENNSVLVANIL AVENUJI. N.W•• WASHtNG1'ON .. D.C.- 2,0%1&- (101) 622.2960

DmARGOED tJ'NTIL 2: 30 P. K.
July 12, 2001

CONTACT:

Office of Pinancing

202/69l.-3550

'rREASllR'X' OFi'RRB l.3-WEU AND 26-WEEK BILLS

The Treasury will
app%QX~telY

auctio~

two series of

~reasury

bills totaling

$28,000 million to refund $19,629 million of publicly held

bills maturing July 19, 2001, and to raiae about $8,371 million of new cash.
In addi~~on to the public hol~gs, Pederal Reserve Banks for their own
acco~ts

hol.d $10,561 million o£ the maturing bills, which may be refucded at
the highest discount rate of accepted competitive tenders. Amounts awarded
to these accounts n i l be in addition to the offering amount..

up to $1,000 million in

noneo~etitive

bids from Foreign and Igternational HCnetary Authority (PIMA) accounts bidding through ehe Federal.
Reserve Bank of New York will be incluae4 within the offering amount of each
auction. These nom:ompeti eive bids will have a limi~ of $200 million per
account and will be accepted in the order of smallest to largest, up to the
a51gragate award limit of $1,000 mi1lion.

T.reaSU%YDirecc customers have requested that we reinvest their maturing
~olaiug8 of approx~tely $932
Dillion i.nte the 26-week 1)1.11.

~llion

into the l.3-week bill and

$~,110

The a11oeation percentage applied to bids awarded at the highest discount
:-ate will he rounded up to the next hundredth of a whole percentage point.
a.g., 1'.13%.
'l'his offering of Treasury securities is governed by the terms and con~he Unifor.m O%fer~g Circular for the Sale ana Xssue of

utions set forth in

larkatable Book-Entry Treasury Bills, Notes, and Bonds (31 CPR Part 356, as
~cled)

•

Details about each of the new securities are given in the attached

f£ering highlights.
000

ttachment

0-478

HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BB ISSUED JULY 19, 2001
July 12, 2001

Offering Amount •...•...••••••••••.••.•• • $15,000 million
$13,000 million
Publio Offering •........•.••......••••.. Offering amount less the amount awarded for FIMA accounts
De9cription of Offeringr
Term and type of s6curity ..••••••.••••.. 91-day bill

182·day bill

CU8IP number .••.•.•••.•••.•••••.•.•••••• 912795 HS 3
Auction date ..•.•..•.••••••••••.•...•.•• July 16,2001
Issue da to ....•.•.••..•.•.••.••....••... July 19, 2001
Maturity date ••.•..••••.••••..••..•••••. October 18, 2001
Original issue date •.••.•.•••••...••.••. April 19, 2001
Currently outstanding .•••••••.••••.••••• $12,174 million

July 16, 2001
July 19, 2001
January 17, 2002
July 19, 2001

Minimum bid amount and multiples ••••.••• $l,OOO

$1,000

912795 JC 6

The following rules apply to all securities mentioned above.
Submission of Bids:
'
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rat~ of accepted
competitive bids.
Foreign and International Monetary Authority (FlMA) bids2 Noncompetitive bids submitted througb the
Federal Reserve Banks as agents for PIMA accounts. Accepted in order of lize from smallest to largest
with no ~ore than $200 million awarded per acoount. The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FIMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially acoepted in the amount that brings the aggregate award
total to the $1 / 000 million limit. However, if there are two or "more bid. of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bidsl
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.1tO',
7.105~.

(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 $1 billion or greater.
(3) Net long position must be determined as of ODe half-hour prior to the closing time for reclipt of
competitive tenders.
Maximum Reoognized Bid at a Single Rate ...• 3S\ of public offering
Maximum Award ••••.••••••••••••••••.•••••••• 35% of public offering
Receipt of Tenders I
Noncomp~titiv8 tenders ••• Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders ••••• ,Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Te~SI By charge to a funds account at a Federal Reserve Bank on issue date, or pa~eDt of fall
par amount with tender. TreasuryDirect oustomers can use the Pay Direct feature which authorizes a charge
to the~r aooount o£ record at their finanaia1 ins~itut~on on issue da~e.

For Release at 10:00 a.m.
Julv 12, 2001

PO-479

STATEMENT OF
THE OFFICE OF TAX POLlCY
DEPARTMENT OF THE TREASURY
BEFORE THE COMMITTEE ON FINANCE

Mr Chainnan, Mr. Grassley, and Members of the Committee:
This statement is submitted for inclusion in the record of the hearings before the
Committee on July 10 and 11, 2001, and a third date to be scheduled. The subject of the hearings
and this statement is the role of tax incentives in energy policy.

It is the goal of this Administration to pursue an energy policy that protects America's
economic, security, and environmental interests. As you know, in May the President's National
Energy Policy Development (NEPD) Group released its report entitled "Reliable, Affordable, and
Environmentally Sound Energy for America's Future." The report sets forth three basic features
of a National Energy Policy:
The Policy is a long-term, comprehensive strategy. Our energy crisis has been years in the
making, and will take years to put fully behind us.
The Policy will advance new, environmentally friendly technologies to increase energy
supplies and encourage cleaner, more efficient energy use.
The Policy seeks to raise the living standards of the American people, recognizing that to
do so our country must fully integrate its energy, environmental, and economic policies.
In that context, the Office of Tax Policy appreciates the opportunity to present testimony
on tax incentives to promote energy conservation and increase domestic production of oil and
gas.

Energy Efficiency and Alternative Energy Sources
Incentives for energy efficiency and alternative energy sources are essential elements of
national energy policy. The continuing strength of our economy over the past two years, despite
oil price rises, underscores the dramatic improvements in energy efficiency we have achieved over
the past quarter century, as well as the changing economy. While past oil shortages have taken a
significant toll on the U.S. economy, the recent increases in oil prices have not affected the
economy much. Increased energy efficiency in cars, homes, and manufacturing has helped
insulate the economy from these short-term market fluctuations. In 1974, we consumed 15
barrels of oil for every $10,000 of gross domestic product. Today we consume only 8 barrels of
oil for the same amount (in constant dollars) of economic output.

-2-

Current law tax incentives for energy efficiency and alternative fuels
Tax incentives currently provide an important element of support for energy-efficiency
improvements and increased use of renewable and alternative fuels. Current incentives are
estimated to total $1.2 billion for fiscal years 2002 through 2006. They include a tax credit for
electric vehicles and expensing for clean-fuel vehicles ($20 million), a tax credit for the production
of electricity from wind or biomass and a tax credit for certain solar energy property ($590
million), and an exclusion from gross income for certain energy conservation subsidies provided
by public utilities to their customers ($580 million). I
Electric and clean-fuel vehicles and clean-fuel vehicle refueling propertv
A 10-percent tax credit is provided for the cost of a qualified electric vehicle, up to a
maximum credit of $4,000. A qualified electric vehicle is a motor vehicle that is powered
primarily by an electric motor drawing current from rechargeable batteries, fuel cells, or other
portable sources of electric current, the original use of which commences with the taxpayer, and
that is acquired for use by the taxpayer and not for resale. The full amount of the credit is
available for purchases prior to 2002. The credit begins to phase down in 2002 and does not
apply to vehicles placed in service after 2004.
Certain costs of qualified clean-fuel vehicles and clean-fuel vehicle refueling property may
be deducted when such property is placed in service. Qualified electric vehicles do not qualify for
the clean-fuel vehicle deduction. The deduction begins to phase down in 2002 and does not apply
to property placed in service after 2004.
Energy from wind or biomass
A 1.5-cent-per-kilowatt-hour tax credit is provided for electricity produced from wind,
"closed-loop" biomass (organic material from a plant that is planted exclusively for purposes of
being used at a qualified facility to produce electricity), and poultry waste. The electricity must be
sold to an unrelated person and the credit is limited to the first 10 years of production. The credit
applies only to facilities placed in service before January 1, 2002. The credit amount is indexed
for inflation after 1992.
Solar energy
A 10-percent investment tax credit is provided to businesses for qualifying eq~ipment that
uses solar energy to generate electricity, to heat or cool or provide hot water for use III a
structure, or to provide solar process heat.

\ Analytical Perspectives. Budget afthe United States Government. Fiscal Year 2002,
U.S. Government Printing Office, Washington, DC, 2001, p. 63.

-3Ethanol and renewable source methanol
An income tax credit and an excise tax exemption are provided for ethanol and renewable
source methanol used as a fuel. In general, the income tax credit is 53 cents per gallon for ethanol
and 60 cents per gallon for renewable source methanol. As an altemative to the income tax
credit, gasohol blenders may claim an equivalent gasoline tax exemption for each ethanol and
renewable source methanol that is blended into qualifying gasohol.

The income tax credit expires on December 31, 2007, and the excise tax exemption
expires on September 30, 2007. In addition, the ethanol credit and exemption are each reduced
by 1 cent per gallon in 2003 and by an additional 1 cent per gallon in 2005. Neither the credit nor
the exemption applies during any period in which motor fuel taxes dedicated to the Highway
Trust Fund are limited to 4.3 cents per gallon. Under current law, the motor fuel tax dedicated to
the Highway Trust Fund will be limited to 4.3 cents per gallon beginning on October 1,2005.
Enemy conservation subsidies
Subsidies provided by public utilities to their customers for the purchase or installation of
energy conservation measures are excluded from the customers' gross income. An energy
conservation measure is any installation or modification primarily designed to reduce consumption
of electricity or natural gas or to improve the management of energy demand with respect to a
dwelling unit.
Administration budget proposals

The Administration's budget proposals for fiscal year 2002 include tax incentives for
renewable energy resources. The budget also proposes to modify the tax treatment of nuclear
decommissioning funds. The Administration's budget proposals are described below."
Electricity from wind and biomass
The President's Budget proposes to extend the credit for electricity produced from wind
and biomass for three years to facilities placed in service before January 1, 2005. In addition,
eligible biomass sources would be expanded to include certain biomass from forest-related
resources, agricultural sources, and other specified sources. Special rules would apply to biomass
facilities placed in service before January I, 2002. Electricity produced at such facilities from
newly eligible sources would be eligible for the credit only from January 1, 2002, through
December 31, 2004. The credit for such electricity would be computed at a rate equal to 60
percent of the generally applicable rate. Electricity produced from newly eligible biomass co-fired
in coal plants would also be eligible for the credit only from January I, 2002, through December

For a more detailed description, see General Eyplanations of the Administration's
Fiscal Year 2002 Tax ReliefProposais, Department of the Treasury, April 2001.
2

-431, 2004. The credit for such electricity would be computed at a rate equal to 30 percent of the
generally applicable rate.
Residential solar energy systems
The President's Budget proposes a new tax credit for individuals that purchase solar
energy equipment used to generate electricity (photovoltaic equipment) or heat water (solar water
heating equipment) for use in a dwelling unit that the individual uses as a residence. The credit
would be available only for equipment used exclusively for purposes other than heating swimming
pools. The proposed credit would be equal to 15 percent of the cost of the equipment and its
installation. The credit would be nonrefundable and an individual would be allowed a lifetime
maximum credit of $2,000 per residence for photovoltaic equipment and $2,000 per residence for
solar water heating equipment. The credit would apply only to solar water heating equipment
placed in service after December 31, 2001, and before January 1, 2006, and to photovoItaic
systems placed in service after December 31, 200 I, and before January 1, 2008.
Nuclear decommissioning funds
The President's Budget proposes to repeal the current law provision that limits deductible
contributions to a nuclear decommissioning fund to the amount included in the taxpayer's cost of
service for ratemaking purposes. Thus, unregulated taxpayers would be allowed a deduction for
amounts contributed to a qualified nuclear decommissioning fund. The Administration also
proposes to permit funding of all decommissioning costs (including pre-1984 costs) through
qualified nuclear decommissioning funds. Contributions to fund pre-1984 costs would be
deductible except to the extent a deduction (other than under the qualified fund rules) or an
exclusion from income has been previously allowed with respect to those costs. The
Administration's proposal would clarify that any transfer of a qualified nuclear decommissioning
fund in connection with the transfer of the power plant with which it is associated would be
nontaxable and no gain or loss will be recognized by the transferor or transferee as a result of the
transfer. In addition, the proposal would permit taxpayers to make deductible contributions to a
qualified fund after the end of the nuclear power plant's estimated useful life and would provide
that nuclear decommissioning costs are deductible when paid.

NEPD Group proposals
The Report of the NEPD Group also included tax incentives for renewable energy
3
resources and for more efficient energy use. The NEPD Group proposals are described below.

For a more detailed description, see the attachments to this statement.

-5Fuel ii-om landfill methane
The NEPD Group report proposes to extend the section 29 credit for fuel produced from
landfill methane produced at a facility (or portion of a facility) that is placed in service after
December 31, 2001. Fuel produced at such facilities would be eligible for the credit through
December 31, 2010. The proposal would also expand the credit by permitting the credit for fuel
used by the taxpayer to produce electricity. The credit for fuel produced at landfills subject to
EPA's 1996 New Source Perfonnance Standards/Emissions Guidelines would be limited to twothirds of the otherwise applicable amount. In the case of landfills with facilities that currently
qualify for the section 29 credit, tlus limitation would not apply until after 2007.
Ethanol and renewable source methanol
The NEPD Group report proposes to extend the income tax credit and excise tax
exemption for ethanol and renewable source methanol through December 31,2010. The current
law rule providing that neither the credit nor the exemption applies during any period in which
motor fuel taxes dedicated to the Highway Trust Fund are limited to 4.3 cents per gallon would
be retained. As under current law, the credit and the exemption would each be reduced by 1 cent
per gallon in 2003 and by an additional I cent per gallon in 2005.
Hybrid and fuel cell vehicles
The NEPD Group report proposes to provide temporary tax credits for certain hybrid and
fuel cell vehicles.
A credit of $250 to $4,000 would be available for purchases of qualifying hybrid vehicles
after December 31,2001, and before January 1, 2008. A hybrid vehicle is a vehicle that draws
propulsion from both an on-board internal combustion or heat engine using combustible fuel and
an on-board rechargeable energy storage system. To qualify for the minimum credit, a hybrid
vehicle would be required to derive at least 5 percent of its maximum available power from the
rechargeable energy storage system. Larger credits would be available for vehicles that derive
larger percentages of power from the rechargeable energy storage system and for velucles that
meet specified fuel economy standards.
A credit of $1 ,000 to $8,000 would be available for the purchase of qualifying fuel cell
vehicles after December 31, 2001, and before January 1, 2008. A fuel cell vehicle is a motor
vehicle propelled by power derived from one or more cells that convert chemical energy directly
into electricity by combining oxygen with on-board hydrogen (including hydrogen produced from
on-board fuel that requires refonnation before use). To qualify for the minimum credit, a fuel cell
vehicle would be required to meet a minimum fuel economy standard for its weight class. Larger
credits would be available for vehicles that achieve higher fuel economy standards.
Combined heat and power systems

-6To encourage more efficient energy usage, the NEPD Group report proposes to provide a
10-percent investment credit for qualifying combined heat and power (CHP) systems. CHP
systems are used to produce electricity (andlor mechanical power) and usable heat from the same
primary energy source. To qualify for the credit, a system would be required to produce at least
20 percent of its total useful energy in the form of thermal energy and at least 20 percent in the
form of electrical andlor mechanical power and would also be required to satisfy an energy
efficiency standard. The credit would apply to CHP equipment placed in service after December
31,2001, and before January 1,2007.

Increasing Domestic Oil and Gas Production
Before turning to a discussion of the present tax treatment of oil and gas activities, we
would like to provide a brief overview of this sector.

Overview
Oil is an intemationally traded commodity with its domestic price set by world supply and
demand. Domestic exploration and production activity is affected by the world price of crude oil.
Historically, world oil prices have fluctuated substantially. From 1970 to the early 1980s, there
was a fivefold increase in real oil prices. World oil prices fell sharply in 1986 and were relatively
more stable from 1986 through 1997. During that period, average refiner acquisition costs ranged
from $16.24 to $25.63 per barrel in real 1996 dollars.'"' In 1998, however, oil costs to the refiner
declined to $12.52 per barrel in nominal dollars ($12.13 per banel in 1996 dollars), their lowest
level in 25 years in real terms. Since 1998, the decline has reversed with refiner acquisition costs
(in nominal dollars) rising to $17.51 per barrel in 1999 and $28.23 per barrel in 2000 (the price
has since dropped to $24.97 per banel in May 2001, the latest month for which composite figures
are available). The equivalent prices in 1996 dollars are $16.71 per banel in 1999, $26.40 per
barrel in 2000, and $23.01 per barrel in May 2001.
Domestic oil production has been on the decline since the mid-1980s. From 1978 to 1983
oil consumption in the United States also declined, but increasing consumption since 1983 has
more than offset this decline. In 2000, domestic oil consumption was 28 percent higher than in
1970. The decline in oil production and increase in consumption have led to an increase in oil
imports. Net petroleum (crude and product) imports have risen from approximately 38 percent of
consumption in 1988 to 52 percent in 2000.
A similar pattern of large recent price increases and increasing dependence on imports has
occurred in the natural gas market. During the second half of the 19905, spot prices for natural
gas exceeded $4.00 per million Btu (MMBtu) in only one month (February 1996). The spot price
again exceeded $4.00 per MMBtu in May 2000, rose above $5.00 per MMBtu in September

Nominal prices are converted to 1996 dollars using the Bureau of Economic Analysis
Implicit Price Deflator.
4

-72000, and exceeded $10.00 per MMBtu for several days last winter. Since last winter the price
has fallen sharply. The cunent spot price is approximately $3.00 per MMBtu. 5
The United States has large natural gas reserves and was essentially self-sufficient in
natural gas until the late 1980s. Since 1986, natural gas consumption has increased by more than
30 percent but natural gas production has increased by only 17 percent. Net imports as a share of
consumption nearly quadrupled from 1986 to 2000, rising from 4.2 percent to 15.6 percent.
Natural gas from Canada makes up nearly all of the imports into the United States.

Current law tax incentives for oil and gas production
Although the Administration's energy plan contains no new tax incentives for oil and gas
production, the Internal Revenue Code includes a variety of measures to stimulate domestic
exploration and production. They are generally justified on the ground that they reduce
vulnerability to an oil supply disruption through increases in domestic production, reserves,
exploration activity, and production capacity. The tax incentives contained in present law address
the drop in domestic exploratory drilling that has occurred since the mid-1950s and the continuing
loss of production from mature fields and marginal properties.
Incentives for oil and gas production are estimated to total $9.8 billion for fiscal years
2002 through 2006. 6 They include the nonconventiona1 fuels (i.e., oil produced from shale and tar
sands, gas produced from geopressured brine, Devonian shale, coal seams, tight formations, or
biomass, and synthetic fuel produced from coal) production credit ($2.4 billion), the enhanced oil
recovery credit ($4.4 billion), the allowance of percentage depletion for independent producers
and royalty owners, including increased percentage depletion for stripper wells ($2.3 billion), the
exception from the passive loss limitation for working interests in oil and gas properties ($100
million), and the expensing of intangible drilling and development costs ($640 million). In
addition to those tax expenditures, oil and gas activities have largely been eliminated from the
alternative minimum tax. These provisions are described in detail below.
Percentage depletion
Certain costs incurred prior to drilling an oil- or gas-producing property are recovered
through the depletion deduction. These include costs of acquiring the lease or other interest in
the property, and geological and geophysical costs (in advance of actual drilling). Any taxpayer
having an economic interest in a producing property may use the cost depletion method. Under
this method, the basis recovery for a taxable year is proportional to the exhaustion of the property
during the year. The cost depletion method does not permit cost recovery deductions that exceed

All price references are to the spot price at the Henry Hub and are in nominal dollars.

Analytical Perspectives, Budget of the United States Government, Fiscal Year 2002,
U.S. Government Printing Office, Washington, DC, 2001, p. 63.
6

-8the taxpayer's basis in the property or that are allowable on an accelerated basis. Thus, the
deduction for cost depletion is not generally viewed as a tax incentive.
Independent producers and royalty owners (as contrasted to integrated oil companies) 7
may qualify for percentage depletion. A qualifying taxpayer detennines the depletion deduction
for each oil or gas property under both the percentage depletion method and the cost depletion
method and deducts the larger of the two amounts. Under the percentage depletion method,
generally 15 percent of the taxpayer's gross income from an oil- or gas-producing property is
allowed as a deduction in each taxable year. The amount deducted may not exceed 100 percent
of the net income from that property in any year (the "net-income limitation,,).8 Additionally, the
percentage depletion deduction for all oil and gas properties may not exceed 65 percent of the
taxpayer's overall taxable income (determined before such deduction and adjusted for certain loss
carrybacks and trust distributions).9
A taxpayer may claim percentage depletion with respect to up to 1,000 barrels of average
daily production of domestic cmde oil or an equivalent amount of domestic natural gas. For
producers of both oil and natural gas, this limitation applies on a combined basis. All production
owned by businesses under common control and members of the same family must be aggregated;
each group is then treated as one producer for application of the 1,000-barrellimitation.
Special percentage depletion provisions apply to oil and gas production from marginal
properties. The statutory percentage depletion rate is increased (from the general rate of 15

7 l<\n independent producer is any producer who is not a "retailer" or "refiner." A retailer
is any person who directly, or through a related person, sells oil or natural gas or any product
derived therefrom (I) through any retail outlet operated by the taxpayer or related person, or (2)
to any person that is obligated to market or distribute such oil or natural gas (or product derived
therefrom) under the name of the taxpayer or the related person, or that has the authority to
occupy any retail outlet owned by the taxpayer or a related person. Bulk sales of crude oil and
natural gas to commercial or industrial users, and bulk sales of aviation fuel to the Department of
Defense, are not treated as retail sales for this purpose. Further, a person is not a retailer within
the meaning of this provision if the combined gross receipts of that person and all related persons
from the retail sale of oil, natural gas, or any product derived therefrom do not exceed $5 million
for the taxable year. A refiner is any person who directly or through a related person engages in
the refining of crude oil, but only if such person or related person has a refinery run in excess of
50,000 barrels per day on any day during the taxable year.

By contrast, for any other mineral qualifying for the percentage depletion deduction, the
deduction may not exceed 50 percent of the taxpayer's taxable income from the depletable
property.
8

Amounts disallowed as a result of this rule may be carried forward and deducted in
subsequent taxable years, subject to the 65-percent-of-taxable-income limitation for those years.
9

-9percent) by one percentage point for each whole dollar that the average price of crude oil (as
detennined under the provisions of the nonconventional fuels production credit of section 29) for
the immediately preceding calendar year is less than $20 per barrel. In no event may the rate of
percentage depletion under this provision exceed 25 percent for any taxable year. The increased
rate applies for the taxpayer's taxable year which immediately follows a calendar year for which
the average crude oil price falls below the $20 floor. To illustrate the application of this
provision, the average price of a barrel of crude oil for calendar year 1999 was $15.56; thus, the
percentage depletion rate for production from marginal wells was increased by four percent (to 19
percent) for taxable years beginning in 2000. The 100-percent-of-net-income limitation has been
suspended for marginal wells for taxable years beginning after December 31, 1997, and before
January 1,2002. The Administration's budget for fiscal year 2002 proposes a one-year extension
of this provision. Under the Administration proposal, marginal wells would continue to be
exempt from the limitation during taxable years beginning in 2002.
Marginal production is defined for this purpose as domestic crude oil or domestic natural
gas which is produced during any taxable year from a property which (I) is a stripper well
property for the calendar year in which the taxable year begins, or (2) is a property substantially
all of the production from which during such calendar year is heavy oil (i.e., oil that has a
weighted average gravity of 20 degrees API or less corrected to 60 degrees Fahrenheit). A
stripper well property is any oil or gas property for which daily average production per producing
oil or gas well is not more than 15 barrel equivalents in the calendar year during which the
taxpayer's taxable year begins. 10 A property qualifies as a stripper well property for a calendar
year only if the wells on such property were producing during that period at their maximum
efficient rate of flow.

If a taxpayer's property consists of a partial interest in one or more oil- or gas-producing
wells, the detennination of whether the property is a stripper well property or a heavy oil property
is made with respect to total production from such wells, including the portion of total production
attributable to ownership interests other than the taxpayer's. If the property satisfies the
requirements of a stripper well property, then each owner receives the benefits of this provision
with respect to its allocable share of the production from the property for its taxable year that
begins during the calendar year in which the property so qualifies.
The allowance for percentage depletion on production from marginal oil and gas
properties is subject to the I,OOO-barrel-per-day limitation discussed above. Unless a taxpayer
elects otherwise, marginal production is given priority over other production for purposes of
utilization of that limitation.

Equivalent barrels is computed as the sum of (1) the number of barrels of crude oil
produced, and (2) the number of cubic feet of natural gas produced divided by 6,000. If a well
produced 10 barrels of crude oil and 12,000 cubic feet of natural gas, its equivalent barrels
produced would equal 12 (i.e., 10 + (12,000 /6,000)).
10

-10Because percentage depletion, unlike cost depletion, is computed without regard to the
taxpayer's basis in the depletable property, cumulative depletion deductions may be far greater
than the amount expended by the taxpayer to acquire or develop the property.
Intangible drilling and development costs
In general, costs that benefit future periods must be capitalized and recovered over such
periods for income tax purposes, rather than being expensed in the period the costs are incurred.
In addition, the uniform capitalization rules require certain direct and indirect costs allocable to
property to be included in inventory or capitalized as part of the basis of such property. In
general, the uniform capitalization rules apply to real and tangible personal property produced by
the taxpayer or acquired for resale.
Special rules apply to intangible drilling and development costs ("IDes"). I I Under these
special rules, an operator (i.e., a person who holds a working or operating interest in any tract or
parcel of land either as a fee owner or under a lease or any other form of contract granting
working or operating rights) who pays or incurs IDes in the development of an oil or gas
property located in the United States may elect either to expense or capitalize those costs. The
uniform capitalization rules do not apply to otherwise deductible IDes.
If a taxpayer elects to expense IDes, the amount of the IDes is deductible as an expense
in the taxable year the cost is paid or incurred. Generally, IDes that a taxpayer elects to capitalize
may be recovered through depletion or depreciation, as appropriate; or in the case of a
nonproductive well ("dry hole"), the operator may elect to deduct the costs. In the case of an
integrated oil company (i.e., a company that engages, either directly or through a related
enterprise, in substantial retailing or refining activities) that has elected to expense IDes, 30

IDes include all expenditures made by an operator for wages, fuel, repairs, hauling,
supplies, etc., incident to and necessary for the drilling of wells and the preparation of wells for
the production of oil and gas. In addition, IDes include the cost to operators of any drilling or
development work (excluding amounts payable only out of production or gross or net proceeds
from production, if the amounts are depletable income to the recipient, and amounts properly
allocable to the cost of depreciable property) done by contractors under any fonn of contract
(including a turnkey contract). Such work includes labor, fuel, repairs, hauling, and supplies
which are used in the drilling, shooting, and cleaning of wells; in such clearing of ground,
draining, road making, surveying, and geological works as are necessary in preparation for the
drilling of wells; and in the construction of such derricks, tanks, pipelines, and other physical
Structures as are necessary for the drilling of wells and the preparation of wells for the production
of oil and gas. Generally, IDes do not include expenses for items which have a salvage value
(such as pipes and casings) or items which are part of the acquisition price of an interest in the
property.
11

-11-

percent of the IDes on productive wells must be capitalized and amortized over a 60-month
period. Ie
A taxpayer that has elected to deduct IDes may, nevertheless, elect to capitalize and
amortize certain IDes over a 60-month period beginning with the month the expenditure was paid
or incurred. This rule applies on an expenditure-by-expenditure basis; that is, for any particular
taxable year, a taxpayer may deduct some portion of its IDes and capitalize the rest under this
provision. This allows the taxpayer to reduce or eliminate IDe adjustments or preferences under
the alternative minimum tax.
The election to deduct IDes applies only to those IDes associated with domestic
properties. 13 For this purpose, the United States includes certain wells drilled offshore. 14
Intangible drilling costs are a major portion of the costs necessary to locate and develop
oil and gas reserves. Because the benefits obtained from these expenditures are of value
throughout the life of the project, these costs would be capitalized and recovered over the period
of production under generally applicable accounting principles.
Nonconventional fuels production credit
Taxpayers that produce certain qualifying fuels from nonconventional sources are eligible
for a tax credit ("the section 29 credit") equal to $3 per barrel or barrel-of-oil equivalent. ls Fuels
qualifying for the credit must be produced domestically from a well drilled, or a facility treated as

12 The IRS has ruled that if an integrated oil company ceases to be an integrated oil
company, it may not immediately write off the unamortized portion of the IDes capitalized under
this rule, but instead must continue to amortize those IDes over the 60-month amortization
period.

In the case of IDes paid or incurred with respect to an oil or gas well located outside of
the United States, the costs, at the election of the taxpayer, are either (l) included in adjusted
basis for purposes of computing the amount of any deduction allowable for cost depletion or (2)
capitalized and amortized ratably over a lO-year period beginning with the taxable year such costs
were paid or incurred.
13

A barrel-of-oil equivalent generally means that amount of the qualifying fuel which has a
Btu (British thermal unit) content of 5.8 million.
15

-12placed in service before January 1, 1993. 16 The section 29 credit generally is available for
qualified fuels sold to unrelated persons before January 1, 2003.17
For purposes of the credit, qualified fuels include: (1) 011 produced from shale and tar
sands; (2) gas produced from geopressured brine, Devonian shale, coal seams, a tight formation,
or biomass (i.e., any organic material other than oil, natural gas, or coal (or any product thereof);
and (3) liquid, gaseous, or solid synthetic fuels produced from coal (including lignite), including
such fuels when used as feedstocks. The amount of the credit is detemlined without regard to any
production attributable to a property from which gas from Devonian shale, coal seams,
geopressured brine, or a tight formation was produced in marketable quantities before 1980.
The amount of the section 29 credit generally is adjusted by an inflation adjustment factor
for the calendar year in which the sale occurS. 18 There is no adjustment for inflation in the case of
the credit for sales of natural gas produced from a tight formation. The credit begins to phase out
if the annual average unregulated wellhead price per barrel of domestic crude oil exceeds $23.50
multiplied by the inflation adjustment factor. 19
The amount of the section 29 credit allowable with respect to a project is reduced by any
unrecaptured business energy tax credit or enhanced oil recovery credit claimed with respect to
such project.
As with most other credits, the section 29 credit may not be used to offset alternative
minimum tax liability. Any unused section 29 credit generally may not be carried back or forward
to another taxable year; however, a taxpayer receives a credit for prior year minimum tax liability

A facility that produces gas from biomass or produces liquid, gaseous, or solid synthetic
fuels from coal (including lignite) generally will be treated as being placed in service before
January I, 1993, if it is placed in service by the taxpayer before July 1, 1998, pursuant to a written
binding contract in effect before January 1, 1997. In the case of a facility that produces coke or
coke gas, however, this provision applies only if the 011ginal use of the facility commences with
the taxpayer. Also, the IRS has ruled that production from certain post-1992 "recompletions" of
wells that were originally drilled prior to the expiration date of the credit would qualify for the
section 29 credit.
16

The inflation adjustment factor for the 2000 taxable year was 2.0454. Therefore, the
inflation-adjusted amount of the credit for that year was $6.14 per barrel or barrel equivalent.
18

For 2000, the inflation adjusted threshold for onset of the phaseout was $48.07 ($23.50
x 2.0454) and the average wellhead price for that year was $26.73.
19

-13to the extent that a section 29 credit is disallowed as a result of the operation of the alternative
minimum ta.x. The credit is limited to what would have been the regular tax liability but for the
alternative minimum tax.
The provision provides a significant tax incentive (cUlTentiy about $6 per barrel of oil
equivalent or $1 per thousand cubic feet of natural gas). Coal bed methane and gas from tight
formations currently account for most of the credit.
Enhanced oil recovery credit
Taxpayers are permitted to claim a general business credit, which consists of several
different components. One component of the general business credit is the enhanced oil recovery
credit. The general business credit for a taxable year may not exceed the excess (if any) of the
taxpayer's net income tax over the greater of (1) the tentative minimum tax, or (2) 25 percent of
so much of the taxpayer's net regular tax liability as exceeds $25,000. Any unused general
business credit generally may be carried back one taxable year and carried forward 20 taxable
years.
The enhanced oil recovery credit for a taxable year is equal to 15 percent of certain costs
attributable to qualified enhanced oil recovery ("EOR") projects undertaken by the taxpayer in the
United States during the taxable year. To the extent that a credit is allowed for such costs, the
taxpayer must reduce the amount otherwise deductible or required to be capitalized and recovered
through depreciation, depletion, or amortization, as appropriate, with respect to the costs. A
taxpayer may elect not to have the enhanced oil recovery credit apply for a taxable year.
The amount of the enhanced oil recovery credit is reduced in a taxable year following a
calendar year during which the annual average unregulated wellhead price per barrel of domestic
crude oil exceeds $28 (adjusted for inflation since 1990).:0 In such a case, the credit would be
reduced ratably over a $6 phaseout range.
F or purposes of the credit, qualified enhanced oil recovery costs include the following
costs which are paid or incurred with respect to a qualified EOR project: (1) the cost of tangible
property which is an integral part of the project and with respect to which depreciation or
l
amortization is allowable; (2) IDes that the taxpayer may elect to deduce and (3 ) the cost of
tertiary injectants with respect to which a deduction is allowable, whether or not chargeable to
capital account.

The average per-barrel price of crude oil for this purpose is determined in the same
manner as for purposes of the section 29 credit.
20

In the case of an integrated oil company, the credit base includes those IDCs which the
taxpayer is required to capitalize.
2l

-14-

A qualified EOR project means any project that is located within the United States and
involves the application (in accordance with sound engineering principles) of one or more
qualifying tertiary recovery methods which can reasonably be expected to result in more than an
insignificant increase in the amount of crude oil which ultimately wIll be recovered. The
qualifying tertiary recovery methods generally include the following nine methods: miscible fluid
displacement, steam-drive injection, microemulsion flooding, in situ combustion, polymeraugmented water flooding, cyclic-steam injection, alkaline flooding, carbonated water flooding,
and immiscible non-hydrocarbon gas displacement, or any other method approved by the IRS. In
addition, for purposes of the enhanced oil recovery credit, immiscible non-hydrocarbon gas
displacement generally is considered a qualifying tertiary recovery method, even if the gas injected
is not carbon dioxide.
A project is not considered a qualified EOR project unless the project's operator submits
to the IRS a certification from a petroleum engineer that the project meets the requirements set
forth in the preceding paragraph.
The enhanced oil recovery credit is effective for taxable years beginning after December
31, 1990, with respect to costs paid or incurred in EOR projects begun or significantly expanded
after that date.
Conventional oil recovery methods do not recover all of a well's oil. Some of the
remaining oil can be extracted by unconventional methods, but these methods are generally more
costly. At current world oil prices, a large part of the remaining oil in place is uneconomic to
recover by unconventional methods. In this environment, the EOR credit can increase
recoverable reserves. Although recovering oil using EOR methods is more expensive than
recovering it using conventional methods, it may be less expensive than producing oil from new
reservoirs. Although the credit could phase out at higher oil prices, it is fully effective at present
world oil prices.
Alternative minimum tax
A taxpayer is subject to an altemative minimum tax ("AMT") to the extent that its
tentative minimum tax exceeds its regular income tax liability. A corporate taxpayer's tentatlve
minimum tax generally equals 20 percent of its altemative minimum taxable income in excess of
an exemption amount. (The marginal AMT rate for a noncorporate taxpayer is 26 or 28 percent,
depending on the amount of its altemative minimum taxable income above an exemption amount.)
Altemative minimum taxable income ("AMTI") is the taxpayer's taxable income increased by
certain tax preferences and adjusted by determining the tax treatment of certain items in a manner
which negates the deferral of income resulting from the regular tax treatment of those items.
As a general rule, percentage depletion deductions claimed in excess of the basis of the
depletable property constitute an item of tax preference in determining the AMT. In addition, the
AMTI of a corporation is increased by an amount equal to 75 percent of the amount by which

-15adjusted current earnings ("ACE") of the corporation exceed AMTI (as detennined before this
adjustment). In general, ACE means AMTI with additional adjustments that generally follow the
rules presently applicable to corporations in computing their earnings and profits. As a general
rule a corporation must use the cost depletion method in computing its ACE adjustment. Thus,
the difference between a corporation's percentage depletion deduction (if any) claimed for regular
tax purposes and its allowable deduction detennined under the cost depletion method is factored
into its overall ACE adjustment.
Excess percentage depletion deductions related to crude oil and natural gas production are
not items of tax preference for AMT purposes. In addition, corporations that are independent oil
and gas producers and royalty owners may detennine depletion deductions using the percentage
depletion method in computing their ACE adjustments.
The difference between the amount of a taxpayer's IDC deductions and the amount which
would have been currently deductible had IDC's been capitalized and recovered over a 10-year
period may constitute an item of tax preference for the AMT to the extent that this amount
exceeds 65 percent of the taxpayer's net income from oil and gas properties for the taxable year
(the "excess IDC preference"). In addition, for purposes of computing a corporation's ACE
adjustment to the AMI, IDCs are capitalized and amortized over the 60-month period beginning
with the month in which they are paid or incurred. The preference does not apply if the taxpayer
elects to capitalize and amortize IDCs over a 60-month period for regular tax purposes.
IDe's related to oil and gas wells are generally not taken into account in computing the
excess IDe preference of taxpayers that are not integrated oil companies. This treatment does
not apply, however, to the extent it would reduce the amount of the taxpayer's AMTI by more
than 40 percent of the amount that the taxpayer's AMTI would have been if those IDCs had been
taken into account.
In addition, for corporations other than integrated oil companies, there is no ACE
adjustment for IDCs with respect to oil and gas wells. That is, such a taxpayer is permitted to use
its regular tax method of writing off those IDes for purposes of computing its adjusted current
earrungs.
Absent these rules, the incentive effect of the special provisions for oil and gas would be
reduced for finns subject to the AMT. These rules, however, effectively eliminate AMT concerns
for independent producers.
Passive activity loss and credit rules
A taxpayer's deductions from passive trade or business activities, to the extent they
exceed income from all such passive activities of the taxpayer (exclusive of portfolio income),

-16generally may not be deducted against other income. 2" Thus, for example, an individual taxpayer
may not deduct losses from a passive activity against income from wages. Losses suspended
under this "passive activity loss" limitation are carried forward and treated as deductions from
passive activities in the following year, and thus may offset any income from passive activities
generated in that later year. Losses from a passive activity may be deducted in full when the
taxpayer disposes of its entire interest in that activity to an unrelated party in a transaction in
which all realized gain or loss is recognized.
An activity generally is treated as passive if the taxpayer does not materially participate in
it. A taxpayer is treated as materially participating in an activity only if the taxpayer is involved in
the operations of the activity on a basis which is regular, continuous, and substantial.

A working interest in an oil or gas property generally is not treated as a passive activity,
whether or not the taxpayer materially participates in the activities related to that property. This
exception from the passive activity rules does not apply if the taxpayer holds the working interest
through an entity which limits the Jiability ofthe taxpayer with respect to the interest. In addition,
if a taxpayer has any loss for any taxable year from a working interest in an oil or gas property
which is treated pursuant to this working interest exception as a loss which is not from a passive
activity, then any net income from such property (or any property the basis of which is determined
in whole or in part by rei'erence to the basis of such property) for any succeeding taxable year is
treated as income of the taxpayer which is not from a passive activity.
Similar limitations apply to the utilization of tax credits attributable to passive activities.
Thus, for example, the passive activity rules (and, consequently, the oil and gas working interest
exception to those rules) apply to the nonconventional fuels production credit and the enhanced
oil recovery credit. However, if a taxpayer has net income from a working interest in an oil and
gas property which is treated as not arising from a passive activity, then any tax credits
attributable to the interest in that property would be treated as credits not from a passive activity
(and, thus, not subject to the passive activity credit limitation) to the extent that the amount of the
credits does not exceed the regular tax liability which is allocable to such net income.
As a result of this exception from the passive loss limitations, owners of working interests
in oil and gas properties may use losses from such interests to offset income from other sources.
Tertiary injectants
Taxpayers are allowed to deduct the cost of qualified tertiary injectant expenses for the
taxable year. Qualified tertiary injectant expenses are amounts paid or incurred for any tertiary
injectant (other than recoverable hydrocarbon injectants) which is used as a part of a tertiary
recovery method.

This provision applies to individuals, estates, trusts, personal service corporations, and
closely held C corporations.
22

-17 The provision allowing the deduction for qualified tertiary injectant expenses resolves a
disagreement between taxpayers (who considered such costs to be IDes or operating expenses)
and the IRS (which considered such costs to be subject to capitalization).

ATTACHMENTS: NEPD GROUP REPORT PROPOSALS

Extend and Modify Credit for Fuel Produced from Landfill Methane
Current Law
Taxpayers that produce gas from biomass (including landfill methane) are eligible for a tax
credit ("the section 29 credit") equal to $3 per barrel-of-oil equivalent. For this purpose, a barrclof-oil equivalent is the amount of gas that has a Btu (British thermal unit) content of 5.8 million.
To qualify for the credit, the gas must be produced domestically from a facility placed in service
by the taxpayer before July I, 1998, pursuant to a written binding contract in effect before
January 1, 1997. In addition, the gas must be sold to an unrelated person before January I, 2008
The amount of the section 29 credit generally is adjusted by an inflation adjustment factor
for the calendar year in which the sale occurs. The inflation adjustment factor for the 2000
taxable year was 2.0454, and the inflation-adjusted amount of the credit for that year was $6.14
per barrel or barrel equivalent. The credit begins to phase out if the annual average unregulated
wellhead price per barrel of domestic crude oil exceeds $23.50 mUltiplied by the inflation
adjustment factor. For 2000, the inflation adjusted threshold for onset of the phaseout was
$48.07 ($23.50 x 2.0454) and the average wellhead price for that year was $26.73.
The amount of the section 29 credit allowable with respect to a project is reduced by any
unrecaptured business energy tax credit or enhanced oil recovery credit claimed with respect to
such project.
The section 29 credit may not be used to offset alternative minimum tax liability. Any
unused section 29 credit generally may not be camed back or forward to another taxable year;
however, a taxpayer receives a credit for prior year minimum tax liability to the extent that a
section 29 credit is disallowed as a result of the operation of the alternative minimum tax. The
credit is limited to what would have been the regular tax liabllity but for the alternative minimum
tax.

Proposal
The credit would be allowed for fuel produced from landfill methane if the fuel is
produced from a facility (or portion of a facility) placed in servIce after December 3 L 200 I, and
before January 1, 2011, and is sold (or used to produce eIectlicity that is sold) before January 1,
2011. The credit for fuel produced at landfills subject to EPA's 1996 New Source Performance
Standards/Emissions Guidelines would be limited to two-thirds of the otherwise applicable
amount beginning on January 1,2008, if any portion ofthe facility for producing fuel at the
landfill was placed in service before July I, 1998, and begilUling on January 1, 2002, in alI other

cases. The proposal would clarify, for purposes of detennining the extent to which a facility is
placed in service after December 31, 200 I, that the facility includes the wells, pipes, and related
components used to collect landtill methane and that only production attributable to wells, pipes,
and related components placed in service after December 31, 200 1, is treated as produced from
the portion of the facility placed in service after that date.

Extension of Tax Incentives for Ethanol
Current Law
Current law provides an income tax credit and an excise tax exemption for ethanol and
renewable source methanol used as a fuel. In general, the income tax credit for ethanol is 53
cents per gallon, but small ethanol producers (i.e., those producing less than 30 million gallons of
ethanol per year) qualify for a credit of 63 cents per gallon on the first 15 million gallons of
ethanol produced in a year. A credit of 60 cents per gallon is allowed for renewable source
methanol.
As an alternative to the income tax credit, gasohol blenders may claim a gasoline tax
exemption of 53 cents for each gallon of ethanol and 60 cents for each gallon of renewable source
methanol that is blended into qualifying gasohol.
The income tax credit expires on December 31, 2007, and the excise tax exemption
expires on September 30, 2007. In addition, the ethanol credit and exemption are each reduced
by 1 cent per gallon in 2003 and by an additional I cent per gallon in 2005. Neither the credit nor
the exemption applies during any period in which motor fuel taxes dedicated to the Highway
Trust Fund are limited to 4.3 cents per gallon. Under current law, the motor fuel tax dedicated to
the Highway Trust Fund will be limited to 4.3 cents per galion beginning on October 1,2005.

Reasons for Change
The tax credit and excise tax exemption help make ethanol and renewable source methanol
competitive with other fuels. Extending the credit and exemption would continue the imp0l1ant
contribution of these renewable energy sources to the Nation's long-term energy supply.

Proposal
The income tax credit and the excise tax exemption would be extended through December
31, 20 I O. The current law rule providing that neither the credit nor the exemption applies during
any period in which motor fuel taxes dedicated to the Highway Trust Fund are limited to 4.3 cents
per gallon would be retained. As under current law, the credit and the exemption would each be
reduced by I cent per gallon in 2003 and by an additional 1 cent per gallon in 2005.

Provide Tax Credit for Certain Hybrid and Fuel Cell Vehicles
Current Law
No generally available income tax credit for purchases of hybrid vehicles is available
cUlTently. A 10-percent tax credit is provided for the cost of a qualified electric vehicle, up to a
maximum credit of $4,000. A qualified electric vehicle is a motor vehicle that is powered
primarily by an electric motor drawing CUlTent from rechargeable batteries, fuel cells, or other
portable sources of electric current, the original use of which commences with the taxpayer, and
that is acquired for use by the taxpayer and not for resale. The full amount of the credit is
available for purchases prior to 2002. The credit begins to phase down in 2002 and does not
apply to vehicles placed in service after 2004.
Celtain costs of qualified clean-fuel property, including clean-fuel vehicles, may be
deducted when such property is placed in service. Qualified electric vehicles do not qualify for
the clean-fuel vehicle deduction. The deduction begins to phase down in 2002 and does not apply
to property placed in service after 2004.

Reasons for Change
The transportation sector now accounts tor 67 percent of u.s. oil consumption. Cars,
sport utility vehicles, light trucks, and minivans alone account for 40 percent of U.S. oil
consumption, about 20 to 40 percent of all urban smog-folTlling emissions and 20 percent of
greenhoLlse gas emissions. Almost all of these vehicles use a single gasoline-fueled engine.
Hybrid vehicles, which have more than one source of power on board the vehicle, and
electric vehicles have the potential to reduce petroleum consumption, air pollution, and
greenhouse gas emissions. The proposed credits will encourage the purchase of highly fuel
efficient vehicles that incorporate advanced automotive technologies and will help to move hybrid
and fuel cell vehicles from the laboratory to the highway. These vehicles can significantly reduce
oil consumption, emissions of air polIutants, and emissions of carbon dioxide, the most prevalent
greenhouse gas.

Proposal
The proposal would provide temporary tax credits for certain hybrid and fuel cell vehicles:
(I) Credit for qualified hybrid vehicles. A credit, of up to $4,000, would be available for
purchases of qualified hybrid vehicles after December 3 I, 2001, and before January I,
2008. The credit would be:
(a)
{b)

If the vehicle's fuel economy exceeds the 2000 model year city fuel economy, the amount
of credit shown in (a) through (d) above would be increased by the fol1owing amounts:
(i)
(ii)
(iii)
(iv)
(v)
(vi)

(ii)
(iii)

(iv)
(v)
(vi)
(vii)

$1,000 if the vehicle achieves at least 150 percent but less than 175 percent of the
2000 model year city fuel economy;
$1,500 if the vehicle achieves at least 175 percent but less than 200 percent of the
2000 model year city fuel economy;
$2,000 jfthe vehicle achieves at least 200 percent but less than 225 percent of the
2000 model year eity fuel economy;
$2,500 if the vehicle achieves at least 225 percent but less than 250 percent of the
2000 model year city fuel economy;
$3,000 if the vehicle achieves at least 250 percent but less than 275 percent of the
2000 model year city fuel economy;
$3,500 if the vehicle achieves at least 275 percent but less than 300 percent of the
2000 model year city fuel economy; and
$4,000 if the vehicle achieves at least 300 percent of the 2000 model year city fuel
economy.

The 2000 model year city fuel economy would be the following:
If the vehicle inertia
weight class is:
1,500 or 1,750 Ibs
2,000 lbs
2,2501bs
2,5001bs
2,7501bs
3,000 lbs
3,5001bs
4,0001bs
4,5001bs
5,0001bs
5,5001bs
6,0001bs
6,5001bs
7,000 or 8,500 Ibs

37.6 mpg
33.7 mpg
30.6 mpg
28.0 mpg
25.9 mpg
24.1 mpg
21.3 mpg
19.0 mpg
17.3 mpg
15.8 mpg
14.6 mpg
13.6 mpg
12.8 mpg
12.0 mpg

The "vehicle inertia weight class" is defined in regulations prescribed by the Enviromnental
Protection Agency for purposes of title II of the Clean Air Act.
A qualifying hybrid vehicle is a motor vehicle that draws propulsion energy from on-board
sources of stored energy which are both: (1) an internal combustion engine or heat engine using
combustible fuel, and (2) a rechargeable energy storage system. A qualifying fuel cell vehicle is a
motor vehicle that is propelled by power derived from one or more cells which convert chemical
energy directly into electricity by combining oxygen with hydrogen fuel which is stored on board
the vehicle and mayor may not require reformation prior to use. A qualifying vehicle must meet
all applicable regulatory requirements.
Maximum available power means the maximum value available from the battery or other
energy storage device, during a standard power test, divided by the sum of the battery or other
energy storage device and the SAE net power of the heat engine.
These credits would be available for all qualifying light vehicles including cars, minivans,
sport utility vehicles, and light trucks. Taxpayers would be able to claim only one of the credits
per vehicle and taxpayers who claim either credit would not be able to claim the qualified electric
vehicle credit or the deduction for clean-fuel vehicle property for the same vehicle. Business
taxpayers claiming either credit would be subject to the limitations on the general business credit
and would be required to reduce the basis of the velticle by the amount of the credit.

Investment Credit for Combined Heat and Power (CHP) Systems
Current law
Combined heat and power (CHP) systems arc used to produce electricity (and/or
mechanical power) and usable thennal energy from a single primary energy source. Depreciation
allowances for CHP property vary by asset use and capacity. Assets employed in the production
of electricity used by the taxpayer in an industrial manufacturing process or plant activity (and not
ordinarily available for sale to others) have a general cost recovery period of 15 years if rated with
total capacity in excess of 500 kilowatts. Electricity production assets of lesser-rated capacity
generally are classified with other manufacturing assets and have cost recovery periods of five to
ten years. Assets used in the production of electricity for sale have either a IS-year or 20-year
recovery period. For assets that are structural components of buildings, however, the recovery
period is either 39 years (if nonresidential) or 27.5 years (ifresidential), and the straight-line
method for computing depreciation allowances must be used. For assets with recovery periods of
10 years or less, the 200 percent declining balance method may be used to compute depreciation
allowances. The 150 percent declining balance method may be used for assets with recovery
periods of 15 or 20 years. No income tax credit is provided currently for investment in combined
heat and power property.

Reasons for change
Combined heat and power systems utilize thennal energy that is otherwise wasted in
producing electricity by more conventional methods. CHP systems achieve a greater level of
overall energy efficiency, and thereby lessen the consumption of primary fossil fuels, lower total
energy costs, and reduce carbon emissions. An investment tax credit for CHP assets is expected
to encourage increased energy efficiency by accelerating planned investments and inducing
additional investments in such systems. The increased demand for CHP equipment should, in
tum, reduce CHP production costs and spur additional technological innovation in improved CHP
systems.

Proposal
The proposal would establish a 10-percent investment credit for qualified CHP systems
with an electrical capacity in excess of 50 kilowatts or with a capacity to produce mechanical
power in excess of 67 horsepower (or an equivalent combination of electrical and mechanical
energy capacities). CHP property would be defined as property comprising a system that uses the
same energy source for the simultaneous or sequential generation of (1) electricity or mechanical
shaft power (or both) and (2) steam or other fonns of useful thennal energy (including heating
and cooling applications). A qualified CHP system would be required to produce at least 20
percent of its total useful energy in the fonn of thennal energy and at least 20 percent of its total
useful energy in the fDIm of electrical or mechanical power (or a combination thereof) and would
also be required to satisfy an energy-efficiency standard. For CHP systems with an electrical
capacity in excess of 50 megawatts (or a mechanical energy capacity in excess of 67,000
horsepower), the total energy efficiency of the system would have to exceed 70 percent. For

smaller systems, the total energy efficiency would have to exceed 60 percent. For this purpose,
total energy efficiency would be calculated as the sum of the useful electrical, thermal, and
mechanical power produced by the system at normal operating rates, measured on a Btu basis,
divided by the lower heating value of the primary fuel source for the system supplied. The credit
would be allowed with respect to qualified CHP property only if its eligibility is verified under
regulations prescribed by the Secretary of the Treasury.
Investments in qualified CHP assets that are otherwise assigned cost recovery periods of
less than 15 years would be eligible for the credit, provided that the taxpayer elected to treat such
property as having a 22-year class life. Thus, regular tax depreciation allowances would be
calculated using a IS-year recovery period and the 150 percent declining balance method.
The credit would be treated as an energy credit under the investment credit component of
the section 38 general business credit, and would be subject to the rules and limitations governing
that credit. Taxpayers using the credit for CHP equipment would not be entitled to any other tax
credit for the same equipment.
The credit would apply to investments in CHP equipment placed in service after December
31,2001, but before January 1,2007.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

Contact: Office of Financing
202-691-3550

FOR IMMEDIATE RELEASE
July 18,2001

TREASURY'S INFLATION-INDEXED SECURITIES
AUGUST REFERENCE CPI NUMBERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and daily
index ratios for the month of August for the following Treasury inflation-indexed securities:
3-3/8% 10-year notes due January 15, 2007
3-5/8% 5-year notes due July 15,2002
3-5/8% 10-year notes due January 15,2008
3-5/8% 30-year bonds due April 15, 2028
3-7/8% 10-year notes due January 15,2009
3-7/8% 30-year bonds due April 15, 2029
(7) 4-114% 10-year notes due January 15,2010
(8) 3-112% 10-year notes due January 15, 2011

(1)
(2)
(3)
(4)
(5)
(6)

This information is based on the non-seasonally adjusted U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
In addition to the publication of the reference CPI's (Ref CPI) and index ratios, this release
provides the non-seasonally adjusted CPI-U for the prior three-month period.
This infonnation is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 and requesting document number 480. The infonnation is also available
on the Internet at Public Debt's website (http://www.publicdebttreas.gov).
The infonnation for September is expected to be released on August 16,2001.
000

Attachment

http://www.publicdebt.treas.gov

PO-480

TREASURY INFLATION-INDEXED SECURITIES
Ref CPI and Index Ratios for
August 2001

Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):

3-7/8% 10-Year Notes
Series A-2009
9128274Y5
January 15. 1999
January 15. 1999
July 15. 1999

Maturity Date:
Ref CPI on Dated Date:

January 15. 2009
164.00000

Date
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31

2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001

CPI-U (NSA) for:

3-7/8% 30-Year Bonds

Bonds of April 2029
912810FH6
April 15. 1999
April 15. 1999
October 15. 1999
October 15. 2000
April 15. 2029
164.39333

4-1/4% 10-Year Notes
Series A-2010
9128275W8
January 15. 2000
January 18. 2000
July 15. 2000

3-1/2% 10-Year Notes
Series A-2011
9128276R8
January 15. 2001
January 16. 2001
July 16. 2001

January 15. 2010
168.24516

January 15. 2011
174.04516

RefCPI

Index Ratio

177.70000
177.70968
177.71935
177.72903
177.73871
177.74839
177.75806
177.76774
177.77742
177.78710
177.79677
177.80645
177.81613
177.82581
177.83548
177.84516
177.85484
177.86452
177.87419
177.88387
177.89355
177.90323
177.91290
177.92258
177.93226
177.94194
177.95161
177.96129
177.97097
177.98065
177.99032

1.08354
1.08360
1.08365
1.08371
1.08377
1.08383
1.08389
1.08395
1.08401
1.08407
1.08413
1.08419
1.08424
1.08430
1.08436
1.08442
1.08448
1.08454
1.08460
1.08466
1.08472
1.08478
1.08483
1.08489
1.08495
1.08501
1.08507
1.08513
1.08519
1.08525
1.08531

1.08094
1.08100
1.08106
1.08112
1.08118
1.08124
1.08130
1.08136
1.08142
1.08147
1.08153
1.08159
1.08165
1.08171
1.08177
1.08183
1.08189
1.08194
1.08200
1.08206
1.08212
1.08218
1.08224
1.08230
1.08236
1.08242
1.08247
1.08253
1.08259
1.08265
1.08271

1.05620
1.05625
1.05631
1.05637
1.05643
1.05648
1.05654
1.05660
1.05666
1.05671
1.05677
1.05683
1.05689
1.05694
1.05700
1.05706
1.05712
1.05717
1.05723
1.05729
1.05735
1.05740
1.05746
1.05752
1.05758
1.05763
1.05769
1.05775
1.05781
1.05786
1.05792

1.02100
1.02105
1.02111
1.02117
1.02122
1.02128
1.02133
1.02139
1.02144
1.02150
1.02156
1.02161
1.02167
1.02172
1.02178
1.02183
1.02189
1.02194
1.02200
1.02206
1.02211
1.02217
1.02222
1.02228
1.02233
1.02239
1.02245
1.02250
1.02256
1.02261
1.02267

April 2001

176.9

May 2001

177.7

June 2001

178.0

TREASURY INFLATION·INDEXED SECURITIES
Ref CPI and Index Ratios for
August 2001

Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):

3·3/8% 10·Year Notes
Series A·2007
9128272M3
January 15, 1997
February 6, 1997
April 15, 1997

3·5/8% 5·Year Notes
Series J·2002
9128273A8
July 15, 1997
July 15, 1997
October 15,1997

3·5/8% 10·Year Notes
Series A·2008
9128273T7
January 15, 1998
January 15, 1998
October 15,1998

3·5/8% 30·Year Bonds
Bonds of April 2028
912810FD5
April 15, 1998
April 15, 1998
July 15, 1998

Maturity Date:
Ref CPI on Dated Date:

January 15, 2007
158.43548

July 15, 2002
160.15484

January 15, 2008
161.55484

April 15, 2028
161.74000

Date
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31

2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001

CPI-U (NSA) for:

RefCPI

Index Ratio

117.70000
117.70968
117.71935
117.72903
117.73871
117.74839
117.75806
117.76714
117.17742
117.78710
117.79617
117.80645
177.81613
117.82581
177.83548
117.84516
177.85484
177.86452
117.87419
177.88387
177.89355
177.90323
117.91290
117.92258
177.93226
177.94194
117.95161
177.96129
171.97097
117.98065
177.99032

1.12159
1.12165
1.12171
1.12178
1.12184
1.12190
1.12196
1.12202
1.12208
1.12214
1.12220
1.12226
1.12233
1.12239
1.12245
1.12251
1.12257
1.12263
1.12269
1.12275
1.12281
1.12287
1.12294
1.12300
1.12306
1.12312
1.12318
1.12324
1.12330
1.12336
1.12342

1.10955
1.10961
1.10967
1.10973
1.10979
1.10985
1.10991
1.10997
1.11003
1.11010
1.11016
1.11022
1.11028
1.11034
1.11040
1.11046
1.11052
1.11058
1.11064
1.11070
1.11076
1.11082
1.11088
1.11094
1.11100
1.11106
1.11112
1.11118
1.11124
1.11130
1.11136

1.09994
1.10000
1.10006
1.10012
1.10018
1.10024
1.10030
1.10036
1.10042
1.10048
1.10054
1.10060
1.10065
1.10071
1.10017
1.10083
1.10089
1.10095
1.10101
1.10107
1.10113
1.10119
1.10125
1.10131
1.10137
1.10143
1.10149
1.10155
1.10161
1.10167
1.10173

1.09868
1.09874
1.09880
1.09886
1.09892
1.09898
1.09904
1.09910
1.09916
1.09922
1.09928
1.09934
1.09939
1.09945
1.09951
1.09957
1.09963
1.09969
1.09975
1.09981
1.09987
1.09993
1.09999
1.10005
1.10011
1.10017
1.10023
1.10029
1.10035
1.10041
1.10047

April 2001

176.9

May 2001

177.7

June 2001

I
,

178.0

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lRFASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

F or Immediate Release
July 16, 2001

Contact: Tara Bradshaw
(202) 622-2960

WILLIAM F. SWEETNAM, JR NAMED BENEFITS TAX COUNSEL

William F. Sweetnam, Jr. was named Benefits Tax Counsel on July 2,2001,
replacing J. Mark Iwry, who had been Benefits Tax Counsel since 1995. He joined the
Office of Tax Policy as an Associate Benefits Tax Counsel in April. As part of the Office
of the Benefits Tax Counsel, Sweetnam is responsible for providing Assistant Secretary
(Tax Policy) Mark Weinberger with policy analysis and advice on all aspects of
employee benefits taxation and related matters including qualified retirement plans,
Employee Stock Ownership Plans, employee welfare plans, health and long term care
benefits, social security taxes, and executive compensation. Sweetnam was the Treasury's
primary contact with Congress with regard to the IRA and pension provisions in the
Economic Growth and Tax Relief Reconciliation Act of2001.
Prior to his appointment, Sweetnam was Tax Counsel with the Majority Staff of
the U.S. Senate Committee on Finance, responsible for issues dealing with retirement
plans and other retirement savings vehicles (such as IRAs), medical and other employee
benefits, compensation matters, insurance, and tax-exempt organizations. Prior to his
service with the Committee, Sweetnam was a technical consultant in the Vahalla, New
York, office of Towers Perin, an internationally-based benefit and compensation
consulting firm. He previously was Chief Counsel, Tax and ERISA at Sunoco, Inc., an
energy company headquartered in Philadelphia.
Sweetnam is a graduate of Rutgers University and holds a J.D. degree from
Fordham University School of Law. He is a member of the New York and Pennsylvania
Bar. As author of a several articles, including Statutory Stock Options, BNA Tax
Portfolio No. 381 (1991), Sweetnam is a frequent speaker and lecturer on employee
benefits issues. Sweetnam resides in the District of Columbia.
-30-

PO-481

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
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

FOR IMMEDIATE RELEASE
July 16, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
July 19, 2001
October 18, 2001
912795HS3

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.550%

Investment Rate 1/:

Price:

3.630%

99.103

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 75.70%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

34,048,696
1,321,256
215,000

15,000,022 2/

35,584,952

SUBTOTAL

TOTAL

5,196,769

Federal Reserve
$

40,781,721

13,463,766
1,321,256
215,000

20,196,791

Median rate
3.530%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.510%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

35,584,952 / 15,000,022

2.37

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,027,885,000

http://www.publicdebt.treas.gov

PO-482

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

182-Day Bill
July 19, 2001
January 17, 2002
912795JC6
3.490%

Investment Rate 1/:

3.601%

Price:

98.236

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 99.91%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive

27,746,417
1,476,078

5,364,246

Federal Reserve
$

34,586,741

11,523,987
1,476,078
13,000,065 2/

29,222,495

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

18,364,311

Median rate
3.470%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.450%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 29,222,495 / 13,000,065 = 2.25
NO FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,176,861,000

http://www.publicdebt.treas.gov

PO-483

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lREASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIflNGTON, D.C .• 20220. (202) 622-2960

u.s. International Reserve Position

07/17/01

The Tr~asury Depanment today released US. reserve assets data forthe week ending July 13,2001. As indicated in this
table, u.s. reserve assets totaled $65,002 million as of July 13, 2001, up from $64,693 million as of
July 6,2001.
(in US millions)

I. Official U.S. Reserve Assets

TOTAL
1. Foreign Currency Reserves

a. Securities
Of which, issuer headquartered in the U. S.
b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.il. Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.

b.iii. Of which, banks located in the U.S.
2. IMF ReservE: Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

5. Other Reserve Assets

July 13. 2001
65,002

July 61 2001
64,693
Euro

Yen

Euro

TOTAL

5,085

11,219

16,304
0

5,128

8,607

3,787

12,394
0
0

8,677

Yen

TOTAL

10,565

15,692
0

4,574

13,251
0
0

0
0

14,545

14,581

10,407

10,433

11,044

11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for July 6 are final. The entries in the table above for
July 13 (shown in Italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.

31 Gold stock is valued monthly at 542.2222 per fine troy ounce. Values shown are as of May 31, 2001. The April 30, 2001 valu-e was
$11,046 million.

PO-484

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
July 6,2001

1. Foreign currency loans and securities

July 13, 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
July 13, 2001

July 6,2001

1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

o
o

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR IMMEDIATE RELEASE
July 17,2001

Contact: Peter Hollenbach
(202) 691-3502

BUREAU OF THE PUBLIC DEBT AIDS SAVINGS BONDS OWNERS
AFFECTED BY FLOODING IN TAZEWELL COUNTY, VIRGINIA
The Bureau of Public Debt took action to assist victims of severe weather in Tazewell County,
Virginia by expediting the replacement or payment of United States Savings Bonds for owners in
the area. The emergency procedures are effective immediately for paying agents and owners in
Tazewell County, Virginia affected by the flooding. These procedures will remain in effect through
August 31, 2001.
Public Debt's action waives the normal six-month minimum holding period for Series EE and
Series I savings bonds presented to authorized paying agents for redemption by residents of the
affected area. Most fmancial institutions serve as paying agents for savings bonds. 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 by writing the Richmond
Federal Reserve Bank's Savings Bond Customer Service Department, 701 East Byrd Street,
Richmond, Virginia 23219; phone (804) 697-8370. This form can also be downloaded from
Public Debt's website at: www.publicdebt.treas.gov. 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 Office of Investor
Services, 200 Third St., Parkersburg, West Virginia 26106-1328. Bond owners should write the
word "DISASTER" on the front of their envelopes, to help expedite the processing of claims.

000

PO-485

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C. • 20220 • (202) 622-2960

EMBARGOED UNTIL 2:00 p.M.
Wednesday, July 18, 2001

Contact: Tara Bradshaw
(202) 622-2960

STATEMENT OF PAUL H. O'NEILL BEFORE THE SENATE COMMITTEE ON
GOVERNMENTAL AFFAIRS PERMANENT SUBCOMMITTEE ON
INVESTIGATIONS
OEeD HARMFUL TAX PRACTICES INITIATIVE

Mr. Chairman, Senator Collins, and members of the Subcommittee, I appreciate this
opportunity to discuss the position of the United States with respect to the OECD harmful tax
practices initiative. This detailed statement will cover all the specific issues regarding the OECD
initiative that Chairman Levin asked me to address in his June 29th letter.
As I have stated previously, when I took my oath of office as Secretary in January, I
pledged faithfully to execute the laws of the United States. We have an obligation to enforce our
tax laws because failing to do so undermines the confidence of honest taxpaying Americans in
the fairness of our tax system. At the same time, we should not presume to interfere with the
internal tax policy decisions of sovereign nations. Based on these two fundamental principles, I
have concluded that the United States should attempt to refocus the OECD project on its core
element: the need for countries to be able to obtain specific information from other countries
upon request in order to prevent noncompliance with their tax laws.
Extent of tax evasion through use of offshore accounts or entities
It is impossible to quantify precisely the extent to which U.S. taxpayers are using
offshore entities or secret bank accoUnts - the facilities of tax haven jurisdictions - to evade their
U.S. tax obligations. Such taxpayers obviously do not report the extent of their noncompliance
with U.S. tax laws, and it is difficult to obtain anything other than anecdotal information with
respect to such activity.

However, based on this anecdotal information, I believe that the potential for such
evasion is significant. For example, the cases involving a bank in the Cayman Islands run by
John Mathewson highlight the opportunities available to U.S. taxpayers to evade their U.S. tax
obligations through the use of offshore bank accounts.
PO-486
For press releases, speeches, public schedules and official ~ograPhies, call auT 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office:

1998 - 619-559

According to Mr. Mathewson, over 95 percent of the more than 1,000 depositors in his
bank were u.s. citizens, and the bank had over $150 million in its accounts when it was shut
down in 1995. The IRS has to-date obtained tax evasion convictions on, and collected
substantial back taxes from, over 20 of Mr. Mathewson's clients. The IRS was able to
demonstrate this evasion only because of Mr. Mathewson's extraordinary cooperation. Without
it - and because we do not have an information exchange agreement with the Cayman Islands this large-scale tax evasion would have gone unpunished.
I should note that the United States and the Cayman Islands have been discussing new
legal mechanisms to provide for effective exchange of information, and that the Cayman Islands
is one of the jurisdictions that has made a commitment to implement effective information
exchange procedures in connection with the OECD harmful tax practices initiative.
The use of offshore entities or accounts by U.S. taxpayers to evade their tax obligations is
likely to increase because of trends that are unlikely to be reversed, including the increasing
solicitation of U.S. taxpayers by offshore banks through the Internet and the ease of access to
offshore funds through electronic banking and account-linked credit cards, which may allow
significant fund transfers that do not create a paper trail. The primary obstacle to enforcement of
our tax laws in these cases remains the unwillingness of jurisdictions to enter into effective
infonnation exchange agreements with the United States that would provide us with access to
critically important infonnation in cases involving suspected tax cheats.
F or example, in connection with a recent tax investigation, IRS examiners suspected that
an offshore International Business Corporation (rnC) and its offshore bank account were being
used by a U.S. taxpayer to evade the taxpayer's U.S. tax obligations. The IRS could not obtain
the shareholder and bank account information needed to prove this because there was no treaty
or agreement in place that allowed the exchange of taxpayer information with the jurisdiction in
which the rnc was established. Put simply, jurisdictions with strict bank secrecy rules and a
resistance to cooperate in tax matters facilitate the evasion of U.S. tax.
U.S. efforts to address tax evasion
The United States employs a multi-prong strategy to enforce our tax laws. First and
foremost, we undertake significant unilateral efforts to combat tax evasion. For example, we
presently are engaged in a multifaceted effort to address the problem of fraudulent tax schemes,
many of which employ offshore entities or secret bank accounts. The IRS estimates that there
are thousands of Internet sites with information relating to methods for evading u.S. tax
obligations. Our approach is to educate the general public to avoid these scams and to take civil
and criminal enforcement action against those who use them and those who promote them.
While we do everything we can ourselves to address tax evasion, we can be more
effective with the cooperation of other countries. When the United States suspects that a
particular taxpayer is evading U.S. tax laws through the use of offshore entities or secret bank
accounts , we sometimes need information from another country to address that situation. The
United States has been more successful than any other country in negotiating and implementing
tax infonnation exchange agreements.

Our tax information exchange agreement program was initiated in 1983 to encourage the
entry into these agreements by jurisdictions with which we would not conclude comprehensive
income tax treaties - typically low or no tax jurisdictions for which the provisions in a
comprehensive treaty addressing issues of double taxation are not necessary. The United States
has tax information exchange agreements with five of the jurisdictions identified as tax havens
by the OECD in June 2000, as well as with another jurisdiction that made a commitment with
respect to the OECD initiative and was not included in the June 2000 list. Most other OECD
countries do not have information exchange relationships with any of the identified jurisdictions.
At present, the United States has over 60 bilateral tax treaties and agreements that
provide for information exchange. The information exchange provisions in these agreements are
consistent with, and have served as a significant resource in the development of, international
standards with respect to information exchange. The United States frequently is able to
prosecute taxpayers for tax evasion because of information obtained from other countries.
Further, the fact that the United States may be able to obtain information from a foreign country
when we have reason to suspect noncompliance helps to deter taxpayers from attempting to
evade tax through entities or accounts in that country.
The United States, however, has been unable to develop information exchange
relationships with some jurisdictions that are significant financial centers. Some jurisdictions
simply are not interested in cooperating in this regard. Other jurisdictions are wary of agreeing
to effective tax information exchange with the United States unless competing offshore financial
centers enter into similar agreements. Working with the OECD and other OECD member
countries on the development of a framework for reaching information exchange agreements
with these jurisdictions may indeed prove fruitful.
In order to effectively enforce our own tax laws, it is critical that we are able to obtain the
cooperation we need from other countries. The OECD initiative has the potential to advance the
interests of the United States in this regard. This objective is too important to allow the OECD
project to stray into other areas that could distract from or hinder success in this objective. In my
view, the OECD initiative has the greatest chance of enhancing the ability of the United States to
enforce our tax laws if it is focused on its core element: the need for countries to be able to
obtain specific information from other countries upon request in order to prevent noncompliance
with their tax laws.

History of the OEeD project
The OECD harmful tax practices initiative began in 1998 with the publication by the
OECD of a report that set out criteria to attempt to identify so-called "harmful tax practices" and
provided a framework for future work to address such practices. Part of that framework was the
establishment of a subsidiary OECD body called the Forum on Harmful Tax Practices, which
was co-chaired by the United States from October 1998 until October 2000. The United States
also has been one of four members of the Forum's steering group, called the Bureau to the
Forum, from October 1998 up to and including the present.

The 1998 OEeD Report, and a follow-up report issued in June 2000, contained rhetoric
that implicated fundamental internal tax policy decisions of countries within and outside the
OEeD, including decisions regarding tax rates. The Reports enumerated the harms potentially
caused by "tax havens or harmful preferential regimes that drive the effective tax rate levied on
income from the mobile activities significantly below rates in other countries." Tax systems that
"redirect capital and financial flows and the corresponding revenue from" other countries were
condemned as "poaching" the rightful tax base of the other countries, even though such systems
may simply provide a more attractive investment climate without facilitating noncompliance
with the tax laws of any other country.
The two OEeD reports take a notably condemnatory tone with respect to the issues
addressed, and the advocacy of internationally coordinated action against targeted countries
represents an approach that is more aggressive than is typical for the OEeD.
The OEeD's technical work on harmful tax practices has proceeded on three tracks since 1998:
The identification and elimination of harmful tax practices within OEeD member
countries;
The elimination of such practices in identified tax haven jurisdictions; and
Outreach to other non-OEeD jurisdictions, with the goal that such jurisdictions
eventually eliminate their own harmful tax practices.
The 2000 OEeD Report identified 35 so'-called "tax haven" jurisdictions. Under the
criteria established in the 1998 OEeD Report, a tax haven is a jurisdiction that imposes no or
nominal direct taxes on fmancial or other mobile services income and also meets one of three
other criteria: (1) its regimes lack transparency; (2) it does not engage in effective information
exchange; or (3) its regimes facilitate the establishment of entities with no substantial activities.
The 2000 Report also identified 47 "potentially" harmful preferential tax regimes in OEeD
member countries. A harmful preferential regime is a regime that provides for low or no
taxation of financial or other mobile services income and also meets one of three other criteria:
(1) the regime lacks transparency; (2) the country does not engage in effective information
exchange with respect to taxpayers utilizing the regime; or (3) the regime is "ring fenced" (as
described below).
The 2000 Report provided a one-year period for the identified tax havens to enter into
commitments to eliminate (by the end of 2005) their harmful tax practices. The 2000 Report
also provided that jurisdictions that do not make such commitments will be included on a list of
"uncooperative" tax haven jurisdictions to be published in July 2001. The report anticipated that
the OEeD would recommend that OEeD member countries implement a coordinated framework
of "defensive measures" against the jurisdictions that are listed as "uncooperative."

Concerns about the OECD project

On February 17th, following a meeting of G7 Finance Ministers in Palermo, I indicated
that certain aspects of the OEeD project were under review by the Administration. I was
troubled by the notion that any country, or group of countries, should interfere in any other
country's decisions about how to structure its own tax system. I felt that it was not in the interest
of the United States to stifle tax competition that forces governments - like businesses - to create
efficiencies. I also was concerned about the potentially unfair treatment of some non-OEeD
countries, with regard to both the deadlines to which they were being SUbjected and the
uncertainty created by the lack of clarity with respect to the application of the "no substantial
activities" criterion. This perceived unfairness seemed to be contributing to the difficulty in
obtaining commitments from most of the identified jurisdictions. I was particularly troubled
because these aspects of the project did not relate to what appeared to be a critical - and
attainable - objective of the OEeD' s work: the establishment of a framework for reaching
information exchange agreements with countries that have shown little interest in cooperating
with other countries on tax matters in the past. Indeed, these aspects distracted from and
interfered with the achievement of that objective.
Our review of the OEeD project has been guided by two fundamental principles. First,
we must do everything that we can to enforce our own tax laws, including working to obtain
needed information that is in the hands of other countries. Second, we will not interfere in the
internal tax policy decisions of other countries. These principles led me to conclude that the
United States should attempt to refocus the OEeD initiative on its core element: the need for
countries to be able to obtain specific information from other countries upon request in order to
prevent noncompliance with their tax laws.
Recent developments with respect to the OECD tax haven work

I am happy to report that, together with other OEeD member countries, we have made
substantial progress in focusing the initiative on its core element of effective information
exchange and in addressing aspects of the initiative that seemed unfair to non-OEeD countries.
Treasury representatives have worked with their counterparts from other OEeD countries
through the OEeD process and have been able to obtain agreement to significant modifications
to the work with respect to tax haven jurisdictions. The recent discussions regarding the OEeD
project focused on the portion of the work relating to tax haven jurisdictions because that work
was facing immediate decision points and deadlines. The modifications recently agreed to at the
OEeD were noted in the July 7th report by the G7 Finance Ministers on Fighting the Abuses of
the Global Financial System.
I would like to summarize three significant modifications to the OEeD tax haven work,
each of which I will describe in greater detail below.
First, coordinated defensive measures would not apply to "uncooperative" tax haven
jurisdictions any earlier than they would apply to similarly-situated OEeD member
countries.

Second, the "no substantial activities" criterion will no longer be applied to detennine
whether or not a jurisdiction is considered to be an "uncooperative" jurisdiction.
Third, the time for tax haven jurisdictions to make a commitment to transparency and
infonnation exchange has been extended from July 31st to November 30th.
The United States argued ~or each of these modifications within the GEeD, and strongly
supports them. It is important to note that the United States was not alone within the GEeD in
advocating these modifications, and that agreement within the GEeD would not have been
possible without the support of other countries. In my view, these modifications constructively
focus and clarify the OEeD tax haven work, and therefore increase the likelihood that it can
achieve its critical objective.

Parity of timeline for application of defensive measures. In order for the OEeD initiative
to have the legitimacy it needs to succeed, jurisdictions outside the GEeD must be treated no
more severely than similarly-situated OEeD member countries. The 2000 OEeD Report
anticipated the coordination and application of defensive measures by GEeD member countries
against "uncooperative" tax haven jurisdictions as of July 31, 2001. Such measures, however,
would not be applicable to similarly-situated OEeD member countries - including GEeD
member countries with substandard transparency or infonnation exchange practices which they
have not yet made commitments to improve - until April 2003 at the earliest. That disparity in
treatment would not have been fair. It is not surprising that there was unanimous support among
G7 countries to address this inequity.
Accordingly, the OEeD has now agreed that defensive measures would not be applicable
to non-OEeD jurisdictions any earlier than they would be applicable to similarly-situated GEeD
member countries. Each OEeD member country, of course, reserves the right to take or refrain
from taking any measure as appropriate, whether within the coordinated framework established
by the OEeD or outside of that framework. Tax haven jurisdictions will be able to observe
whether OEeD member countries with significant financial centers make the changes necessary
to meet the standards that the jurisdictions are being asked to meet. GEeD member countries
should hold themselves to standards and timelines at least as rigorous as those to which they hold
jurisdictions that are not part of the OEeD.

Removal of the no substantial activities criterion. Under the provisions of the 1998 and
2000 OEeD Reports, a jurisdiction that meets international standards of transparency and
information exchange could nevertheless be considered an "uncooperative" tax haven
jurisdiCtion potentially subject to defensive measures if it has regimes that facilitate the
establishment of entities with "no substantial activities." Application of the "no substantial
activities" criterion proved difficult, and the OEeD sought to apply a ring-fencing criterion to the
tax haven jurisdictions as a proxy. Under the 1998 OEeD Report, which addresses ring fencing
in the context of identifying hannful preferential regimes within GEeD member countries, a tax
regime is ring fenced if it available only to non-resident investors or if the activities of entities
formed under the regime are limited to international transactions.

The ring-fencing criterion is problematic because it does not provide an adequate basis to
distinguish regimes that facilitate tax evasion from regimes that are designed to encourage
foreign investment but that have nothing to do with evasion of any other country's tax law.
Countries may have good reason to provide different levels of taxation to income earned by
nonresidents or to income earned by residents from foreign activities, such as to provide
investment incentives or to improve access to capital markets. If such policies are not coupled
with a lack of transparency or a refusal to exchange information and otherwise do not interfere
with the enforcement by other countries of their tax laws, they should not be targeted by the
OECD initiative.
.
As a practical matter, the OECD has struggled to articulate the application of the "no
substantial activities" criterion, or the ring-fencing criterion as its proxy, to the tax haven
jurisdictions. Moreover, this criterion necessarily would have uneven application to the tax
haven jurisdictions as it would have potential application only to those jurisdictions that have an
income tax system and would have no application whatsoever to those jurisdictions that have no
income tax system. This lack of clarity in definition and uneven application are particularly
troubling because the criterion potentially implicates fundamental tax and economic policy
decisions of the jurisdictions.
Accordingly, the OECD has now agreed that neither the "ring-fencing" criterion nor the
"no substantial activities" criterion will be used to determine whether a jurisdiction would be
listed as "uncooperative" and would be subject to potential defensive measures.
Extending the time for commitment. In light of the recent modifications to the OECD
initiative and the number of jurisdictions that have yet to complete discussions with the OECD
with respect to commitments to improve their practices, it made good sense to reconsider the
anticipated July 31 st date for listing "uncooperative" tax haven jurisdictions. The OEeD is in
active discussions with many of these jurisdictions, and these discussions have proved to be quite
time-consuming. Maintaining the July 31st deadline almost certainly would have caused many
jurisdictions that are engaged in ongoing, good-faith discussions with the OEeD regarding the
commitment process to be included in the list of "uncooperative" tax haven jurisdictions. It
would have been counterproductive to so label jurisdictions merely because the OEeD and the
jurisdiction were unable to conclude their discussions by July 31st. In order to avoid this
inappropriate result, the time for jurisdictions to make commitments to improve transparency and
information exchange practices, and therefore avoid being considered an "uncooperative" tax
haven, is being extended from July 31st to November 30th.

Any jurisdiction that makes a commitment to meet international standards of
transparency and effective exchange of information will not be listed as "uncooperative" and will
not be subject to potential application of coordinated defensive measures. The United States
fully supports efforts to improve the information exchange and transparency practices of
countries within and outside the OECD which are necessary to enable other countries effectively
to enforce their own tax laws.

Information exchange standards. International standards with respect to exchange of tax
information have been developed through the work on the relevant provisions of the OECD
Model income tax treaty and other instruments. These standards have been strongly influenced
by developments regarding the U.S. Model income tax treaty and the standards set out in the
Internal Revenue Code with respect to tax information exchange agreements. The ten
jurisdictions that have committed to the OECD initiative thus far have been participating with
OECD member countries, including the United States, in developing an exchange of tax
information instrument based on these U.S. and international standards. It is anticipated that this
instrument could be used in meeting the jurisdictions' commitments to engage in effective tax
information exchange.
In the context of the OECD initiative, effective information exchange means that
governmental authorities will provide information upon specific request if necessary for the
conduct of a specific criminal tax investigation or civil tax examination. In general, information
exchange can be effective only ifbank secrecy, bearer shares, and other practices do not impede
such exchange. Requests for information that are in the nature of a "fishing expedition" are not
within the scope of standard information exchange relationships.
United States tax authorities may directly exchange tax information with authorities of
foreign countries only pursuant to bilateral tax treaties or tax information exchange agreements,
and the United States currently has over 60 such treaties and agreements. These treaties and
agreements provide that the information cannot be used for non-tax purposes or disclosed
without authorization, thus protecting the confidentiality of such information. The OECD
project contemplates that confidentiality standards will be included in the model exchange of
information agreement being developed by the joint group of OECD and non-OECD countries,
and the United States will continue to insist on these important protections in any agreement to
which it is a party.

Transparency standards. International standards with respect to transparency have been
developed at the OECD as part of the harmful tax practices initiative. In this context,
transparency means two things: (1) the absence of non-public tax practices, such as the secret
negotiation, or waiver, of public tax laws and tax administration rules; and \2~ the abse~ce of
obstacles, such as strict bank secrecy or the use of bearer shares, to obtaImng financIal or
beneficial ownership information within a jurisdiction. The United States supports efforts to
improve transparency as critical to establishing and maintaining an effective. informati~n
exchange relationship; a jurisdiction that could not obtain basic financial or benefiCIal o~ers~p
information from residents or finaricial institutions within its jurisdiction could not satISfy Its
information exchange obligations in a meaningful way. Efforts to improve transparency should
prevent the establishment of barriers to effective information exchange.

Possible application of defensive measures. The OEeD initiative can reach its core
objective of improving the ability of countries to enforce their own tax laws only if the
significant financial centers within and outside the OEeD are persuaded to meet international
standards for transparency and effective information exchange. Drafting lists and devising
defensive measures ultimately will not help countries curb noncompliance with their tax laws.
Accordingly, it is the hope of the United States and other OEeD member countries that we will
never have to consider the implementation of coordinated defensive measures with respect to
uncooperative jurisdictions.
It is important to note two things with respect to defensive measures in connection with

the OEeD harmful tax practices project. First, the threat of such measures by a group of 30
large, developed countries is by its nature highly coercive and accordingly should be reserved
only for jurisdictions acting in bad faith whose practices demonstrably facilitate the
noncompliance by taxpayers with the tax laws of other countries. In this context, such measures
must truly be measures of last resort.
Second, while the work in the OEeD project to refine the identification of appropriate
potential defensive measures is still in an early stage, it is important to recognize that several of
the defensive measures that have been identified thus far by the OEeD have been part of the
international tax policy of the United States and other OECD member countries for many years.
For example, the Internal Revenue Service has a practice of enhanced audit and enforcement
activities with respect to transactions and activities in jurisdictions which, in its experience, are
used by U.S. taxpayers to evade their U.S. tax obligations. These jurisdictions invariably do not
have effective information exchange agreements with us or other countries, and in fact most
were identified as tax havens by the OECD. In addition, since the mid-1980s, the United States
has had a policy of not entering into comprehensive tax treaties with no-tax jurisdictions because
such treaties would not serve a principal purpose of our bilateral tax treaties - the elimination of
double taxation on cross-border activities and investment flows - and because such jurisdictions
traditionally have not had effective information exchange practices. Consistent with that policy,
the United States has terminated several tax treaties in the last 20 years with no or low-tax
jurisdictions, many of which were identified as tax havens by the OECD.
More generally, however, the aspects of our international tax laws designed to prevent
noncompliance do not target lists of countries because, as the experience with the OECD
initiative shows, such lists are difficult to draw up and maintain and can become the subject of
controversy. Thus, most aspects of our international tax laws apply without regard to the
particular foreign jurisdiction in which the activity or taxpayer is located. For example, our tax
law includes a comprehensive controlled foreign corporation regime, as well as other
complementary anti-deferral regimes, that provides for the immediate taxation of certain
categories of foreign income earned by foreign corporations controlled by U.S. taxpayers. These
rules are not limited to corporations located in particular jurisdictions.

The United States, like other OECD member countries, would strongly prefer working
cooperatively with jurisdictions rather than contemplating the imposition of coordinated
defensive measures. It would be premature for me to speculate as to what measures, if any, the
United States or other countries might consider applying in two years if it were to come to that. I
will note at this time, however, that many of the defensive measures identified by the OECD
would require legislation and therefore would require action by Congress.

Concluding thoughts on the OECD project
I am heartened by the significant progress we have made with our OECD counterparts in
focusing the OECD's work with respect to tax haven jurisdictions on its core element: the need
for countries to be able to obtain specific information from other countries upon request in order
to enforce their own tax laws. It is clear from the recent developments with respect to the OECD
initiative that this important objective can be achieved without stifling tax competition. These
developments also reflect a fairer and more constructive approach to the dialogue with
non-OECD countries, whose cooperation ultimately is necessary to the success of the OECD
initiative. We look forward to ongoing discussion with countries both within and outside the
OECD aimed at establishing effective transparency and other mechanisms for the provision of
tax information upon specific request while protecting against unauthorized use and disclosure of
such information.

Additional comments on money laundering work
I would also like to make a few points about our work to combat money laundering,
something that I know has been of interest to this Subcommittee. First of all, this Administration
is committed to aggressive enforcement of the money laundering and asset forfeiture laws. To
that end, the President has nominated, with my full support, Jimmy Gurule, a former Federal
prosecutor and expert on money laundering enforcement, to be the Under Secretary for
Enforcement at Treasury. President Bush has also tapped Judge Robert Bonner, a former U.S.
Attorney and Administrator of the Drug Enforcement Administration, to head the Customs
Service, which plays a crucial role in our efforts to root out international money laundering.
Professor Gurule, with my full support, has announced his intention to make enforcement of the
money laundering laws his top priority during his tenure at the Treasury. Assistant Attorney
General Chertoff has told us that money laundering enforcement is also one of his top priorities
for the Justice Department's Criminal Division. Though neither Professor Gurule nor Judge
Bonner is yet confirmed, they have both been advising me on this issue. With their expert
assistance, and with the support of our colleagues at the Department of Justice, I am comfortable
that our internal review of our money laundering programs will put us in a position to ensure that
the American people are getting the best possible return on their investment in this area.
The previous Administration published a spread sheet that indicated that we spent about a
billion dollars each year combating money laundering. Since becoming Secretary I have learned
that that number was significantly in error, and I have asked the Treasury staff a series of tough
questions about the nature of our actual expenditures and what exactly we get in return for our
efforts. I'm still not satisfied that we have good answers to all of these questions, but I assure
you that, as we move forward, I will continue to push the staff to answer them.

I believe this approach is the best way to ensure effective public policy, regardless of the
subject area. It is clear to me that money laundering control is an important component of our
overall effort to combat crime and to protect the integrity of our financial institutions and
markets. But it is also clear to me that we can do a much better job in making ourselves
accountable to the American people.
We will circulate shortly for interagency review a draft of the 2001 National Money
Laundering Strategy. I expect we will be in a position to publish a final strategy in the coming
weeks. That strategy will articulate a number of specific steps across a range of different
activities, all designed to ensure effective law enforcement. The three main pillars of the
strategy will be, first, to focus our limited federal resources to investigate and prosecute money
laundering on high impact major cases; second, to protect the integrity of the U.S. financial
system; and third, to significantly improve the Government's capacity to measure the results of
its efforts, so that we can be fully accountable to the American taxpayers.
Thank you.

DEPARTMENT

THE

TREASURY

NEWS

TREASURY

OFFICE OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W. e WASHINGTON. D.C.e !0220 e (202) 622-2960

EMBARGOED UNTIL 9:00 A.M.
July 18, 2001

PUBLIC CONTACT: Office of Financing
202 -691-3550
MEDIA CONTACT: Office of Public Affairs
202 -622-2960

TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On July 19, 2001, the Treasury will buy back up to $1,5~~ million
par of its outstanding issues that mature between February 2023 and November
2027.
Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conduct~d by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its open Market
operations system.
Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may subm~t offers on
behalf of themselves and their customers.
Offers at the higbe~:t accepted
price for a particular issue may be accepted on a prorated basi_s, rounded up
to the next $100,000. As a result of this rounding, the Treas~ry may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the ter.ms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issuBs are given
in the attached highlights.
000

Attachment

PO-4S7

'
h d I 'and orl'icial hioaraphies call tJllr l../-lzlllir fax Cine at (202) 622-2040
For press Jlf!ieases, speecheS, pu/)/II sc e It e~
JJ'
~
,

HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
July 18, 2001
Par amount to be bought back ... Up to $1,500 million
Opera tion date . . . . . . . . . . . . . . . . . July 19, 2001
Operation close time . . . . . . . . . . . 11:00 a.m. eastern daylight saving time
Settlement date . . . . . . . . . . . . . . . . July 23, 2001
Minimum par offer amount . . . . . . $100,000
Multiples of par . . . . . . . . . . . . . . $100,000
Format for offers ..... Expressed in terms of price per $100 of par with
three decimals. The first two decimals represent
fractional 32 nds of a dollar.
The third decimal
represents eighths of a 32 nd of a dollar, and must
be a 0, 2, 4, or 6.
Delivery instructions . . . . . . . . . . ABA Number 021001208 FRB NYC/CUST
Treasury issues eligible for debt buyback operation (in millions) :

Coupon
Rate (%)
7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125

Maturity
Date
02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027

CUSIP
Number
912810 EP
912810 EQ
912810 ES
912810 ET
912810 EV
912810 EW
912810 EX
912810 EY
912810 EZ
912810 FA
912810 FB
Total

9
7
3
1
6
4
2
0
7
1
9

Par Amount
Outstanding*
16,773
22,659
9,704
10,634
11,695
12,838
10,018
11,168
10,211
10,016
22,046
147,762

Par Amount
Privately
Held*
14,138
21,106
8,089
9,041
9,896
11,674
8,404
9,444
8,836
8,376
18,698
127,702

Par Amount
Held as
STRIPS**
6,258
3,299
6,184
6,992
4,205
1,730
2,635
4,961
3,124
2,227
8,701
50,316

* Par amounts are as of July 17, 2001.
** Par amounts are as of July 16, 2001.
The difference between the par amount outstanding and the par amount
privately held is the par amount of those issues held by the Federal
Reserve System.

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220 • (202) 622-2960

FOR IMMEDIATE RELEASE
July 18, 2001

Contact: Tasia Scolinos
(202) 622-2960

MEDIA ADVISORY
EVENT:

Secretary O'Neill Returns Valuable Renaissance Drawings to Gennany on Behalf
of U.S. Customs Service

WHEN:

Thursday, July 19, 2001 at 11:00 a.m.

WHERE:

News Conference/Ceremony at U.S. Customhouse
6 World Trade Center - Room 716
New York, NY

Secretary of the Treasury, Paul H. O'Neill will return to officials of Gennany's Bremen Museum
late 15 th century drawings, among them works by Rembrandt, Jacob van Ruisdale and Albrecht
Durer. Durer's "Women's Bathhouse" has been valued at $10 million. Germany's Appointed
Ambassador to the United States Wolfgang Ischinger and U.S. Attorney Mary Jo White will
participate in the ceremony.
The 12 ink and chalk drawings were stolen from the Bremen Museum in Gennany during WWII,
and resurfaced in 1993, when the Azerbaijan Museum in Baku planned to exhibit them. The
cache of masterpieces ultimately ended up in New York City; the collection ofrare drawings has
an estimated value of $15 million.
Recovery of cultural and historical property is an important mission of the U.S. Customs Service.
Over the past several years, U.S. Customs has seized in excess of $40 million worth of stolen art
and artifacts.

PO-488

Fur press releases, speeches. public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED

JUly

:1.8,

tnrr::a.

2: 30 P. II(.

CON'rACT:

2001

Office of Fincmcing
202/691-3550

'1':RBA.S'C'RY '1'0 AtJ'C'rJ:ON SU,OOO HJ:LLION OF 2-TEAR NOTES

The Treasury wil~ auction $12,000 million of 2-year ~ees to refund $AS,510
mllieu o£ publicly beld notes maeuring .JUly 31, 2001, a.z:I.d eo pay doWZ1 about $16, S1g
mil.l.:i.ou.
:In addition eo the public ho~dings, Pederal ~eserve BaDks hold $6,168 million
matu~g not:es for their own accounts, which may be refunded by issuLng
an additional amoUllt of the Dew security.

of the

up eo $1,000 million in noncompetitive bids fram Poreign and InterDational
Monetary Au thcri ty (l"DIA) account. bi.dcti.ug through the Federal Reserve Bank of New
York rill be included wi1:h.in the offering a:moune of the auctiOA. 'rheae
n~nc~se1tive bids will have ilL limit of $200 million per account and will be
accepted iD the order of' smallest to largeut, up to t.he aggregate awarcl limit of
$1,·000 million.
1"rl!ilas'uryDirect: c:ustomers requested that we reinvest thiUr maeuring holdings
of approodma tel.y $732 millicm into the 2 -year note.

The auction will be conducted
tive and noncompetitive awards ~ll
tenders.
The alloc:ation perceneage
be rounded up to !!he next hundredth
The noees

be~g

in the Single-price auction fo~t. Al.l campetibe at tbe highest yield of accepted competitive
applied to bids awarded ~t the highest yield will
of a whole percentage poizat, e.g., l.7.13%.

of:£ered today a:e e1:i.gibla for the STRIPS program.
.

'!'h..is offering of Treasury securities is governed by the tenDS and conditiona
see for~~ i.n the ODifor.m Offer~ Circular for the Sale and Issue of Marketable 2ook'Bntzy "rreasury Bi11s, Notes, and Bonds (31 CJ'R Part 356, as amended).
'eta~15 about the DeW securiey are given iA the attached offaring highlights.

000

Attac:l:mtent

PO-489

For press rel.e6S~, spf!l!Chn, plllllH U'ltedules and .official biographies, call our 24-hoUf flU line at (202) 612-2040

XIGXraIGRTS OF n.B.AS'C'RY OFFElUNG TO
2-~

PWL:IC OF

NODS '1'0 1m ISSUED JULy 3l., 2001

J'ul.y 1.8, 200l.
Offering Amcunt. ..•••..••••.•••••••.••••.•••.•• $12,000 milliOl1
Public Offering •••••.••••••••••.••••••..•••••• Offering ~e less the ~t
awarded for ~ accounts
Descriptio:c of Offering:
T~ ADd Cype of •• curiey ••••••••••••••••••••• 2-year ncees
Series .............. ............ _ ............... e· . . . . . . . . . . • S-2003
CtrSIP lumber •••••••••••••••••••••••••••••••••• 912827 11& 4
AucUon date •••••••••••••••••••••••••••••••••• July 25, 2001
Issue data ••••••••••••.••••••••.••••.•.•••••.• July 3l., 2001
Dated cia.te •••••••••••••••.••••••••••••••••..•• July 31, 2 DOl.
Maturity date ••••••••••.••.•••••..••....••.•.• July 31, 2003
~u~erest rata •••••••••.••••••••••..•••••••.•.• Deea%mined based OD the highest

accepted competitive bid
Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l:)eta~aQ

.~ .UC~Ot:I.

~terest

payment dates ••••••••.••••••••••••••• January 31 and JUJ.y 31
~n~ bid amcunt and mu1eip1es •••••••••••••• $1,000
Accrued interese payable by invest.or •••••••••• Wone
Premium or discoUDt ••••••••••••••••••••••••••• Determined at auction
STRIPS ~nfor.mation:
Minimam amount :required •••••.•••..••••••••••.• $1,000
Corpus CO'S:rP· lItI:I:IIber ••••••••••••• ~ •••••••••••• '12820 Glt 7
Due date(s) and CO'SIP number(s)

for addiUonal TIHT(s) .•••••.••••.•••••••••• JUly 31,2003 - - 912833 YA 2
~a8ion

Bids~

Noncompetitive bidB~
Accepted in fuJ.l up to $5 million at ehe highest. accepteQ yield.
Foreign and ~ternation&l Konetary Authority (I"IKA) bids: lIoncompet.itj,ve loids
through t:he Federal Reserve Banks as agents for i'DSA accoUXlts.
in order of size fram mnallest to la;rgest wit:.A 110 more ~ $200
millio: 4warc:3.ed per aecoWlt. The tot.al DOZlcompetitive aIIIOUDt awarded. to ~ed.eral.
Reserve Ba%IJc:. as agents for PIKA accO\mta will DOt exceed $l., 000 m:il.l;i.ou. A
single bid tha~ would cause the ~t to be exceeded will be p~ial.ly accep~ed.
in the alDOUDt that brings the aggregate award ectal to t:.he $1,000 milJ.i.on limit.
However, if there are two or more bids ot equal amolmta that wcul.d cause the
lilrlt .to be exceeded, each will be prorated t.o a"9'oid exceeding ella limit.
COmpetitive bids:
(1.) Must be expressed as a yield with three decimal.·s, e.g., 7.123'_
(2) Net l.ong position for each bidder must be reported when the INm of the total
bie! amount., at. all yi,elds, and the net long posit.ion is $2 bi.l1ioz:a. or greater.
(3) Jiet. lcmg posi tio~ ~S~ be detez::m.:i.ned as of one half-hour prior eo the
closing time for receipt of cgmpetitive tenders.
aubait~c:3.
Accep~ed

Maximum Recognized Bid at a Single Yiel.d ••••••••••• 3S~ of public offering
Max';;:c,m

Award. ••.•••••••••••••••••••••••••••••••••••

3S~

of publ.ic offering

Receipt. of Tenders:

Noncompetit.ive tenders:
Prior to 12: 00 noon eastez:u daylight savi:g time on auct.ion day.

Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time
Payme~t

Oil

aucUo: day.

Te:m.s: By charge to a fullds account at a FedfU>al Reserve Bank CD issue date,
or payment o£ £ul1 par amount with tender. :rreasuryDirec:~ custcmers can use ebe Pay
Direct feature which authorizes a charge to their account of recor~ at ·tAe~r
fi~cial

institution on issue date.

EPA R T 1\;1 E N T

0 F

'IREASURY

THE

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED UNTIL 11 :00 A.M. EDT
Thursday, July 19, 2001

Contact: Tasia Scolinos
(202) 622-2960

STATEMENT OF TREASURY SECRETARY PAUL O'NEILL AT CUSTOMS ART
REPATRIATION EVENT
Good morning. It is my pleasure to welcome all of you here for the return of some very
historic and very valuable drawings by the old masters to their rightful home in Bremen,
Germany.
Welcome, Mr. Ambassador. I'm so glad you could be here today.
The Treasury Department's diverse law enforcement responsibilities include combating
the trafficking in stolen art and antiquities across the borders of the United States. When stolen
treasures are smuggled into the U.S., we do all we can to return them to their rightful owners,
and to bring any wrongdoers to justice. We take our responsibility very seriously, and today we
are happy to celebrate a victory in that regard.
The remarkable drawings being repatriated to Germany today had been missing from the
Bremen museum for over 50 years. Among them are works by Rembrandt and Jacob van
Ruisdael. The experts agree, however, that the real star of the collection is this small, late 15 th
Century drawing of "Women's Bath" by the seminal German artist Albrecht Durer. It alone has
been valued at $10 million.
The drawings were among the masterpieces that the Bremen Museum stored in a castle
for safekeeping in 1943. Toward the end of World War Two, Soviet troops occupied the castle.
Thereafter, the drawings found their way to the former Soviet Union, and by 1947 were in the
hands ofthe KGB. The drawings didn't surface again until 1993, when the National Fine Arts
Museum of Baku, Azerbaijan announced plans to exhibit them.
That's when the Bremen Museum in Germany asserted its ownership. But before they
could be returned, the drawings were stolen from the museum in Azerbaijan, along with 180
other works.
In 1997 this tale became a web of intrigue worthy of Hitchcock. The drawings surfaced
briefly in New York when U.S. Customs agents foiled an attempt to extort $6 million for their
return to the Bremen Museum.
PO-490
Fm- press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

The drawings were seized, and a Japanese businessman and a former Azerbaijan
prosecutor were arrested: one in a room of the Grand Hyatt Hotel on East 42 nd Street; and the
other near Washington Square Park, where she had led Customs agents on a high speed chase.
The 12 drawings belonging to Germany's Bremen Museum and 180 others belonging to
the museum in Azerbaijan had been stashed, in a closet and under a bed, in an apartment on
Ocean Parkway in Brooklyn. The drawings and prints belonging to Azerbaijan were returned last
month.
I want to commend Customs Special Agent Bonnie Goldblatt for her work on this
particular case. Let me also acknowledge the ongoing efforts by the entire Customs Art
Recovery Team, led by Tom Caso, here in New York. I also want to recognize the support the
team receives from the Office of Associate Chief Counsel.
Cooperation between the Treasury Department and the Justice Department has been a
hallmark of these art repatriation cases. Cooperation and ability to get the job done could not be
better than it is here in New York. That speaks well of the Special Agent in Charge in New York
led, Joe Webber; and, of course, of the hard-working U.S. Attorney for the Southern District of
New York, Mary Jo White.
Thank you for everything you do, and for the outstanding work in this case by Assistant
U.S. Attorney Alexander Shapiro, former Assistant Steven Heineman and by Maxine Pfeffer.
Commissioner Winwood mentioned Ms. Pfeffer's untimely death, which, I know, makes this a
bittersweet occasion, especially for those of you who worked closely with her.
You can all be very proud of the work you accomplished in this outstanding case.

--30--

EPA R T 1\;1 E N T

0 F

lRFASURY

THE

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED UNTIL 2:00 P.M. EDT
Thursday, July 19,2001

Contact: Tara Bradshaw
(202) 622-2960

TESTIMONY OF DEPUTY COMMISSIONER OF INTERNAL REVENUE
ROBERT E. WENZEL BEFORE THE HOUSE WAYS AND MEANS
SUBCOMMITTEE ON OVERSIGHT
MAILINGS ON ADVANCE PAYMENT CHECKS

Mr. Chairman, I welcome this opportunity to testify on the recent attempt to lure
taxpayers into needlessly paying for information about their advance payment checks.
The IRS will provide this information free of charge to all taxpayers in a series of
mailings that began on Saturday.

I fully share the subcommittee's concern and outrage about this brazen attempt to
prey upon unsuspecting taxpayers. And I applaud your efforts, Mr. Chairman, to expose
this unscrupulous activity through this hearing. As Justice Brandeis often remarked,
"Sunshine is the best disinfectant." We will work with you, the Department of Treasury
and all interested parties to help raise public awareness about the problem. We have
placed an alert on our web site and we certainly would welcome any suggestions you
might have.
The IRS is concerned about any scheme or fraudulent solicitations, particularly
those that might rise to the level of criminal activities, such as mail or wire fraud. While
the IRS does not have independent jurisdiction to investigate mail and wire fraud, we will
work with the appropriate federal law enforcement agencies that do, such as the Postal
Service, to ensure that any such conduct is addressed.
Mr. Chairman, long before this scam appeared, we anticipated that there would be
enormous interest in the payments. We took great steps before and immediately
following enactment of the Economic Growth and Tax Relief Reconciliation Act of200l
to help taxpayers understand the process and to provide them legitimate and free
information through a variety of channels.
After passage of the conference report to the legislation, we began to receive
taxpayer calls. On May 31, 2001, in response to these calls, we provided on our toll-free
lines the following general announcement before the prompts:
PO-491
For press releases. speeches, public schedules and official bjographies, call our 24-hour fax line at (202) 622-2040

"If you are calling about the recently passed tax refund, there is nothing you need
to do to receive this check. The Internal Revenue Service will send you a letter by the
middle of July telling you the amount of the check you will receive and when you will
get it.
The IRS will begin mailing these checks by the third week in July. Please note
all payments will be made by check and direct deposit is not available. Again, there is
nothing that you need to do to get the check." Our representatives on the toll-free
telephone lines were also provided helpful scripts and answers to frequently-askedquestions to assist taxpayers.
As the President was signing the bill on June 7, IRS' Communications and
Liaison Division began issuing a nationwide press release and accompanying fact sheets
with the details of the advance payments checks. In the release, we stated that the IRS
wanted to make this process as simple as possible. Taxpayers would receive a letter
describing the check amount and the week it would be sent. We would also send a letter
of explanation for taxpayers not eligible for the advance payment.
We emphasized throughout our communications that taxpayers did not need to
call, fill out special forms or do anything else to receive the check. Commissioner
Rossotti was quoted as saying, "All you need to do is open your mailbox. We'll take care
of everything else. You don't need to do anything else to receive the check."
By our calculation~, as of July 6, IRS staff across the nation answered 168 media
inquiries, initiated nearly 400 media contacts to interest reporters to cover the story and
participated in almost 370 interviews with television, radio and print reporters. It was
front-page news or the lead story for many broadcasts.
IRS National Public Liaison also shared the fact sheets and releases with their key
practitioner contacts. The Government Liaison Division staff in the field began briefing
state tax administrator and local congressional offices using the prepared materials. At
the same time, we posted on the IRS web site, the Digital Daily, a cover story on the
advance payment checks as well as a special page on the advance payments.
On June 27, taxpayers calling on the toll-free telephone lines were able to
automatically receive information both on eligibility for the advance payments as well as
the check mail-out schedule. The information is available in both English and Spanish.
Clearly, we have worked very hard to get the message out about the checks.
Mr. Chairman, as the subcommittee is aware, of the 112 million advanced
payments notices printed, approximately half of one-percent or 500 thousand, contained
incorrect information on the amount of the check taxpayers would receive. The incorrect
information was the result of human error that failed to limit, in some cases, the tax relief
amount. This was not an error in our systems. In order to reduce the confusion, the IRS
will send corrected notice as soon as possible to the affected taxpayers.

Let me stress, Mr. Chairman, that the error was quickly detected and corrected
prior to any information being sent to FMS for the printing of checks. Taxpayers will
receive a check for the correct amount. We apologize for any confusion the incorrect
notices caused.
Mr. Chairman, in conclusion, we want to ensure that taxpayers do not fall prey to
the solicitation schemes. One of the best ways to attack this problem is by providing
taxpayers with the specific information they need about their advance payment checks.
Therefore, the IRS will continue to provide this information through a variety of channels
and we look forward to working with you and the Subcommittee to address this problem.
Thank you and I would be happy to answer any questions you have.

EPA R T 1\;1 E N T

lRFASURY

0 F

THE

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EIitBARGOlm 'DNTJ:L 2: 30 P .K.

JUJ.y 1.9, 2001

CO~ACT:

Office of F;nanc~
202/691-3550

TREASURY OFFERS 13-WEEX AND 26-WEEK B:r:LLS

The Treasury will auctian two series o~ Treasury bills total~
aPprox±m&tely $29,000 mdllion to refund $l~,400 million of publicly held
bill.s maturing Ju.l.y 26, 2001, and to raise about $9 I. 600 million of new cash.

zn addition to the public holdings, Federal Reserve Banks for their own
acCO'Wlts hold $1.0,447 million of the maturing :bi1.ls, which mal" be refunded at
the highest discount rate of accepted competitive tepoers. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 Ddllion ~ DODcompetitive bids frcm Foreign and ~ter
national MOnetar,y Authority (P~) acco~ts bidding through the Federal
Reserve Bank of Hew York will be included within the offering amount of each
auction. 'l'hese ~titive bid. will have a lb1it of $200 mill.ion per
aCdOW1t and will be accepted in the order of smal.lest to largest, up to the
aggregate award l~t of $1,000 million.

2'rea.sur.yD.:irect: customers have requested that we. reinvest their maturing
holdings of approxtmately $998 DdlliOA into the 13-week ~ill aDd $790 ~111on
into the 26-week bill.
r.rhe a11oea.tiCXl percentage applied to bids awarded at the highest c:li.sCOWlt

rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
'l'his offeril:l.g of '.rreasuzy securities .is governed rsy tl:le tezm8 end conditions set forth in the Unifo%m Offering Circular for the sale and Zssue of
Karketabl.e Book-Entry Treasur,y Bills, Notes, and Bonds (31 CPR Part 3S6, as
amenc1ed) •

Det.ails about each of the new securities are given in the attached
offering hig~ight.s.

PO-492
For press

Teleases~

speeches, public sch,dules and official biographies, ctdl OUT 24-hOIlT fax line 4t (202) 622-2040

HIGH[,J:OHTS OF TREASURY OrFER.INGS Oll' BILLS

TO BE ISSUED JULY 26, 2001
July 19, 2001
Offering Amount •..•••...••••..••••••••. $15,000 million
$14,000 million
Public Offerin~ •.•..••.•.••.••••.•••••• Offering amount less the amount awardod for FrNA accounts
Description of Offering I
Term and type of security •••••...•••.••
CUSIP nWRber •••••.•••.••••.••••••••••••
Auction date •••••••••••••••.•••••.•.•••
Issue date ••••..•••••.•••••••••••••.•...
'Maturity data ••••••••.•••• , ••••••••••••
Original issue date •••••••••••.•.••••••
CUrrently out.tanding .•••..••••••••••••
Minimum bid amount and multiples •••••.•

91-day bill
912795 JIll' 1
JUly 23, 2001
JUly 26, 2001
October 25, 2001
April 26,2001
$12,258 million
$1,000

182-day bill
912795 JD ,
July ~3, 2001
July 26, 200l.
January 24, 2002
.:JUly 26, 2001
$1,000

The following rul~8 apply to all securities mentioned above;
Submission of Bidsl
Noncompetitive·bidst Accepted in full up to $1 million at the highest discount rate of accepted
competitiv. bidB.
Foreign and Ynternational Monetary Authority (FJ:MA) bidsz Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FDMA accounts. Accepted in order of size from ~llest to largest
with no more than $200 mdllion awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks aB agents for FlMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggre~te award
total to the $1,000 million l~it. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive hldsl
(1) MUst be expressed as a discount rate with three dec~ls in increments of .005%, e.g., 7.100%,
7.105%.
(2) Net long position for e~ch bidder must be reported when the sum of the total bid amount, at all
discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing ttme for re~ipt of
competitive tenders.
Maximum Recognized Bid at a Bingle Rate •••• 35% of public offering
Maximum Award •••.•••••••••••••••••••••••••• 35% of public offering
Receipt of Tenders.
Noncompetitive tenders ••• Prior to 12.00 noon eastern daylight saving time on auction day
Competitive tenders •••••• Prior to 1:00 p.m. eastern daylight saving time on auction day
payment Terms,
By charge to a funds account at a Federal Res~rve Bank on issue date, or pa~nt of full
par amount with tender.
TreaBu~lrect customers can use the Pay Direct feature which authorizes a charge
to their account of record at their finanoial institution on issue date.

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lRFASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

FOR IMMEDIATE RELEASE
July 19, 2001

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

TREASURY DEBT BUYBACK OPERATION RESULTS

Today, Treasury completed a debt buyback (redemption) operation for $1,500 million
par of its outstanding issues. A total of 11 issues maturing between February 2023 and
November 2027 were eligible for this operation. The settlement date for this operation will
be July 23, 2001. Summary results of this operation are presented below.
(amounts in millions)

Offers Received (Par Amount):
Offers Accepted (Par Amount):
Total Price Paid for Issues
(Less Accrued Interest) :
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield
of all Accepted Offers (%):
Weighted Average Maturity
for all Accepted Securities (in years):

$6,079
1,500

1,746

11
6

5.679

23.7

Details for each issue accompany this release.

PO-493

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

July 19. 2001
TREASURY DEBT BUYBACK OPERATION RESULTS

(amounts in millions. prices in decimals)
Table I
Weighted
Average
Accepted
Price

Coupon
Rate (%)

Maturity
Date

Par
Amount
Offered

Par
Amount
Accented

Highest
Accepted
Price

7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125

02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027

911
224
611
300
535
761
846
915
160
445
371

475
0
0
180
285
0
335
175
0
50
0

117.906
N/A
N/A
125.195
115.578
N/A
114.234
110.921
N/A
109.507
N/A

117.864
N/A
N/A
125.156
115.546
N/A
114.198
110.919
N/A
109.476
N/A

Weighted
Average
Accepted
Yield

Par Amount
Private1v Held.

5.678
N/A
N/A
5.676
5.681
N/A
5.680
5.681
N/A
5.674
N/A

13.663
21.106
8.089
8.861
9.611
11.674
8.069
9.269
8.836
8.326
18.698

Table II

Coupon
Rate (%)

Maturity
Date

CUSIP
Nwnber

Lowest
Accepted
Yield

7.125
6.250
7.500
7.625
6.875
6.000
6.750
6.500
6.625
6.375
6.125

02/15/2023
08/15/2023
11/15/2024
02/15/2025
08/15/2025
02/15/2026
08/15/2026
11/15/2026
02/15/2027
08/15/2027
11/15/2027

912810EP9
912810EQ7
912810ES3
912810ETl
912810EV6
912810EW4
912810EX2
912810EYO
912810EZ7
912810FA1
912810FB9

5.675
N/A
N/A
5.673
5.679
N/A
5.678
5.681
N/A
5.672
N/A

Total Par Amount Offered:
Total Par Amount Accepted:

6.079
1.500

Note: Due to rounding. details may not add to totals.
*Amount outstanding after operation. Calculated using amounts reported on announcement.

EPA R T 1\;1 E N T

lRFASURY

0 F

THE

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED UNTIL 7:00 P.M. EDT
Thursday, July 19,2001

Contact: Tony Fratto
(202) 622-2960

SPEECH BY SECRETARY PAUL Q'NEILLTO THE
BOND MARKET ASSOCIATION NEW YORK CITY

It's a pleasure to be here with you tonight. It's always a treat to come to New York,
where everyone thinks Paul O'Neill is a hero. Although since he's announced his retirement, I
guess I only have a few more months to enjoy that confusion.
th

Tomorrow is the 6 month mark of this Administration, and I'm really proud of what
we've been able to do so far. We really challenged the conventional wisdom, and I think we're
making a difference.
Success of the Tax Cut
In January, we were told over and over again that Congress couldn't pass a tax cut before
September. We said that's not good enough. In my testimony on the Hill I said when I ran a
company and decided to give my employees a raise, it didn't even take 9 days, never mind 9
months. There was a consensus in Washington that we should have a tax cut and that we should
stimulate the economy, so it was time to act.

We were able to overcome all the conventional wisdom and pass a tax cut in time to have
fiscal policy hitting the economy when it is needed most. The President asked the Congress to
speed up passage and make the tax cut retroactive to this year, in order to have a real fiscal
stimulus. The Congress obliged, and tomorrow we begin sending out 92 million rebate checks to
every American who paid income taxes last year. We're injecting $40 billion into the economy
right when we need it the most.
The rebates will have an added stimulus effect because they are connected to long-term
tax rate reductions. The rate reductions began on July 1, and 35 million taxpayers will see a little
more in their very next paycheck. The long-term relief changes people's expectations of their
available resources, so they don't just spend the check they get in the mail next month, they
. permanently change their spending behavior. Private forecasters have estimated that the tax cut
will boost growth somewhere in the range of 0.5 to 1.5 percentage points going forward. This is
a ralc Washington success story, where process and politics couldn't stop a good idea.

PO-494
Far press l'eleases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Individual Wealth Creation through Social Security Reform
The next challenge is Social Security. You all know the numbers, so I won't bore you
with 75-year actuarial balances. It's a simple fact that if we do nothing the Trust Fund won't
have enough to pay even today's level of benefits. So, we've got a problem that we need to fix.
But I don't view this challenge as just a matter of solving an actuarial problem. I view it as an
enormous opportunity to spread financial independence to millions of Americans, especially to
groups who've struggled to reach that independence so far.
yYhat we have to do is highlight these opportunities for financial security and also force
Washington to acknowledge that there's a major cost to continuing with the current system
unchanged.
We can't fix the problem until Americans understand what Social Security holds for them
today. I've seen quotes stating that the Trust Fund is good for another 80 to 100 years. That's
either willful misinformation or determined ignorance. And it's not fair to the American people.
Millions who are trying to plan for their retirement have a right to know that the system is
unsustainable in its current form.
Yet when I said "there are no real economic assets in the Trust Fund" you'd have thought
I said the sky is red. I got angry letters from people who should be joining with me in
recognizing this truth and doing something about it. Even when I pointed out that the Clinton
Administration acknowledged in its 2000 budget that the Trust Fund held no real economic
assets, that didn't end the tirade. I'm not telling you anything you don't already know, but
somehow people in Washington think in tell you this, you'll panic. You know better, and so do
1. That's why I'm not going to stop telling the truth.
Social Security took millions of people out of poverty. It was - and is -- a brilliant idea.
Now it's time for the next step. It's time to make Social Security a program that enables every
Ame11can to create wealth for their retirement security.
Ifwe want people to live out their retirements with the dignity they deserve, then we have
an obligation to make every American a wealth accumulator. It's just wrong to mislead people
with promises of "trust the government, you'll be fine." People can do better if they own their
own retirement nest egg. That's true for people of every economic and social background.
Personal ownership allows them to accumulate funds and multiply them by the power of
compound interest.
You all know that women tend to outlive men. So women need a larger retirement nest
egg to ensure that they are comfortable in their senior years. They should be able to put the
magic of compound interest to work for them, generating greater financial security and peace of
mind.

You've all heard the statistics that minority men on average don't live as long as the rest
of the population. Instead of forfeiting all the payroll taxes they've paid in to the system,
shouldn't they be able to pass that nest egg on to their children, to improve their families' living
standards?
Real ownership would make financial security possible: the ability to create a nest egg
that is always there, no matter what political decisions are made in Washington. Millions of
Americans who today live from paycheck to paycheck can become wealth accumulators, and
improve living standards for generations to come. After all, the American Dream is for every
generation to reach a higher living standard than the generation that went before. We all want
our child!en and grandchildren to enjoy opportunities we didn't have. Giving more working
Americans the opportunity to own their own nest egg will create a domino effect in families, as
wealth is passed from generation to generation.
I think this is another instance where process and politics won't be able to stop a good
idea. Once people understand how much better their retirements can be, they will demand
personal accounts and Washington will oblige.
Economic Outlook
Let me finish by turning to the economy for a moment.
You might remember the rough treatment I got back in April when I said that the
economies of the world are interconnected. I was reflecting on my understanding of how our
global economy works, how the linkages between investment and spending patterns in the major
economies were likely to play through. To me it was simply a statement of fact - and the
reaction seemed to be a statement from those who didn't want to accept those facts. In recent
weeks, we've seen just how interconnected the economies of the world are. We've seen
increasing reports of how the slow down in the US is affecting other economies, from Singapore
to Germany-making the fiscal and monetary policy steps taken this year to boost the US
economy even more important.
I believe the US economy has the flexibility to adjust and recover very quickly.
Certainly pro-growth policies around the world are crucial, both for the world living standard
and for the US specifically. A strong world economy requires growth from the three largest
economies in the world - the United States, Europe and Japan. I remain optimistic that we are
going to see higher growth next year, and that, as we did in 1998, the US economy we will lead
the world back to the path of prosperity.

-30-

DEPARTMENT

THE

TREASURY

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C•• 20220. (202) 622-2960

EMBARGOED UNTIL NOON
June 20, 2001

Contact: Tara Bradshaw
(202) 622-2960

THE CHECK IS IN THE MAIL
Today, Treasury Secretary Paul O'Neill and Vice President Cheney visited Treasury
Department's Financial Management Service's Kansas City facility as the first advance payment
checks are mailed to taxpayers. Nearly 8 million checks are being mailed today, delivering $3.3
billion in immediate tax reliefto hardworking American taxpayers.
Treasury Secretary PaulO 'Neill delivered the following remarks in Kansas City:

"The check is in the mail! Those words couldn't be more true today. Nearly 8 million
checks - totaling $3.3 billion, are in the mail today. And that's just the first shipment. We are
here to proudly tell 92 million Americans, "the check is in the mail" -- thanks to the President's
leadership in passing tax relief.
"This facility is among five nationally that will produce and issue 92 million rebate
checks for American taxpayers over a ten week period. I'd like to personally thank Jack Adams,
the Director of the facility, for all of the hard work he has already done, and will do, over the
next ten weeks. He, and the other four FMS center Directors, are playing a critical role in this
enormous undertaking.
"Jack and his colleagues will be sending out as many as ten million checks a week for ten
weeks! It's an enormous job, but I know you and your staff are up to it and for that reason, you,
and all of your fellow FMS colleagues, have our sincere thanks. You taxpayers out there may see
Jack's signature on your check - and then you can thank him too.
"Working Americans across the nation are going to receive a total of $38 billion dollars
back from Washington by the end of September. That 38 billion comes at exactly the right time
to give the softening economy a much needed shot in the arm. This is a rare instance when fiscal
policy hits exactly when it was needed most.
"We're getting money back to the taxpayers in record time because the President focused
like a laser beam on the tax relief package during his first mo~ths in office. The conventional
wisdom back in January said it would take the entire first year of his term to pass the tax relief
bill. "We challenged the conventional wisdom, and the results are right here before you in this
stack of checks headed out to taxpayers today.
PO-495
Fur press re{«uu,
~

tJjJ6tK:h~6J publiC'

w.edules and official biographies, call our 24-hour fax line at (202) 622-2040

"Finally, I want to thank Congress too. I'm glad members of Congress put politics aside
and allowed this bipartisan legislation to move forward. It's now clear that working Americans
are going to receive significant tax relief. The President has shown the American people that
great things can happen when both parties work together and unite around principle."

The Treasury Department will announce every week the number of checks that are being
mailed out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will
be mailed over a ten-week period, according to the last two digits of the taxpayers Social
Security number. Notices from the Internal Revenue Service that tells taxpayers the amount of
their check and when they should expect it have been mailed. Single taxpayers will get a check
up to $300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers
may receive their checks at different times than their neighbors or other family members.
On a joint return, the first number listed will set the mailout time.
If the last two digits of your

Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 -79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

D EPA R T i\J E N T

0 F

THE

T REA SUR Y

NEWS
omCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 _ (202) 622.2960

EMBARGOED UNTIL 11 :30 A.M.
July 23,2001

CONTACT: Tony FrattolRob Nichols
(202) 622-2960

TREASURY TO ISSUE FOUR-WEEK BILLS
Treasury announced today that it plans to begin regular weekly offerings of 4-week bills. The
securities will be reopenings of outstanding 26-week bills. Regular weekly offerings of 4-week bills will
help smooth seasonal fluctuations in Treasury's cash balances and reduce reliance on cash management
bills.
The announcement for the first auction will be on Monday, July 30,2001 at 11:30 a.m. for an
auction on Tuesday, July 31, 2001 at 1:00 p.m., with settlement on Thursday, August 2. The
4-week bills will be offered in addition to regular weekly auctions of 13- and 26-week bills. Details
about the new security are given in the attached fact sheet.
Subsequent announcements for 4-week bills will be on Mondays at 11 :30 a.m. Auctions will
take place on Tuesdays. Settlement will be on the same day as for the other regular weekly bills, the
Thursday following each auction. Minimum bid amounts and multiples will be the same as for other
regular weekly bills, $1000. These bills will not be available for purchase through TreasuryDirect.
In a companion press release, Treasury announced the publication in the Federal Register of an
Advance Notice of Proposed Rulemaking (ANPR) that solicits public comments on potential
modifications to Treasury's Uniform Offering Circular (31 CFR 356) regarding the calculation of the
net long position (NLP) and the 35 percent award limit in marketable Treasury securities auctions.
The potential modifications have been proposed to ensure active and wide participation in Treasury
auctions, particularly in reopenings of securities which are auctions of additional amounts of
previously issued securities.
Until Treasury makes a decision regarding potential modifications to the calculation of the NLP
and auction award limit, competitive bidders in 4-week bill auctions will be required to report their
NLP if they meet or exceed the reporting threshold. Treasury will not include NLPs in the calculation
of the 35 percent award limit, but reported NLPs will be used to monitor distribution of securities in
the new 4-week bill auctions. This announcement does not affect or change the NLP calculation,
reporting requirements, and the application of the NLP for the auction of any security other than the 4week bill.
PO-496

-30-

For press releases. speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040

WEEKL Y TREASURY BILLS FACT SHEET

Instrument:

4-week

13-week

26-week

Frequency:

weekly

CUSIP:

reopening

new!

Announce day:

Monday

Thursday

Announce time:

11:30 am

2:30p.m.

Auction day:

Tuesday

Monday

Monday holiday:

Wednesday

Tuesday

Auction time:

1:00 p.m.

Noncompetitive bids:

12:00 noon

Settlement day:

Thursday

Competitive bidding:

3 decimae

3 decima1 2

NLP applies to 35% limit:

n0 3

yes

Noncomp. bidding:

yes

SOMA4 added on:

yes

FIMA4 in auction:

yes

TreasuryDirect:

yes

! Except for reopenings of remaining 52-week bills with more than 26 weeks remaining.
2 Expressed as a discount rate in increments of .005%, e.g., 7.100%, 7.105%.
3 Until the Treasury makes a decision regarding modifications to the calculation of the net long
position (NLP), competitive bidders in 4-week bill auctions will be required to report their
NLP if they meet or exceed the reporting threshold, but Treasury will not include the NLP in
the calculation of the 35 percent award limit.
4 System Open Market Account and Foreign and International Monetary Authorities
noncompetitive bids.

D EPA R T lVI E N T

0 F

THE

T REA SUR Y

NEWS

lREASURY

OFFICE OF PUBLIC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASIDNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED UNTIL 11 :30 A.M.
July 23, 2001

CONTACT: Tony Fratto/Rob Nichols
(202) 622-2960

TREASURY SEEKS COMMENTS ON MODIFICATION TO AUCTION RULES
Treasury announced the pUblication in the Federal Register of an Advance Notice of
Proposed Rulemaking (ANPR) that solicits public comments on potential modifications to
Treasury's Uniform Offering Circular (31 CFR 356) to the calculation of the net long position
and the 35 percent award limit in marketable Treasury securities auctions.
The 35 percent rule limits auction awards for anyone competitive bidder to 35 percent of
the total amount offered to the public less the bidder's net long position (NLP) in a particular
auction. A key component of the 35 percent award limit is the NLP calculation. The NLP is the
amount of a security that a bidder has obtained, or has arranged to obtain, outside of the auction.
If a bidder has a reportable NLP, it is subtracted from the 35 percent award limit in determining
the bidder's maximum award amount.
The purpose of any such modifications would be to ensure active and wide participation
in Treasury auctions, particularly in reopenings, which are auctions of additional amounts of
previously issued securities. Treasury is examining whether the current method for calculating
the NLP unnecessarily reduces participation in reopenings by bidders who already have
significant amounts of the security issued in previous auctions. Treasury invites comments on
alternatives to NLP reporting and the 35 percent award limit. Of particular interest are
comments on an alternative that would permit bidders in reopenings to exclude a portion of their
current holdings of the security being auctioned from their NLP calculation.
Until Treasury makes a decision regarding modifications to the calculation of the NLP
and auction award limit, competitive bidders in 4-week bill auctions will be required to report
their NLP if they meet or exceed the reporting threshold. Treasury will not include NLPs in the
calculation of the 35 percent award limit, but reported NLPs will be used to monitor distribution
of securities in the new 4-week bill auctions. This announcement does not affect or change the
NLP calculation, reporting requirements, and application of the NLP for the auction of any
security other than the 4-week bill.

PO-497

-30-

Far 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
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
July 23, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Nwnber:

91-Day Bill
July 26, 2001
October 25, 2001
912795HTI

High Rate:

3.480%

Investment Rate 1/:

3.561%

Price:

99.120

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 57.02%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Accepted

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

34,756,217
1,367,539
225,000

SUBTOTAL

36,348,756

Federal Reserve

4,868,321

TOTAL

41,217,077

13,407,617
1,367,539
225,000
15,000,156 2/
4,868,321

19,868,477

36,348,756 / 15,000,156

2.42

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,100,026,000

http://www .publicdebt.treas.gov

PO-498

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Nwnber:
High Rate:

182-Day Bill
July 26, 2001
January 24, 2002
912795JD4
3.440%

Investment Rate 1/:

3.549%

Price:

98.261

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted
1.22%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive
FIMA (noncompetitive)

32,346,284
1,102,703
150,000

5,578,757

Federal Reserve
$

39,177,744

12,747,679
1, 102,703
150,000
14,000,382 2/

33,598,987

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

19,579,139

Median rate
3.420%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.400%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 33,598,987 / 14,000,382 = 2.40
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $863,969,000

http://www .publicdebt. treas.gov

PO-499

federal financing
WASHINGTON, D.C. 20220

bankNEWS

FEDERAL FINANCING BANK

June 30, 2001

Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of May 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $38.7 billion on May 31, 2001,
posting a decrease of $333.4 million from the level on April 30,
2001. This net change was the result of an increase in holdings
of government-guaranteed loans of $46.0 million, and a decrease
in holdings of agency debt of $379.4 million. FFB made 59
disbursements and received 16 prepayments during the month of
May.
Attached to this release are tables presenting FFB May loan
activity and FFB holdings as of May 31, 2001 ..

po-soo

Page 2
FEDERAL FINANCING BANK
MAY 2001 ACTIVITY
Borrower

Date

Amount
of Advance

Final
Maturity

Interest
Rate

AGENCY DEBT
U.S. POSTAL SERVICE
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.

Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal

Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service

5/01
$350,000,000.00
5/01
$241,100,000.00
5/02
$180,000,000.00
5/02
$241,500,000.00
5/03
$198,700,000.00
5/04
$51,100,000.00
$302,500,000.00
5/11
$360,000,000.00
5/14
$282,700,000.00
5/14
$300,000,000.00
5/15
$206,200,000.00
5/15
$90,000,000.00
5/16
$286,200,000.00
5/16
$223,200,000.00
5/17
$590,000,000.00
5/18
$98,500,000.00
5/18
$23,100,000.00
5/21
$443,500,000.00
5/25
$380,000,000.00
5/29
$394,100,000.00
5/29
$370,000,000.00
5/30
$234,700,000.00
5/30
5/31 $1,050,000,000.00
$289,000,000.00
5/31

5/02/01
5/02/01
5/03/01
5/03/01
5/04/01
5/07/01
5/14/01
5/15/01
5/15/01
5/16/01
5/16/01
5/17/01
5/17/01
5/18/01
5/21/01
5/21/01
5/22/01
5/29/01
5/30/01
5/30/01
5/31/01
5/31/01
6/01/01
6/01/01

3.972%
4.046%
4.077%
4.015%
3.963%
3.859%
3.900%
3.870%
3.840%
3.900%
3.757%
3.840%
3.695%
3.695%
3.695%
3.735%
3.778%
3.786%
3.829%
3.840%
3.786%
3.809%
3.840%
3.757%

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

5/14
5/15
5/17
5/17

$82,174.70
$1,458,946.46
$41,392.69
$2,754.83

1/30/02
1/30/02
10/01/26
1/30/02

3.940%
3.880%
5.937%
3.791%

S/A
S/A
S/A
S/A

5/10
5/10
5/31
5/31

$43,964.23
$244,595.85
$13,840.47
$66,958.64

9/04/29
9/04/29
3/01/30
3/01/30

5.592%
5.592%
5.890%
5.890%

S/A
S/A
S/A
S/A

5/01
5/04

$265,000.00
$1,750,000.00

1/02/35
1/03/34

5.712% Qtr.
5.564% Qtr.

GOVERNMENT-GUARANTEED LOANS
GENERAL SERVICES ADMINISTRATION
Atlanta CDC Lab
Atlanta CDC Lab
Chamblee Office Building
Atlanta CDC Lab
DEPARTMENT OF EDUCATION
Tougaloo College
Tougaloo College
Barber-Scotia College
Barber-Scotia College
RURAL UTILITIES SERVICE
Washington Electric #655
Western Indiana #594

Page 3
FEDERAL FINANCING BANK
MAY 2001 ACTIVITY
Borrower
San Patricio Elec. #676
Douglas Electric #725
Colquitt Elec. #693
Little River Elec. #587
La Plata Electric #649
South Texas Electric #505
Adams Rural Electric #706
Fleming-Mason Energy #644
Burt County Public #669
Maquoketa Valley #636
North Central Elec. #638
Washington Electric #655
Carroll Elec. #618
Coop. Power Assoc. #450
Menard Elec. #518
Tri-State #475
United Power Assoc. #432
Bartlett Elec. #535
Empire Electric #627
Panhandle Rural Elec #572
Brown County Etec. #687
Cherokee Electric #562
Hart Elec. #698
Newberry Electric #704
San Miguel Power #492
S/A is a Semiannual rate.
Qtr. is a Quarterly rate.

Date

Amount
of Advance

Final
Maturity

5/07
5/08
5/09
5/09
5/11
5/11
5/14
5/14
5/16
5/16
5/16
5/17
5/22
5/24
5/24
5/24
5/24
5/25
5/25
5/25
5/29
5/29
5/29
5/29
5/31

$1,174,000.00
$175,000.00
$7,300,000.00
$2,164,000.00
$5,000,000.00
$588,000.00
$500,000.00
$1,400,000.00
$300,000.00
$2,000,000.00
$1,500,000.00
$140,000.00
$650,000.00
$14,837,000.00
$125,000.00
$7,619,000.00
$3,114,000.00
$300,000.00
$2,480,000.00
$500,000.00
$250,000.00
$2,630,000.00
$2,000,000.00
$4,164,000.00
$330,000.00

1/02/35
10/01/01
1/02/35
1/03/34
1/02/35
12/31/24
1/02/35
10/01/01
1/02/35
1/02/35
1/02/35
1/02/35
1/03/34
9/30/11
6/30/06
12/31/25
9/30/11
1/03/34
1/03/34
1/03/34
10/01/01
1/02/29
1/02/35
10/01/01
12/31/31

Interest
Rate
5.578%
3.715%
5.628%
5.622%
5.668%
5.702%
5.747%
3.764%
5.826%
5.826%
5.826%
5.802%
5.703%
5.268%
4.933%
5.826%
5.277%
5.921%
5.821%
5.821%
3.656%
6.763%
5.752%
3.656%
5.940%

Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.

Page 4
FEDERAL FINANCING BANK HOLDINGS
(in millions of dollars)

Program

May 31, 2001

April 30, 2001

Monthly
Net Change
5/1/01- 5/31/01

Fiscal Year
Net Change
10/1/00- 5/31/01

Agency Debt:
U~S. Postal Service
National Credit Union Adm.-ClF
Subtotal *

$5,889.0
$0.0
$5,889.0

$6,268.4
$0.0
$6,268.4

-$379.4
$0.0
-$379.4

-$3,373.0
$0.0
-$3,373.0

Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal *

$3,070.0
$5,155.0
$0.2
$4 270.2
$12,495.4

$0.0
$0.0
$0.0
$0.0
$0.0

-$340.0
-$385.0
-$0.4
-$56.7
-$782.1

Government-Guaranteed lending:
DOD-Foreign Military Sales
DoEd-HBCU+
DHUD-Community Dev. Block Grant
DHUD-Public Housing Notes
General Services Administration+
DOl-Virgin Islands
DON-Ship lease Financing
Rural Utilities Service
SBA-State/local Development Cos.
DOT-Section 511
Subtotal*

$2,258.1
$23.7
$9.6
$1,278.7
$2,290.6
$13.6
$949.1
$13,380.7
$139.8
$3.5
$20,347.3

$2,271.0
$23.3
$9.7
$1,278.7
$2,292.4
$13.6
$949.1
$13,317.5
$142.6
$3.5
$20,301.3

-$12.9
$0.4
$0.0
$0.0
-$1.8
$0.0
$0.0
$63.3
-$2.9
$0.0
$46.0

-$132.3
$3.0
-$1.2
-$69.8
-$22.0
-$1.1
-$98.4
$391. 2
-$19.4
-$0.1
$50.0

======

Grand total*

$38,731. 7

$39,065.1

-$333.4

-$4,105.2

* figures may not total due to rounding
+ does not include capitalized interest

federal financing
WASHINGTON, D.C. 20220

bankNEWS

FEDERAL FINANCING BANK

May 30, 2001

Kerry Lanham, Secretary, Federal Financing Bank (FFB) ,
announced the following activity for the month of April 2001.
FFB holdings of obligations issued, sold or guaranteed by
other Federal agencies totaled $39.1 billion on April 30, 2001,
posting a decrease of $276.1 million from the level on March 31,
2001.
This net change was the result of a decrease in holdings
of agency debt of $216.7 million, in holdings of governmentguaranteed loans of $59.1 million, and in holdings of agency
assets of $0.3 million. FFBmade 76 disbursements, and received
15 prepayments during the month of April. The FFB also extended
the maturities of 106 loans, and refinanced 28 loans, guaranteed
by the Rural Utilities Service.

Attached to this release are tables presenting FFB April
loan activity and FFB holdings as of April 30, 2001.

PO-50l

C\J

'<t
C\J

C\J
<0

0>
C\J
<0

L!)

N
N

~ ~
(/)
~

a..

u..
u..

Page 2
FEDERAL FINANCING BANK
APRIL 2001 ACTIVITY
Date

Borrower

Amount
of Advance

Flnal
Maturity

Interest
Rate

AGENCY DEBT
U.S. POSTAL SERVICE
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.

Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal
Postal

Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service
Service

4/02
4/02
4/03
4/03
4/04
4/04
4/05
4/05
4/06
4/06
4/09
4/13
4/13
4/16
4/16
4/17
4/17
4/18
4/18
4/19
4/20
4/20
4/23
4/27
4/27
4/30
4/30

$975,000,000.00
$363,700,000.00
$825,000,000.00
$209,400,000.00
$620,000,000.00
$229,300,000.00
$330,000,000.00
$292,500,000.00
$180,000,000.00
$286,600,000.00
$248,700,000.00
$270,000,000.00
$319,800,000.00
$575,000,000.00
$331,000,000.00
$360,000,000.00
$317,900,000.00
$175,000,000.00
$394,400,000.00
$382,000,000.00
$700,000,000.00
$280,300,000.00
$155,800,000.00
$250,000,000.00
$346,500,000.00
$500,000,000.00
$418,400,000.00

4/03/01
4/03/01
4/04/01
4/04/01
4/05/01
4/05/01
4/06/01
4/06/01
4/09/01
4/09/01
4/10/01
4/16/01
4/16/01
4/17/01
4/17/01
4/18/01
4/18/01
4/19/01
4/19/01
4/20/01
4/23/01
4/23/01
4/24/01
4/30/01
4/30/01
5/01/01
5/01/01

4.449%
4.346%
4.427%
4.274%
4.346%
4.222%
4.274%
4.232%
4.222%
4.065%
4.056%
4.201%
4.137%
4.137%
4.274%
4.137%
4.243%
4.274%
4.036%
3.994%
4.036%
3.890%
3.870%
3.963%
3.972%
3.953%
4.077%

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
S/A
S/A

5.503%
5.795%
4.347%
4.056%
5.752%
4.807%
4.021%

S/A
S/A
S/A
S/A
S/A
S/A
S/A

;OVERNMENT - GUARANTEED LOANS
GENERAL SERVICES ADMINISTRATION
Foley Square Office Bldg.
Chamblee Office Building
Atlanta CDC Lab
Atlanta CDC Lab
rCTC Building
San Francisco OB
Atlanta CDC Lab

4/10
4/17
4/17
4/20
4/24
4/25
4/30

$28,356.00
$622.04
$28,541.87
$1,717,549.90
$245,818.00
$194,875.41
$10,048.85

7/31/25
10/01/26
1/30/02
1/30/02
11/02/26
8/01/05
1/30/02

4/09
4/09

$52,456.34
$355,219.39

9/04/29
9/04/29

DEPARTMENT OF EDUCATION
Tougaloo College
Tougaloo College

5.382% S/A
5.382% S/A

Page 3
FEDERAL FINANCING BANK
APRIL 2001 ACTIVITY
Borrower

Date

Amount
of Advance

Final
Maturity

4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02

$3,231,063.96
$4,616,381. 74
$815,930.86
$2,496,687.30
$3,694,988.94
$1,982,000.00
$800,000.00
$600,000.00
$4,000,000.00
$3,251,756.02
$1,444,292.87
$359,540.79
$829,302.71
$1,082,812.39
$721,084.93
$414,585.05
$775,100.41
$934,244.74
$301,264.79
$218,646.12
$374,782.61
$219,654.06
$157,376.01
$137,105.67
$75,116.40
$113,507.85
$36,533.65
$1,206,500.20
$241,265.75
$910,715.06
$2,727,966.36
$1,633,705.10
$979,078.85
$591,143.98
$916,729.77
$498,042.08
$1,437,066.10
$1,731,480.67
$2,029,689.64
$830,354.18
$635,252.83
$419,410.72
$1,125,283.72
$1,462,112.65
$2,403,787.31
$2,572,990.77
$504,512.01

7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
1/03/34
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01

Interest
Rate

RURAL UTILITIES SERVICE
*Allegheny Electric #255
*Allegheny Electric #255
*Allegheny Electric #908
*Allegheny Electric #908
*Allegheny Electric #908
*A & N Electric #584
*Big Sand Elec. #540
*Big Sand Elec. #540
*BLUE GRASS ENERGY #674
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917

4.414%
4.414%
4.289%
4.289%
4.289%
5.392%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%
4.289%

Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.

Page 4
FEDERAL FINANCING BANK
APRIL 2001 ACTIVITY
Borrower
*Brazos Electrlc #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #917
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #437
*Brazos Electric #561
*Brazos Electric #561
*Brazos Electric #561
*Cental Virginia Elec. #593
*Central Texas Elec. #520
*Central Elec. Power #624
*Central Elec. Power #624
*Coop. Power Assoc. #130
*Coop. Power Assoc. #156
*Coop. Power Assoc. #450
*Fleming-Mason Energy #644
Fleming-Mason Energy #644
*Georgia Trans. Corp. #446
*Grayson Rural Elec. #619
*Harrison County rural #609
*Harrison County #532
*Harrison County #532
*Inter-County Energy #592
*Inter-County Energy #592
*Jackson Energy #527
*Karnes Elec. #568
*Magnolia Electric #560
*Meade County Elec. #662
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*New Horizon Elec. #473
*Nolin Rural Elec. #528
*Nolin Rural Elec. #577
*Oglethorpe Power #445
*Oglethorpe Power #445
Pataula Electric #585
~Pee Dee Elec. #547
South Texas Electric #505
~Saluda River Elec. #472
~San Miguel Electric #919
kSan Miguel Electric #919

Date

Amount
of Advance

Final
Maturity

Interest
Rate

$16,324.42
$860,712.06
$2,819,810.65
$2,209,944.46
$4,129,423.26
$1,395,470.81
$316,532.13
$3,032,061.21
$1,170,970.47
$491,854.79
$11,029,742.43
$5,551,524.76
$10,832,554.25
$1,000,000.00
$1,990,054.80
$2,920,000.00
$2,075,000.00
$917,392.70
$4,521,504.50
$2,022,851.05
$2,600,000.00
$1,500,000.00
$11,424,931.82
$1,200,000.00
$1,500,000.00
$1,000,000.00
$900,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$1,500,000.00
$5,000,000.00
$1,300,000.00
$5,011,444.82
$1,342,046.37
$2,171,022.54
$6,434,445.42
$3,276,973.37
$6,678,645.51
$1,686,034.39
$1,893,000.00
$2,583,000.00
$15,166,843.74
$15,690,867.53
$550,000.00
$5,530,000.00
$913,500.0 0
$1,253,638.71
$8,476,991.34
$8,900,940.10

7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
1/03/34
3/31/04
12/31/30
12/31/30
3/31/11
3/31/11
3/31/11
7/02/01
10/01/01
4/01/02
7/02/01
3/31/31
7/02/01
7/02/01
7/02/01
7/02/01
3/31/11
4/01/02
10/01/01
7/02/01
3/31/11
3/31/11
3/31/11
3/31/11
3/31/11
3/31/11
3/31/11
7/02/01
7/02/01
10/01/01
10/01/01
12/31/03
3/31/03
12/31/24
7/02/01
7/02/01
7/02/01

4.289%
4.289%
4.289%
4.414%
4.414%
4.414%
4.414%
4.414%
4.414%
4.414%
4.289%
4.289%
4.289%
5.392%
4.425%
5.383%
5.383%
4.916%
4.951%
4.971%
4.289%
4.074%
4.067%
4.289%
5.383%
4.289%
4.289%
4.289%
4.289%
4.880%
4.066%
4.198%
4.289%
4.951%
4.951%
4.951%
4.951%
4.951%
4.951%
4.951%
4.289%
4.289%
4.199%
4.199%
4.265%
4.161%
5.446%
4.414%
4.289%
4.289%

Page 5
FEDERAL FINANCING BANK
APRIL 2001 ACTIVITY
Borrower
*Steele-Waseca Coop. #550
*Steele-Waseca Coop. #550
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*Surry-Yadkin Elec. #534
*United Power Assoc. #432
*United Power Assoc. #432
*United Power Assoc. #433
*Upsala Coop. Tele. #429
*Upsala Coop. Tele. #429
Logan County Coop. #603
Pee Dee Elec. #547
Brazos Electric #561
Hamilton County Elec. #686
Big Sand Elec. #540
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
+Central Elec. Power #923
I-Central Elec. Power #923
I-Central Elec. Power #923
I-Central Elec. Power #923
I-Central Elec. Power #923
I-Central Elec. Power #923
I-Central Elec. Power #923
!-Central Elec. Power #923
-Central Elec. Power #923
-Central Elec. Power #923
-Central Elec. Power #923
-Central Elec. Power #923
-Central Elec. Power #923
Grundy County Elec. #689
Jefferson Energy #692
Darien Telephone Co. #719
E. Iowa Coop. #717
East Kentucky Power #413

Date

Amount
of Advance

Final
Maturity

Interest
Rate

4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/02
4/05
4/05
4/06
4/06
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/09
4/10
4/10
4/10

$3,695,000.00
$914,000.00
$1,000,000.00
$1,000,000.00
$500,000.00
$1,000,000.00
$1,000,000.00
$6,153,125.94
$2,981,060.24
$7,688,038.93
$40,038.27
$327,232.93
$801,000.00
$2,890,000.00
$8,469,000.00
$1,550,000.00
$1,000,000.00
$35,192.24
$69,597.25
$36,632.57
$36,565.41
$185,407.13
$44,587.15
$88,608.20
$30,499.63
$64,567.59
$335,140.01
$170,486.15
$612,315.16
$217,882.32
$298,443.13
$59,683.47
$397,294.08
$435,082.43
$50,330.55
$33,786.63
$66,335.53
$90,194.40
$119,674.43
$588,694.10
$307,246.77
$125,196.10
$114,479.17
$81,948.46
$129,553.90
$280,000.00
$2,880,000.00
$1,927,403.00
$3,440,000.00
$9,681,000.00

1/03/34
1/03/34
7/02/01
7/02/01
7/02/01
7/02/01
7/02/01
3/31/11
3/31/11
3/31/11
7/02/01
7/02/01
1/03/34
6/30/04
10/01/01
1/02/35
10/01/01
12/31/13
12/31/13
12/31/14
12/31/14
12/31/14
12/31/14
12/31/14
12/31/15
12/31/15
1/03/17
1/03/17
1/03/17
1/03/17
1/03/17
1/03/17
1/03/17
1/03/17
12/31/18
12/31/18
12/31/18
12/31/19
12/31/19
12/31/20
12/31/20
12/31/20
12/31/20
12/31/20
1/03/22
1/02/35
1/02/35
10/01/01
12/31/35
12/31/24

5.392%
5.392%
4.289%
4.289%
4.289%
4.289%
4.289%
4.976%
4.976%
4.976%
4.414%
4.414%
5.416%
4.280%
4.056%
5.458%
3.929%
4.873%
4.873%
4.920%
4.920%
4.920%
4.920%
4.920%
4.969%
4.969%
5.022%
5.022%
5.022%
5.022%
5.022%
5.022%
5.022%
5.022%
5.132%
5.132%
5.132%
5.185%
5.185%
5.235%
5.235%
5.235%
5.235%
5.235%
5.278%
5_377%
5.377%
3.931%
5.422%
5.326%

Page 6
FEDERAL FINANCING BANK
APRIL 2001 ACTIVITY
Borrower
Red Rlver Valley #484
Agralite Elec. #543
Inter-County Energy #592
Meeker cooperative #699
Oneida-Madison Elec. #582
Central Iowa Power #442
South Texas Electric #505
N. Pittsburgh Tele. #449
Central Elec. Power #624
Harrison County rural #609
Rural EleC'. Conven. #613
Socorro Elec. #541
Block Island Power #652
Clark Energy Coop. #611
Ellerby Telephone #635
Piedmont Tel. #566
Duck River E.M.C. #656
Irwin Electric #715
Fleming-Mason Energy #644
Lake Region Elec. #591
Lake Region Elec. #712
Missoula Elec. #688
Rio Grand Electric #615
Rio Grand Electric #615
Rio Grand Electric #615
Farmers Telephone #399
Ocmulgee Electric #654

Date

Amount
of Advance

Final
Maturity

Interest
Rate

4/10
4/13
4/13
4/13
4/13
4/16
4/16
4/18
4/19
4/19
4/19
4/19
4/20
4/20
4/23
4/23
4/24
4/26
4/27
4/27
4/27
4/27
4/27
4/27
4/27
4/30
4/30

$600,000.00
$402,000.00
$221,000.00
$845,000.00
$75,000.00
$2,900,000.00
$590,000.00
$4,701,000.00
$6,565,000.00
$1,000,000.00
$449,000.00
$910,000.00
$396,963.00
$3,000,000.00
$217,987.00
$528,000.00
$4,548,000.00
$2,030,000.00
$2,200,000.00
$591,000.00
$5,819,000.00
$1,590,000.00
$350,000.00
$350,000.00
$380,000.00
$2,016,854.00
$1,000,000.00

1/03/33
1/03/34
10/01/01
1/02/35
1/03/34
12/31/29
12/31/24
12/31/12
12/31/30
1/03/34
1/03/34
1/03/33
12/31/24
10/01/01
6/30/11
6/30/11
3/31/11
1/02/35
10/01/01
12/31/29
1/02/35
12/31/29
6/30/03
6/30/11
1/03/34
12/31/01
1/02/35

5.534%
5.550%
4.079%
5.553%
5.480%
5.667%
5.619%
5.145%
5.562%
5.573%
5.573%
5.569%
5.622%
3.916%
5.187%
5.178%
5.144%
5.704%
3.810%
5.600%
5.626%
5.602%
4.170%
5.152%
5.621%
4.000%
5.734%

S/A is a Semiannual rate.
Qtr. is a Quarterly rate.
maturity extension or interest rate reset
306C refinancing

Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.
Qtr.

Page 7
FEDERAL FINANCING BANK HOLDINGS
(in millions of dollars)
Monthly
Net Change
4/1/01- 4/30/01

Fiscal Year
Net Change
10/1/00- 4130/01

April 30, 2001

March 31, 2001

Agency Debt:
U.S. Postal Service
National Credit Union Adm.-ClF
Subtotal *

$6,268.4
$0.0
$6,268.4

$6,481.1
$4.0
$6,485.1

-$212.7
-$4.0
-$216.7

-$2,993.6
$0.0
-$2,993.6

Agency Assets:
FmHA-RDIF
FmHA-RHIF
DHHS-Medical Facilities
Rural Utilities Service-CBO
Subtotal *

$3,070.0
$5,155.0
$0.2
$4,270.2
$12,495.4

$3,070.0
$5,155.0
$0.5
$4,270.2
$12,495.7

$0.0
$0.0
-$0.3
$0.0
-$0.3

-$340.0
-$385.0
-$0.4
-$56.7
-$782.1

Government-Guaranteed Lending:
DOD·Foreign Military Sales
DoEd-HBCU+
DHUD-Community Dev. Block Grant
DHUD-Public Housing Notes
General Services Administration+
DOl-Virgin Islands
DON-Ship Lease Financing
Rural Utilities Service
SBA-State/Local Development Cos.
DOT-Section 511
Subtotal *

$2,271. 0
$23.3
$9.7
$1.278.7
$2,292.4
$13.6
$949.1
$13,317.5
$142.6
$3.5
$20,301.3

$2,273.7
$22.9
$9.7
$1.278.7
$2,292.8
$13.6
$949.1
$13,371.4
$145.1
$3.5
$20,360.4

-$2.7
$0.4
$0.0
$0.0
-$0.4
$0.0
$0.0
-$53.9
-$2.5
$0.0
-$59.1

-$119.4
$2.6
-$1.1
-$69.8
-$20.2
-$1.1
-$98.4
$328.0
-$16.5
-$0.1
$4.0

======

--------

====

$39,065.1

$39,341. 2

---------

-$276.1

-$3,771.8

Program

Grand total*
* figures may not total due to rounding
+ does not include capitalized interest

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lREASURY

OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

u.s. International Reserve Position

7/24/01

The Treasury Depanment today released u.s. reserve assets data for the week ending July 20,2001. As indicated in this
table, u.s. reserve assets totaled $65,634 million as of July 20, 2001, up from $64,845 million as of
July 13,2001.

(in US millions)

I. Official U;S. Reserve Assets

1. Foreign Currency Reserves

a. Securities
Of which, issuer headquartered in the U.S.
b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
b.iii. Banks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.
2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

5. Other Reserve Assets

July 20: 2001
65,634

July 13: 2001
64,845

TOTAL
Euro
5,128

8,677

Yen
10,565

4,574

Yen

TOTAL
15,692
0

Euro
5,252

10,728

TOTAL
15,979
0

13,251
0
0

8,874

4,645

13,519

0
0

0
0
0
0

14,424

14,561

10,433

10,532

11,044

11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current 'market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and

deposits reflect carrying values.

21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRldoliar exchange rate for the reporting date. The IMF data for July 13 are final. The entries in the table above
for July 20 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce. Vall}es shown are as of May 31, 2001. The April 30, 2001 value was
$11.n46 million.

PO-S02

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
July 13. 2001
1. Foreign currency loans and securities

July 20, 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
July 20, 2001

July 13.2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
~. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

o
o

EPA R T 1\;1 E N T

0 F

THE

lRFASURY

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

FOR ININIEDIA TE RELEASE
July 24,2001

CONTACT: Tara Bradshaw
(202) 622-2960

UNITED STATES AND UNITED KINGDOM SIGN NEW
INCOME TAX CONVENTION
The Treasury Department announced Tuesday that Secretary ofthe Treasury Paul H.
O'Neill and U.K. Chancellor of the Exchequer Gordon Brown signed a new income tax
Convention between the United States and the United Kingdom during Secretary O'Neill's trip
to London. The new Convention will replace the existing Convention between the United States
and the United Kingdom, which has been in effect since 1980.
Welcoming the Convention, Secretary O'Neill commented:
"The new Convention we have signed today will modernize the tax treatment of crossborder trade and investment between the United States and the United Kingdom to reflect the
increasing importance of international activity to our economies and developments in our tax
laws during the last two. decades. What has not changed over these many years, however, is the
importance of our transatlantic relationship in the field of taxation. The similarities in our tax
systems and the high level of investment in both directions make this treaty unique in the U.S.
tax treaty program. As a reflection ofthis continuing cooperation and our close economic ties,
the new Convention is the first U.S. tax treaty to eliminate in certain cases the withholding tax on
dividends. By eliminating this tax, the new Convention will encourage cross-border investment
and foster still-closer economic ties between our two great nations."
Diplomatic notes interpreting a number of provisions of the new Convention were
exchanged at the time of signing. The proposed Convention is subject to ratification in
accordance with the procedures of each country. In the United States, this requires that the signed
treaty be transmitted to the Senate for its advice and consent to ratification.
The new agreement generally will modernize the bilateral relationship, with an emphasis
on the treatment of cross-border investment and the tax treatment of pension contributions.
The most significant changes from the existing Convention deal with the treatment of .
cross-border dividends. Under the proposed Convention, most dividends received by a company
in one country from its subsidiary in the other country will be exempt from tax in the
subsidiary's home country. The existing Convention allows the source country to impose
withholding tax on such dividends at a maximum rate of 5%.
PO-503

For pressteleases, speeches, pUbltc schedules ami official biographies, call our 24.J!our fax line at (202) 622-2040

This is the first u.s. income tax treaty to provide a zero rate of withholding tax on
dividends from subsidiaries. In addition, the treaty provides a zero rate of withholding tax on
dividends received by qualifying pension funds. The treaty also eliminates several provisions of
the existing treaty that dealt with the recently-repealed U.K. Advance Corporation Tax and
therefore are no longer necessary.
The new treaty contains provisions dealing with cross-border contributions to pension
plans and the taxation of gain upon the exercise of stock options that are designed to eliminate
some of the tax barriers that might otherwise discourage executives and other workers from
accepting overseas assignments. In addition to the standard provisions that are in many of our
treaties, the new treaty will be the first to allow U.S. citizens resident in another country to
deduct, for U.S. tax purposes, contributions made to a foreign pension plan. These provisions
relating to pensions and options represent a recognition of the increasing frequency with which
executives and other employees move between countries during their careers.

Copies of the new convention and the exchange of notes are available on the Internet at
www.treas.gov/taxpolicy/library!uktreaty.pdfand www.treas.gov/taxpolicy/library/uknotes.pdf
respectively, or from the Office of Public Affairs, Treasl!TY Department, Room 2321,
Washington, D.C. 20220.
-30-

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
July 25, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:

3 7/8%
S-2003
9128277A4
High Yield:

Issue Date:
Dated Date:
Maturity Date:
3.965%

Price:

July 31, 2001
July 31, 2001
July 31, 2003

99.829

All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 45.37%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Competitive
Noncompetitive

Tendered
$

1,0~4,587

4,000,000

Federal Reserve
$

33,505,862

10,915,461
1,084,587
12,000,048 1/

29,505,862

SUBTOTAL

TOTAL

28,421,275

Accepted

16,000,048

Median yield
3.940%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
3.900%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 29,505,862 / 12,000,048 = 2.46
NO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
MINIMUM IS $1,000.
1/ Awards to TREASURY DIRECT

$888,198,000

http://www.publicdebt.treas.gov

PO-504

THE STRIPS

U EPA R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

EMBARGOED UNTIL 10:00 A.M.
July 26, 2001

Contact: Tony Fratto
(202) 622-2960

DEPOSIT INSURANCE REFORM TESTIMONY OF SHEILA C. BAIR ASSISTANT
SECRETARY FOR FINANCIAL INSTITUTIONS
U.S. DEPARTMENT OF THE TREASURY
BEFORE THE SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND CONSUMER
CREDIT COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF
REPRESENTATIVES

Mr. Chainnan, Congresswoman Waters, and Members of the Subcommittee, I appreciate
the opportunity to comment on the Federal Deposit Insurance Corporation's recent paper
recommending refonn ofthe deposit insurance system. The FDIC staff and fonner Chainnan
Donna Tanoue should be commended for initiating the policy discussion of deposit insurance
refonn. The FDIC staff report is a thoughtful document that provides a useful starting point for
this important review.

We are also grateful for the Subcommittee's initiative in holding a series of hearings on
the FDIC's report. The Treasury Department has a substantial interest in this issue as we have a
critical role to play in deposit insurance. The deposit insurance funds have authority to borrow
up to $30 billion from the U.S. Treasury. In addition, Congress has assigned to the Secretary of
the Treasury the responsibility for detennining, upon the recommendation of the FDIC Board
and the Federal Reserve Board and in consultation with the President, whether the resolution of a
failed bank poses a systemic risk to the financial system. Our comments, at this time, are general
in nature, focusing on the key policy issues raised in the FDIC paper. We look forward to
working with the Subcommittee on the details of implementing refonns in the near future.
We are in general agreement with the FDIC report on three points. First, the potential
pro-cyclical effects of deposit insurance pricing and reserving should be reduced; reserves should
be allowed to grow when conditions are good in order to better absorb losses under adverse
conditions without sharp increases in premiums. Second, all insured depository institutions
should pay premiums on current deposits, with potential rebates taking into account each
institution's recent history of premium payments. Third, the bank and thrift insurance funds
should be merged.
PO-50S

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

However, we have different views in two areas. First, we would give priority to refonns
that would charge every institution a premium on current deposits that is relatively stable over
time, and we would prefer not to extend the complexity of the risk-based premium structure at
this stage. Second, the deposit insurance coverage level should remain unchanged.

Reducing the Pro-cyclical Effects of Deposit Insurance Pricing and Reserve Policies
The potential pro-cyclical effects of deposit insurance pricing and reserving should be
reduced; reserves should be allowed to grow when conditions are good in order to better absorb
losses under adverse conditions without sharp increases in premiums. The existing designated
reserve ratio of 1.25 percent of reserves to insured deposits was historically derived roughly as
the average reserve ratio over part of the FDIC's history. As such, it is reasonable to first ask
whether it is representative of the FDIC's current and prospective risks.
The refonns that the Congress adopted in the late 1980s and early 1990s have in
important ways served to protect taxpayers and should in principle have reduced the FDIC's loss
exposure. Congress required the FDIC to maintain reserves equal to 1.25 percent of insured
deposits and, if losses cause the fund to fall below that target, to assess the banking industry
whatever is necessary to replenish reserves. Furthennore, refonns that raised bank capital
requirements, mandated supervisors to take prompt corrective action when a bank becomes
troubled, and required the FDIC to resolve failures in the least costly manner all have served to
reduce the risk of loss to the insurance funds. While these refonns have likely lowered the
FDIC's risks, they have not yet been tested in a severe adverse environment.
It should also be noted that some trends during the past decade have probably
increased certain risks that the FDIC faces. Banking industry consolidation has increased
the probability that reserves could be depleted by the failure of a few very large banks.
And increased industry dependence on secured borrowings in recent years may also
reduce the FDIC's ability to recover funds from a failed bank.
Even if the current designated reserve ratio is retained, it should be noted that it
was originally based on the average reserve ratio over some historical period. Thus it is
logical to provide for reserve growth above that level when conditions are good (and for
reserves to decline below that level when conditions are unfavorable).
Allowing growth above a designated reserve ratio in good times, or growth within a wide
range, would not only afford greater room for the insurance fund to handle bank failures without
exhausting its resources, but it would allow for more stable premiums that would smooth over
time the costs borne by the industry. The FDIC would be better able to avoid imposing sharp
premium increases on the industry, which could have a counterproductive pro-cyclical effect
when the economy is under stress.
In this context, the Treasury believes that it would be appropriate to eliminate the
existing requirement that premiums rise to a minimum of 23 cents per $100 of domestic deposits
when the fund is expected to fall short of the designated reserve ratio for more than a year.

The FDIC's recommendations suggest two ways to mitigate the pro-cyclical effects of
deposit insurance pricing: (1) allow the reserve ratio to fluctuate within a (relatively narrow)
range, within which premiums would not change; and (2) whether or not a range is established,
allow for surcharges or rebates that are designed to bring reserves back to the designated reserve
ratio - or back within the target range - gradually over a period of years. The FDIC's suggested
range (only 10 basis points above or below the designated reserve ratio) is quite narrow, and we
believe that a much wider range would more effectively smooth premium expenses over time.
Furthermore, the FDIC Board should have some discretion to adjust the range within which the
reserve ratio may fluctuate in response to changes in industry risks and conditions.
While we believe that premiums should be structured to limit pro-cyclical effects,
designing potential means to accomplish this will be a challenge. Even with an ample range
within which the reserve ratio can fluctuate, the existence of a target ceiling and floor on
reserves, in itself, imposes a pro-cyclical bias in pricing - due to the necessity that some
surcharge would have to apply when reserves fall below the floor. To offset this pro-cyclical
bias, it may be necessary to give the FDIC Board discretion to modulate increases in premiums
in some manner consistent with the overall health ofthe banking industry. Considerable
attention will be required to develop practical formulas to achieve the desired counter-cyclical
effects.

Charging All Institutions a Premium Based on Current Deposits
All insured depository institutions should pay premiums on current deposits, with
potential rebates taking into account each institution's recent history ofpremium payments.
Banks and thrifts benefit every day from deposit insurance, and they should compensate the
FDIC for that benefit, preferably through relatively small, steady premiums. Most banks and
thrifts now pay no premiums for deposit insurance, which creates incentives to increase deposits
and thus raises the FDIC's uncompensated risk exposure.
The FDIC's existing capacity to absorb losses comes primarily from the high premiums
paid by institutions in the first half of the 1990s. More recently, some institutions have been able
to rapidly increase their reliance on insured deposits without providing any compensation to the
FDIC. In addition, hundreds of other banks and thrifts chartered within the past few years have
never paid deposit insurance premiums.
A deposit insurance system where all banks and thrifts pay modest premiums could still
allow for rebates when reserves grow beyond some upper bound. If such a system were
designed, we would agree with the FDIC staffs suggestion that any rebates be based on each
bank's past contributions to the insurance fund. In addition, having premiums based on current
deposits combined with rebates based on past contributions would over time require
proportionally greater net payments from institutions with rapidly increasing deposits than from
institutions with deposits growing more slowly or declining.

While we agree with the FDIC staff report to this point, the FDIC goes further in
advocating a substantial refinement of the current system of risk-based premiums. In fact, a
revised risk-based premium structure is central to the FDIC proposal.
Although the idea of risk-based premiums has conceptual appeal, we would give priority
to reforms that would charge every institution a premium on current deposits that is relatively
stable over time, and we would prefer not to extend the complexity of the risk-based premium
structure at this stage. Congress authorized the FDIC in 1991 to establish risk-based premiums,
and the FDIC developed a matrix of rates that at present range from zero to 27 basis points based
on an institution's capital and supervisory rating. Statutory restraints imposed in 1996, however,
have prevented the FDIC from charging most banks and thrifts any premium.

Ideally, an institution's risk-based premium should account for the riskiness of its assets,
the structure of its liabilities, the strength of its capital base and management, and the effect that
its failure would have on insurance fund reserves. Differences in premiums between a very
healthy, low-risk bank and a weak bank may have to be quite large to have the desired behavioral
effects. Risk adjustments to premiums should also consider the interaction between risk-based
capital requirements, prompt corrective action and bank closure rules, and deposit insurance.
Given these considerations, we think that the calibration of risk-based premiums to provide the
desired incentives would prove very challenging. Thus, while the FDIC should have authority to
charge every institution a premium on current deposits that is not subject to sharp fluctuations
over time, we would recommend that any further adjustments to risk-based premium categories
and rates be pursued at a later stage.
While we recommend that all institutions pay premiums assessed on current deposits, we
also feel that it would be a missed opportunity not to consider what should constitute the
assessment base. Under the current structure, to the extent that banks are assessed at all, they are
charged only on banks' total domestic deposits. Yet, in the event of bank failure, secured
liabilities have a higher claim than domestic deposits (and the FDIC, which would assume the
claims of insured depositors) on bank assets. Thus increased reliance on secured liabilities by
depository institutions may increase the FDIC's loss exposure. The Gramm-Leach-Bliley Act,
by giving community banks broader access to Federal Home Loan Bank (FHLB) advances, has
accentuated our concerns about these potential risks. Reform efforts should consider whether the
existing assessment base should be modified to account for the effect of liability structure on
FDIC's expected losses.
Merging the Bank and Thrift Insurance Funds
The bank and thrift insurance funds should be merged. We strongly support a merger of
the bank (BIF) and thrift (SAIF) insurance funds. A larger, combined insurance fund would
have a greater ability to diversify its risks than either fund separately. It would make sense to
merge the funds while the industry is strong and while a merger would not unduly burden either
BIF or SAIF members. A merged fund would also prevent the possibility that institutions posing
similar risks could pay significantly different premiums for the same FDIC insurance, as was the
case in 1995 and 1996.

Incentives created by a premium disparity could result in a wasteful expenditure of
industry resources in order to avoid higher assessments. Finally, a merger would underscore the
fact that BIF and SAIF are already hybrid funds: each one insures the deposits of commercial
banks, savings banks, and savings associations. Indeed, commercial banks now account for over
40 percent of all SAIF-insured deposits. A merger would simply recognize the commingling of
the funds that has already taken place and that is likely to continue.
Deposit Insurance Coverage Level
The deposit insurance coverage level should remain unchanged. We see no evidence that
the current limit on deposit insurance coverage is burdensome to consumers. Nor do we see
evidence that increasing coverage across the board would enhance competition in the banking
industry. Moreover, an increase in the coverage level would increase risk to the FDIC and,
ultimately, taxpayers. Thus it would be imprudent to increase the FDIC's exposure at this time
by raising the deposit insurance limit.

Increasing the deposit insurance limit would do little for the typical saver, given that the
median deposit balance is far below the current ceiling. According to the most recent consumer
finance survey data from the Federal Reserve, only 2 percent of households with deposit
accounts held any uninsured deposits. The median income of these households was
approximately double the median income of households with deposits under $100,000. Thus,
any potential benefit from expanding deposit insurance coverage would likely accrue primarily
to upper-income individuals.
Ample opportunities already exist for savers with substantial deposits to obtain FDIC
coverage equal to several multiples of$100,000. Without much difficulty, they may place
deposits in several FDIC-insured institutions or establish accounts within the same institution
under different legal capacities that qualify for separate coverage (individual, joint, and IRA
accounts). In addition, many consumers feel completely comfortable putting substantial amounts
into uninsured but relatively safe money market mutual funds. It is not surprising, therefore, that
we have found no evidence of consumers expressing concern about the existing deposit
insurance limits.
Competition is critical to keeping banks vital and promoting consumer benefits. Since
the existing coverage limit does not appear to restrain consumer benefits, we are deeply skeptical
that an increase in the coverage level would promote competition and have a meaningful impact
on the ability of community banks to obtain funds.
To the extent that an increase in coverage does result in a conversion of uninsured
liabilities to insured deposits, the resulting financial safety net expansion would reduce
incentives for market discipline and potentially increase financial system risk. The large increase
in insurance coverage at the beginning of the 1980s was, of course, only one of several factors
leading to the subsequent savings and loan and commercial bank problems. Nonetheless, it
surely contributed to excessive risk-taking by many depository institutions that failed and raised
the ultimate cost of those failures.

Funding of Supervision Costs
In considering reform of deposit insurance pricing, it is important to recognize that a
significant portion of insurance fund expenditures is not for the resolution of failing institutions,
but for the FDIC's supervision of almost 5,600 state-chartered commercial and savings banks.
While these state banks pay fees for the fraction of supervision performed by state authorities,
they are not charged fees for the significant share of supervision that is performed by the FDIC.
National banks and savings associations, by contrast, are charged for 100 percent of their
supervision, and in addition must subsidize FDIC's costs to supervise state banks through their
contributions to the insurance funds (and the fund's earnings on those contributions). This
uneven distribution of supervision costs is a real problem that should be addressed. All of the
federal and state bank supervisory agencies should continue to have the resources necessary to
promote safety and soundness. We believe that the acc's proposal is an interesting approach
that deserves further consideration, and there may be other approaches and considerations that
should also be explored. We look forward to working with incoming FDIC Chairman Powell
and the FDIC Board to devise a solution to this problem.
Thank you for the opportunity to appear here today. I look forward to working with the
Subcommittee on these issues.

OFFICE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA. AVENUE. N.W•• WASHINGTON. D.C •• ZU:ZO. (202) 622'2'60

ElIIBAltGOElJ

~:tIa

9 ~ 00 A.H.

P'tT.BL:IC CON'l'AC'l': Office of P'iDancing

.iUly 25, 2001

202-691.-3550
XEDJ:A CON'l'AC'r;

Offi.ce

o~ ~l.ic

Af'Eairs

202-622-2960

O:c. .JUl.y 26, 2001, the Treasury vil.l buy back up to $1,000 million par

of its

out8t.&1:'dirlg'

and lIl'OVEIIIIber 2014.

ca.J.lable issues v.1th final maturity between February 2010
Treasury :reserves the right to accept less than the

axmounced amount.
'l"his c:1eb~ buyJ:)ac:k (redemption) operation will be conducted by 'lre&5ury's
Fiscal. .lIQ'clt, tl:ua Pec!aral. a.aerve Bank of ~ew York, using its Open Harket
opera.ticms 8ystem. Only institutions tha.t the Federal Reserve Bank of New
York has approved to conduct Open Harket transactions may sul:mU.~ offers on
behalf of themselves and their cus~omers. offers at the highest accepted
price fo:" a paztic:ulaz issue ma.y be accepted on a prorated basis, rounded up
to the next $1.00,000. AS a :result of this %'OImding, the 'l'%'easuzy may bu,)"
back an amount sl.ightly larger ~ the one aDnCUDCea above.
'l'his Claht buyback ope.rati0Z3. i8 governed. by the tenns and conditions set
31 CP'R Part 375 and this announcement.

forth b

The debt buyback operatio:c. regulations are available on the Bureau of
Debt's wabsi~e at www.pub~~cdebt.treas.goy.

~e ~lic

Details about the operation a.ncl each of the e1i51ible issues are given

in the atuc:hed highlights.
000

Attac:luDel3t

PO-506

For press releases. speeches, public schedules and offICial biographies, call our 24-hour flU liru at (202) 622-2040

July

~5,

2001

Par amount to be bought back •• Up to $1, 000 mil~iOZ1
Operat~OG data •••••••••••••••• JUly 26,2001
Operaticm close time.......... 11: 00 a.m. eastern daylight saving time
Settlement date ••••••••••••••• ~ly 30, 2001
KiDi.uNm par offer UIOunt ••••• $100,000
MUltiples of par ••••••••••••• $100,000
Foxmat for offers .•••• Expressed in t8l:'DlS of price per $100 of par with
three decimals. 'l'he first two decimals represent
fractional. 32~ of a dollar. The third decimal.
represents eighths of a 321id of" a dollar, and must
be a 0, 2, I., or 6.
J)eJ.ivery iAstructiODS ••••••••• ABA Ruml)er 021001208 FRB NYC/COST
Trea~

Coupon
Rate (%)
11.750
10.000
12.750
13.875
14.000
10.375
12.000
13.250
12.500
11.750

issues eligible for debt buyback operation (in

Katurity
Date
02/15/05-10
05/15/05-10
11/15/05-10
05/15/06-11
11/15/06-11
11/15/07-12
08/15/08-13
05/15/09-14
08/15/09-14
11/15/09-14

COSI:P NUml:>er

912810
912810
912810
912810
912810
912810
912810
912810
912810
912810

CK8
CP 1
CS 5

eve
CY 2

:DB 1
DF 2
DJ ,

DL 9
mr 5**
Total

Par AmoUD.t
Outstanding*
2,315
2,987
4,081
3,54.5
4,048
10,452
13,459
',481
4,781
6,006
56,155

mill~oDS):

-Par

Amouont

Privately

Beld*
1,457
1,81.1.
2,.521.

2,471
3,073
8,533
10,418
3,611
3,875
4,811
42,881

• Par amounts are as of JUly 24, 2001.

•• ~s is ~e only ca1lable security eligible for the STRIPS Program.
As of JUly 23, 2001, the par amount beld aa S~PS is $3,802 m!11icu • .
Tha difference between the par amount- outstanding a.Dd the par amount
hele! i.s the par amcnmt of these iliwes held by the Federal
Reserve System aDd Federal Goverrmaant accounts.

privat~Y'

EPA R T l\I E N T

'IREASURY

0 F

THE

T REA SUR Y

NEWS

OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

EMBARGOED UNTIL 2:30 P.M.
July 26, 2001

Contact: Tony Fratto
(202) 622-2960

STATElVIENT OF HENRIETTA HOLSMAN FORE
NOMINEE FOR DIRECTOR OF THE MINT
BEFORE THE COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS
UNITED STATES SENATE

Thank you Chairman Sarbanes, Ranking Member Gramm and Members of the
Committee on Banking, Housing and Urban Affairs. I am honored that President Bush has
nominated me to serve as Director of the Mint and I thank you for the privilege of appearing here
today. If confirmed, I will have the opportunity and the challenge to work with Treasury
Secretary Paul O'Neill and to meet his high standards for operating a world class production
facility. I will work to deliver the benefits of quality, efficiency and worker safety. President
Bush has outlined an administration that is business-like in its approach to government. That is
the approach I intend to take.
Americans have come to expect a safe and reliable currency in our pockets, in our cash
registers, in the vending machines, and in the transit fare turnstiles across our nation. Our
currency must be smart, with an electromagnetic signature; it must be durable to last through 30
years of trips to the beach, fast food counters, and through laundry machines. And our coinage
must tell the story of our nation, passing along the chronicle of our nation's rich heritage. We
have a responsibility to educate the public about their history, for it was an urgent, but not a
simple matter when the Senate and the House assembled in 1792, and set the standards for a
Mint to create the nation's coinage. The Coin Act also required the Mint to protect and account
for the nation's treasure, which it still does today. And I will have a challenge to encourage and
maintain the enthusiasm of the coin collecting community.
If confirmed, I look forward to working closely with this Committee, the Senate and with
members of the House of Representatives. I have had the pleasure of working with you before
and look forward to doing so again. I believe in the idea that every American should serve their
nation's interests and should bring with them the ideas of other arenas. For me, those arenas are
business and non-profit.
I was born in Chicago, Illinois, grew up in California, and graduated from Wellesley
College in 1970. I worked in General Services Administration and received a Masters in Public
Administration from the University of Northern Colorado. For the past 24 years I have managed
and owned a wire and metal products manufacturing company servicing the construction
industry with factories in Nevada, Arizona and California.

PO-SOl
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

From 1989-1993 I served in the U.S. Agency for International Development and was
confirmed twice by the Senate, once as Assistant Administrator for Private Enterprise and once
as Assistant Administrator for Asia. Since that time, I have served on several non-profit and
public corporate boards, traveled, and run my business. These experiences have exposed me to
different aspects of America's interests that, I believe, better prepare me for the challenge at
hand. It would be an honor to again serve in government.
Thank you, Mr. Chairman. I would be pleased to answer any questions.

-30-

EPA R T 1\;1 E N T

0 F

THE

'IREASURY

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

For Immediate Release
July 26,2001

Contact: Tara Bradshaw
(202) 622-2014

TREASURY TO MAIL OUT 8.1 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.1 million advance payment checks to
taxpayers for more than $3.4 billion in tax relief. These checks will be sent to taxpayers whose
last two digits oftheir Social Security numbers are 10-19.
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.1 million
Amount of Relief $3.4 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.9 million
Amount of Relief $3.3 billion

PO-508

For pres. releases, speeches, publtc Sehedules and official biographies, call our 24-hour fax line at (202) 622-2040

If the last two digits of your
Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 -79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

D EPA R l' MEN T

0 F

T H

TREASURY
OFFICE OF PUBLIC

A~FA.IRS

T REA SUR Y

NEWS

-~~.

e1500 PENNSYLVANIA AVENlJ£, :N.W. e WASHINGTON, D.C.e 20220. (202) 622.2960

EMBARGOED tlNTI:Ia 2; 3 0 P. H.

CONTACT:

J'uly 26, 2001

Office of Financing
202/69l.-3550

'l':REA.SURY OFFERS l.3-WEEK AND 26-WEEK BI:LllS
~e Treasury will auction two series of Treasury bills totaling
approximately $29,000 million to refund $20,015 million of publicly held
bills maturing August 2, 2001, and to raise about $8,985 million of new cash.

in addition to the public holdin~s, Federal ReserVe Banks for their own
accounts ho1d $10,775 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders in these auctions or
the 4-week hil.l auction to be held next week. Amounts awarded to these
accounts wi1l. be in addition to the offering amount.

up to $1,000 million in noncompetitive bids fram Foreign and I:nternational Monetary Authority (FI:MA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. ~he5e noncompetitive bids will have a lXmit of $200 million per
account and will be accepted in the order o£ sma11est to 1argest, up to the
aggregate award l~it of $1,000 million.
~asur,y.Direct customers have requested that we reinvest their maturing
ho1dings of approximately $1,141 million into the 13-week hi11 and $1,231
million into the 26-week bill.
~e allocation percentage applied to bids awarded at the highest discount
rate will. be rounded up to the next hundredth of a whole percentage point,
e.g ... 17.13%.

This offering of Treasury securities is governed by the ter.ms and conditions set forth in the unifor.m Offering Circular for the Sale and Issue of
Mark~table Book-Entry Treasur,y Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Deta.ils about each of the new securities are. given in the attached
offering hig~igbt5.

PO-S09

000

Attachment

For press releases, speeches, public !chedules and official biographies, call our 24-hour fax line Ilt (202) 622-2040

OF T~SURY OFPER~~GS OF BILLS
TO BE ISSUED AUGUST 2, 2001

HIGHL~GHTS

July 26, 2001
Offering Amount •.......•..••••••....•.• $15,000 million
$14,000 million
Public Offering .......•....•.••••....•• Offering ~ount less the amount awarded to FIMA accounts
Description of Offering!
Term and type of security ...•••••....••
CUSIP nUJnber . . • • • • • . . . • . . . • • • • • • • • . . . .•
Auction date .•• _ •••.... _ .••.••••••..•..
Issue date .•.••••..••••...•.•••••.....•
Maturi ty date • • • • • . . . • • • • . • • • • • • • • . . • ••
original issue date .••••.••••••••••.•••
Currently outstanding .••.••••••••..•.••
Minimum bid amount and mu1tiples ••....•

91-day hill
912795 lIU B
July 30, 2001
August 2, 2001
November 1, 200 1
May 3, 2001
$12,311 million
$1,000

182-day bill
912795 olE 2
July 30, 2001
August 2, 2001
January 31, 2002
August 2, 2001
$1,000

The following rules apply to all securities mentioned above:
Submission of Bids,
Noncompetitive bidse Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FrMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FrMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks as agenta for P2MA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggre~ate award
total to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bidsl
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%,
7.105%.
(2) Net long position for each bidder must be reported when the sum of the tota1 bid amount, at all
discount rates, and the net long position is $1 billion or greater.
(3) Net long position must be deter.mined as of one half-hour prior to the closing t~e for receipt of
competitive tenders.
Maximum Reco~nized Bid at a Sin~le Rate •••• 35% of public offering
Maximum Award .•.•.•••..••••.••••.•••••••••• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders ••• Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders •••••• Prior to 1100 p.m. eastern daylight saving time OD auction day
Payment Terms: By charge to a funds account at ~ Federal Reserve Ban~ on issue date, or payment of full
par amount with tender.
Treasu~Direct customers can use the Pay Direct feature which authorizes a charge
to their account of record at their financial institution on issue date.

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

'IREASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

FOR IMMEDIATE RELEASE
July 26, 2001

TREASURY DEBT BUYBACK OPERATION RESULTS

Today, Treasury completed a debt buyback (redemption) operation for $1,000 million
par of its outstanding callable issues. A total of 10 callable issues with final maturity
between February 2010 and November 2014 were eligible for this operation. The settlement date
for this operation will be July 30, 2001. Summary results of this operation are
presented below.
(amounts in millions)

Offers Received (Par Amount) :
Offers Accepted (Par Amount) :
Total Price Paid for Issues
(Less Accrued Interest):
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:
Weighted Average Yield to Call
of all Accepted Offers (%):
Weighted Average Maturity to Call
for all Accepted Securities (in years) :

$6,078
1,000

1,384

10
2

5.131

6.9

Details for each issue accompany this release.

PO-SIO

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

July 26, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS

(amounts in millions, prices in decimals)
Table I

Coupon
Rate (%)

Maturity
Da t e

Par
Amount
Offered

11. 750
10.000
12.750
13.875
14 .000
10.375
12.000
13.250
12.500
11. 750

2/15/05-10
5/15/05-10
11/15/05-10
5/15/06-11
11/15/06-11
11/15/07-12
8/15/08-13
5/15/09-14
8/15/09-14
11/15/09-14

206
580
299
239
360
687
1,659
568
845
635

Par
Amount
A cce12 t e d

Highest
Accepted
P r~ce
.

Weighted
Average
Accepted
Pric e

0
0
0
0
0
148
852

N/A
N/A
N/A
N/A
N/A
128.171
140.171
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
128.142
140.125
N/A
N/A
N/A

Weighted
Average
Accepted
Yield
to C'l1
a

Par Amount
Privately
Held*

°0
°

Table II

Coupon
Rate (%)

Maturity
Da t e

CUSIP
Numb er

.l1. 750
10.000
12.750
.l3.875
14.000
10.375
12.000
13.250
12.500
11. 750

2/15/05-10
5/15/05-10
11/15/05-10
5/15/06-11
11/15/06-11
11/15/07-12
8/15/08-13
5/15/09-14
8/15/09-14
11/15/09-14

912810CM8
912810CP1
912810CS5
912810CV8
912810CY2
912810DB1
912810DF2
912810DJ4
912810DL9
912810DN5

Lowest
Accepted
Yield
to Ca 1 1
N/A
N/A
N/A
N/A
N/A
5.085
5.131
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
5.090
5.138
N/A
N/A
N/A

6,078
1,000

Total Par Amount Offered:
Total Par Amount Accepted:
Note: Due to rounding, details may not add to totals.
*Amount outstanding after operation. Ca 1 cu 1 a t e d

us~ng

amounts reported on announcement.

1,457
1,811
2,821
2,471
3,073
8,385
9,566
3,611
3,875
4,811

D E P ,\ R T l\I E N T

0 F

THE

T REA SUR Y

NEWS

'IREASURY

omCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C•• 20220 • (202) 622-2960

For Immediate Release
July 26,2001

Contact: Tara Bradshaw
(202) 622-2960

TREASURY, IRS CRACK DOWN ON ANOTHER TAX SHELTER
The Treasury Department and the Internal Revenue Service today issued a notice
to shut down another tax shelter. The shelter involves a series of pre-arranged steps with
the purpose of creating an artificially high tax basis in stock, which is sold at a loss.
The Notice is another step in Treasury's efforts to address attempts to evade tax.
The Notice warns all taxpayers that engage in the transaction that the IRS intends to
challenge the asserted tax benefits. In addition, the Notice informs corporate taxpayers of
their obligation to disclose their participation in the transaction and informs promoters of
their obligation to register the transaction and keep lists of customers that engage in the
transaction.
The Treasury Department is working with the IRS, particularly the Office of Tax
Shelter Analysis, to review existing rules and procedures to ensure that all taxpayers pay
the appropriate amount of tax.

Description of transaction in the Notice:
In the type of transaction described in the Notice, a U.S. taxpayer owns stock
options to purchase 50% or more in a foreign corporation ("first corporation"). Therefore
the U.S. taxpayer and the first corporation are considered related parties for tax purposes.
The U.S. taxpayer and the first corporation each own stock in a second corporation. The
second corporation then redeems its stock held by the first corporation and the first
corporation treats the redemption as a dividend because it is related to the U.S. taxpayer.
The U.S. taxpayer claims that the first corporation's cost for the redeemed stock attaches
to the U.S. taxpayer's stock in the second corporation. Then, the U.S. taxpayer sells its
stock of the second corporation and claims a loss.

PO-sll

-30-

For press releases, speeches, public schedules and official biographies, call our 24~our fax line at (202) 622-2040
s

D E P <\ R T 1\1 E N T

0 F

THE

T REA SUR Y

NEWS
OWICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W•• WASHINGTON, D.C. - 20220 - (202) 622·2960

MEDIA ADVISORY
Contact Tony Fratto
at 202-622-2960

For Planning Purposes Only
July 27,2001
Secretary O'Neill to meet with Hispanic Business Leaders

On Monday, July 30, 2001, Treasury Secretary Paul O'Neill will meet with a group of Hispanic
business leaders for a wide-ranging discussion of economic issues affecting America's Hispanic
business community including opportunities to expand hemispheric trade.
The meeting will start at 2:00 PM and photo and video media only will have the opportunity
to cover the start of the meeting.
This opportunity is open to photographers and video crews with Treasury or White House
press credentials; those needing credentials should contact Frances Anderson in Treasury's
Office of Public Affairs (202-622-2960) to obtain clearance passes.
WHO:

Treasury Secretary Paul O'Neill
Hispanic Business Leaders

WHAT:

Roundtable Discussion
Photo Opportunity

WHEN:

Monday, July 30, 2001
2:00 - 2:10 PM

WHERE:

Main Treasury Building
1500 Pennsylvania Avenue
Secretary's Large Conference Room 3311

PO-512

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622·2040

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

'IREASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED UNTIL 2:00 P.M.
July 30, 2001

Contact: Rob Nichols
(202) 622-2910

SECRETARY OF THE TREASURY, PAUL O'NEILL, MEETS WITH HISPANIC
BUSINESS LEADERS TO DISCUSS TRADE PROMOTION AUTHORITY

Secretary of the Treasury Paul O'Neill and Ruben Barrales, Deputy Assistant to the
President and Director for Intergovernmental Affairs at the White House, today met with
Hispanic Business Leaders from throughout the US to discuss Trade Promotion Authority
and emphasize the importance this authority has on formulating any sort of comprehensive
free-trade agreements in the future.
"It is important that President Bush has this negotiating tool to show other countries that
the US is serious about pursuing free trade agreements," said O'Neill. "The Executive
Branch has not had TP A since 1994, and America's competitors have taken advantage in the
interim. The rest of the world is moving forward and signing trade deals that exclude the
United States."

O'Neill continued, "Expanded trade is essential to America's continued prosperity.
American companies lead the world, and will fmd even greater success as trade barriers are
reduced. Trade now represents more than one quarter of our economy. Millions of
Americans work in trade related jobs that pay above-average wages and America's growth
and prosperity will ultimately depend our access to the global economy."
The Hispanic business leaders come from various industries including high tech,
construction, management, investment, and manufacturing companies. Attendees include the
following individuals: Mr. Joseph Unanue, CEO, Goya Foods, Inc., Mr. Raul Romero,
President/CEO, S&B Infrastructure, Ms. Dorene Dominguez, Vanir Construction, Ms. Sherii
Sanchez, President, Acces, Inc.,Ms. Irma Elder, CEO, Elder Automotive, Ms. Teresa
McBride, CEO, McBride, Mr. Joseph Saniora, Vice-President GR, Case New Holland, Mr.
Rudy Mulder, Chairman, Urban Trust Investments, Mr. Al Cardenas, Partner, Tew,
Cardenas, Rebak, et. AI, and Mr. Raul Fernandez, CEO, Proxicom.
-30-

PO-513
For preA releases, speeches, publiC ;y,,*edules and official biographies, call our 24-hour fax line at (202) 622-2040

D E P ,\ R T 'I E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIDNGTON, D.C.• 20220. (202) 622-2960

* * * URGENT * * *
Secretary Paul O'Neill will make comments for the record at
the top of his meeting with Hispanic business leaders this
afternoon.
Please note the change in planning for this meeting.
The first ten minutes of the meeting with Hispanic business
leaders will be OPEN PRESS.
WHO:

Treasury Secretary Paul O'Neill
Hispanic Business Leaders

WHAT:

Roundtable Discussion
OPEN PRESS AT THE TOP

WHEN:

Monday, July 30,2001
2:00 - 2:10 PM

WHERE: Main Treasury Building
1500 Pennsylvania Avenue
Secretary's Large Conference Room

PO-S14

Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

EPA R T l\l E N T

'IREASURY

0 F

THE

T REA SUR Y

NEWS

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGO HASTA LAS 2:00 P.M.
Julio 30, 2001

Contacto: Noe Garica III
(202) 622-2960

. EI Secretario del Tesoro, Paul O'Neill, se Reune con Lfderes Hispanos para Discutir la
Autondad para la Promoci6n del Comercio
".EI Poder Ejecutivo no ha tenido autoridad para promover el comercio desde 1994, y nuestros
se han aprovechado. Si el Presidente Bush recibe autorizacion para promover el
comerCIO, entonces podra negociar tratados de libre comercio y abrir mas mercados, creando
empleos adicionales y estimulando el crecimiento economico del pais. Esto permitira que la gente de
los Estados Unidos y de otros paises tenga una mejor calidad de vida para ellos y sus familias".
compet~dores

EI Secretario del Tesoro, Paul O'Neill y Ruben Barrales, Asistente del Presidente y Director de
Asuntos Intergubernamentales de la Cas a Blanca, se reunieron con los Ifderes de la comunidad
Hispana de negocios de todo el pais para discutir la Autoridad para la Promocion del Comercio y
enfatizar la importancia que tiene esta autoridad para formular acuerdos globales de libre comercio.
"Es importante que el Presidente Bush disponga de esta herramienta de negociacion para
demostrar a los otros paises que los Estados Unidos buscara formalmente concertar acuerdos de
Iibre comercio. EI Poder Ejecutivo no ha tenido autoridad para promover el comercio desde 1994, y
entre tanto, los competidores de los Estados Unidos han tomado ventaja. EI resto del mundo
continua avanzando al firmar acuerdos comerciales que excluyen a los Estados Unidos".
"La gente de los Estados Unidos deberfa saber que el comercio internacional ahora
representa mas de una cuarta parte de nuestra economfa, y que el comercio internacional creo
millones de empleos que pagan salarios superiores al promedio; y que el crecirniento y la
prosperidad de America dependeran finalmente de nuestra habilidad para competir en la economfa
global
Los Ifderes de los negocios Hispahos provienen de varias industrias, tales como alta
:ecnologfa, construcci6n, servicios, inversiones, y compafiias manufactureras. Los asistentes fueron,
:mtre otros: Mr. Joseph Unanue, CEO, Goya Foods, Inc., Mr. Raul Romero, President/CEO, S&B
nfrastructure, Ms. Dorene Dominguez, Vanir Construction, Ms. Sherii Sanchez, President, Acces,
nC.,Ms. Irma Elder, CEO, Elder Automotive, Ms. Teresa McBride, CEO, McBride, Mr. Joseph
3amora, Vice-President GR, Case New Holland, Mr. Rudy Mulder, Chairman, Urban Trust
nvestments, Mr. AI Cardenas, Partner, Tew, Cardenas, Rebak, et. AI, and Mr. Raul Fernandez,
CEO, Proxicom.

PO-SIS

Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

D EPA R T [\[ E N T

0 F

THE

T REA SUR Y

NEWS

'IREASURY

OFnCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

CONTACT: Tony Fratto
(202) 622-2960

EMBARGOED UNTIL 3:00 P.M.
July 30, 2001

TREASURY ANNOUNCES MARKET FINANCING ESTIMATES
The Treasury Department announced today that it expects to borrow
$51 billion in marketable debt during the July - September 2001 quarter and
to target a cash balance of $55 billion on September 30. This includes a
borrowing of $61 billion in marketable Treasury securities and the buyback
of an estimated $9 Yz billion in outstanding marketable Treasury securities.
In the quarterly announcement on April 30, 2001, Treasury announced that it
expected to pay down a total of $57 billion in marketable debt and to target
an end-of-quarter cash balance of $60 billion. The change in borrowing
reflects a number of factors, most significantly the shift in the September 15
corporate tax due date to October 1 and the need to finance in this quarter
the tax rebates.
The Treasury also announced that it expects to pay down $36 billion
in marketable debt during the October - December 2001 quarter and to
target a cash balance of $30 billion on December 31.
During the April- June 2001 quarter, the Treasury paid down $163
billion in marketable debt, including the buyback of $9 ~ billion in
outstanding marketable securities, and ended with a cash balance of $44
billion on June 30. On April 30, the Treasury announced that it expected to
pay down $187 billion in marketable debt and to target an end-of-quarter
cash balance of $60 billion. The increase in the borrowing was the result of
a shortfall in receipts and lower issues of State and Local Government Series
securities.
The Quarterly Refunding Press Conference will be held at 9:00 A.M.
on Wednesday, August 1, 2001.
-30PO-516
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lRFASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED 'ONTIL 11::3 0 A. M.
July 30, 2001

Contact:

Office of Financing

202/691-3550

TREASURY OFFERS 4-WEEX BILLS

The Treasury will auction approxfmately $10,000 million of 4-week bills
to be issued August 2, 2001.
Tenders for bills to be held on the book-entry records of TreasuryDirect
will not be accepted.
Federal Reserve Banks for their own accounts hold $10,775 million of bills
maturing August 2, 2001, which may be refunded at the highest diSdount rate of
accepted competitive tenders. These accounts may be awarded 4-week bills in an
amount up to the remaining balance of the $10,775 million not refunded in
today's 13- and 26-week bill auctions. Amounts awarded to these accounts will
be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FIMA) accounts bidding through the Federal Reserve Bank of
New York will be included wiehin the offering amount of the auction. These
noncompetitive bids will have a l~t of $200 million per account and will be
accepted in the order of smallest to largest, up to the aggregate award l~t
of $1,000 million.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: CompetitiYe bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold. However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Bntry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Details about the new security are giyen in the attached offering
highlights.

PO-517
Attachment

000

For press releases, speeches, public schedules and offlclill blographies, cllll OUT 24-hour /flX line III (202) 622-2040

HIGRLIGBTS OF TRKASURY OI'FBlUNG
OF 4-WEEK BILLS TO BE ISSUED AUGUST 2, 2001
July 30, 2001
Offering Amount ••.••.•.•.•.••.....• $10,000 million
Public Offering .••••.•...••••..•..• Offering amount less the amount
awarded to F~ ~ccounts
Description of Offering;
Term. and type of security
28-day bill
CUSIP number ••.•.•.••....•••.•.••.• 912795 m.. 8
Auction date ...................... . July 31, 2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . August 2, 2001
Maturity date •••••••••.•••••••••••• August 30, 2001
Original issue date •••••••••••••••• August 31, 2000
CUrrently outstanding •••••••••••••• $41,511 million
Minimum bid amount and multiples
$1,000

..........

Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 ~llion at the highest
discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FDIA) bids: Noncompetitive bids submitted through the Federal Reserve Banks as agents for
FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. ~he total noncompetitive amount awarded to Federal Reserve Banks as agent. for
FD!A accounts will llOt exceed $1,000 million. A &iAgle bid that
would cause the limit to be exceeded will be partially accepted in
the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal
amounts that would cause the limit to be exceeded, each will be
prorated to avoid exceeding the limit.
Competitive bids:
(~) MUst be expressed as a discount rate with three dec~ls in
increments of .005%, e.g., 4.215%.
(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 $1 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.
Max~

Recognized Bid at a Single Rate ••• 35% of public offering
Maximum Award •..•.....•.••..••.•.••...•...• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving ttme on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank
on issue date, or payment of full par amount with tender.

D EPA R T 1\1 E N T

0 F

THE

T REA SUR Y

NEWS
OWICE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C •• 20220 • (202) 622-2960

Text as Prepared for Delivery
July 31, 2001

Contact: Tony Fratto
(202) 622-2960

ACTING DIRECTOR OF THE OFFICE OF MACROECONOMIC ANALYSIS
KAREN HENDERSHOT
REMARKS TO THE TREASURY BORROWING ADVISORY COMMITTEE
OF THE BOND MARKET ASSOCIATION

At the time of the last meeting of the Committee, the economy was experiencing a clear
slowdown. A dichotomy had emerged between the consumer sector, where spending was wellmaintained, and the business sector, where investment was faltering. The configuration of
activity three months later remains similar but significant additional softening has developed in
the business sector. Even so, some signs suggesting a brighter outlook have also become
apparent.
Most of the recent summary measures of economic activity have signaled weakness.
Among these developments was the release last Friday of the regular annual recalculation of the
national income and product accounts. These revisions, reflecting the incorporation of new
source data and some improvements in methodology, somewhat recast the features of the socalled "new economy." Real GDP growth during 1998 was revised up a little but growth for
1999 and 2000, measured fourth quarter to fourth quarter, was marked down to 4.4 percent and
2.8 percent, respectively -- both 0.6 percentage point less than previously reported. Most of the
reduction reflected a sharp downward revision to business investment. Despite the revisions, the
economic record remains impressive. Real GDP growth during the five years from 1995 through
2000 was reduced only marginally from 4.3 percent to 4.1 percent- a still commendable
performance for the late stages of an expansion.
But the downshift in activity since the middle of last year has been dramatic.
Real GDP growth has slowed to just over 1 percent during the year ended in the second quarter,
from more than 5 percent during the same year-earlier period. The advance estimate for the
second quarter indicates real growth at an annual rate of only 0.7 percent, down from 1.3 percent
in the first quarter and the weakest in more than eight years.
The composition of growth in the second quarter also deteriorated relative to the first. In
the first quarter, a steep negative swing in inventory investment deducted 2.6 percentage points
from the real GDP gain but final sales of domestic product (GDP excluding inventories - a
measure of underlying demand) soared at a 4.0 percent annual rate.

PO-SIS
For press rflk,a~ speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

2
In the second quarter, by contrast, inventories were relatively neutral but real final sales
edged up at only a 0.7 percent pace. Private final demand slipped even further, with no growth
at all in the second quarter.
While all elements of private final demand softened somewhat in the second quarter, the
critical household sector held up reasonably well. Consumer spending (two-thirds of GDP) grew
moderately, at just above a 2 percent annual rate. Residential investment remained quite strong,
and has maintained a healthy 8 percent pace of growth so far this year. Foreign trade is
estimated to have been a mildly negative factor in the second quarter but the most precipitous
downshift was in capital spending. Business fixed investment plunged at a 13.6 percent annual
rate, paring almost 2 percentage points from real GDP growth and leaving a high backlog of
capital goods inventories. This contrasts with the previous five years, during which investment
contributed an average of 1-114 percentage point to real GDP growth annually. Investment had
not fallen so much in one quarter since 1982.
The withering of capital investment reflects a combination of developments. Excess
capacity, resulting in some cases from overinvestment but in others from the current weakened
demand, was one factor. In addition, a widespread profit squeeze caused not only investment
plans to be slashed but also private payrolls to be cut by 350,000 workers during the second
quarter.
The above summary, describing a somewhat more fragile economy than might be
desired, reflects past developments. While the risk remains that additional layoffs could
eventually impede what now appears to be moderate growth in the household sector, more
forward-looking indicators provide some basis for optimism.
•

Consumer confidence and the composite index of the National Association of Purchasing
Management have risen slightly over the past few months and at a minimum appear to
have stabilized. These were the measures of economic activity that last winter provided
the earliest warning of a stark reduction in demand growth.

•

Initial claims for state unemployment insurance benefits have plunged by 70,000 from
their June highs. Some portion of the decline may be attributable to difficulties in
seasonal adjustment around the July auto industry shutdown, but claims at least seem to
have halted their climb.

•

Although manufacturing and to a lesser degree wholesale trade still have a significant
inventory overhang, the inventory adjustment at the retail level appears to be virtually
complete.

•

Finally, the index of leading indicators has now risen three months in a row through June
- the strongest performance in a year and a half.

At a time when the economy already appears poised to regain its footing, several
important factors are aligned to support it going forward.

3
•

The $38 billion in tax rebate checks now being sent out, combined with tax rate
reductions, could lift consumers' real after-tax income by close to 9 percent at an annual
rate in the third quarter. Although considerable uncertainty surrounds the impact on
consumer spending behavior of this injection of income, our estimates suggest that real
GDP growth during the second half of the year could be raised by more than 1 percentage
point at an annual rate.

•

The 275 basis points of monetary stimulus administered in the first half of this year was
heavily front-loaded, with more than half that reduction achieved by late March. Its
impact should soon become apparent, boosting demand as well as easing interest cost
pressures on corporations.

•

Lower energy prices will also be a positive factor, both for households and business.
While OPEC's efforts to sustain petroleum prices have dominated recent news, the
20 percent drop in the price of crude oil and the near 60 percent fall in natural gas prices
since last winter represent huge reductions that are unlikely to be reversed significantly in
the near term.

•

In addition, the Employment Cost Index indicates that wage pressures are also easing.
Private compensation costs have receded from annual growth of 4.6 percent a year ago to
4.0 percent during the latest four quarters - another factor favoring the rebuilding of
corporate profit margins.

Overall, while we cannot dismiss uncertainties about the progression of recovery in the
business sector, it seems plausible that the worst of the slowdown may be behind us. The July
Blue Chip private consensus forecast estimates real growth of 3 percent in the fourth quarter. At
this point, there is little reason to believe that forecast would be far offthe mark.
That is the current summary of recent economic developments and the near-term
economic outlook.

-30-

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
July 30, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Nwnber:

91-Day Bill
August 02, 2001
November 01, 2001
912795HU8

High Rate:

3.480%

Investment Rate 1/:

3.561%

Price:

99.120

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 51.42%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Accepted

Tendered

Competitive
Noncompetitive,
FIMA (noncompetitive)

32,192,215
1,515,760
290,000

15,000,291 21

33,997,975

SUBTOTAL

TOTAL

3,396,647

Federal Reserve
$

37,394,622

13,194,531
1,515,760
290,000

18,396,938

Median rate
3.460%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low raLe
3.430%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

= 33,997,975

I 15,000,291

= 2.27

1/ Equivalent coupon-issue yield.
21 Awards to TREASURY DIRECT = $1,238,570,000

http://www.publicdebt.treas.gov

PO-S19

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
July 30, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:

182-Day Bill
August 02, 2001
January 31, 2002
912795JE2

High Rate:

3.380%

Investment Rate 1/:

3.487%

Price:

98.291

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 53.28%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

29,971,367
1,631,241
130,000

SUBTOTAL

31,732,608

Federal Reserve

4,688,923

TOTAL

36,421,531

Accepted
$

12,238,791
1,631,241

13o,obo
14,000,032 2/
4,688,923
$

18,688,955

Median rate
3.360%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.320%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

31,732,608 / 14,000,032

2.27

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,315,079,000

http://www.publicdebt.treas.gov

PO-520

D E P ,\ R T 1\1 E N T

'IREASURY

0 F

T 1-1 E

T REA SUR Y

NEWS

omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

Embargoed Until 10:00 a.m.
July 31, 2001

Contact: Tony Fratto
(202) 622-2960

STATEMENT OF ROBERT C. BONNER
NOMINEE FOR COMMISSIONER OF THE U.S. CUSTOMS SERVICE
BEFORE THE COMMITTEE ON FINANCE
UNITED STATES SENATE

Chairman Baucus, Senator Grassley, and members of the Committee, I am delighted to
appear before you today to discuss my nomination to be the Commissioner of the United States
Customs Service.
Before I begin my statement, I would like to acknowledge and introduce my wife,
Kimiko. Without her love and her unwavering support and assistance throughout my career, I
can assure you that I would not be here today. I also am delighted that my daughter, Justine
Bonner, the light of my life, could be here today. Justine is doing important public service in her
own right. She is a schoolteacher, teaching American History to eighth graders in New York City
at an alternative school in lower Manhattan.
I want to express my appreciation to President Bush for nominating me to head the
United States Customs Service. I also want to thank Secretary O'Neill for his support and
confidence in me. I look forward to working with the outstanding team he has assembled at the
Treasury Department, including the Deputy Secretary-Designate Ken Dam and the Under
Secretary for Enforcement-Designate Jimmy Gurule.
I come before you today as someone who has spent one-half of my 35-year professional
career in public service, and one-half in the private sector - in the private practice of the law. I
have had the good fortune to serve our government in a number of important posts, including
over five years as the United States Attorney for the Central District of California, managing and
heading the second largest U.S. Attorney's Office in the country. For nearly three and one-half
years, I was the Administrator of the Drug Enforcement Administration (DEA). In between these
two positions, I served as a United States District Judge in Los Angeles. My experience
managing the DEA and the United States Attorney's Office has provided me with experience that
will be of considerable benefit to me in leading Customs.
I am enthused about the prospect of heading the U.S. Customs Service, an agency with a
mission of great importance to our nation, its people, and its commerce. During my career, I have
worked side-by-side with the Customs Service, both as a federal prosecutor and as the DEA
Administrator. The dedication and commitment of the men and women of the U.S. Customs
Service have consistently impressed me. Indeed, the United States Customs Service is, and
should bel an international leader in terms of professionalism, personnel and technology.

PO-521

For press rellJtUU, 5peBelH6, puhlic.schedules and official biographies, call our 24-hour fax line at (202) 62f -2040

In my view, the next Commissioner of Customs must emphasize both the trade and the
enforcement sides of the Customs Service, and this means striking the right balance between
these two important missions of Customs. Effective enforcement of our drug, trade, and antismuggling laws and protection of our borders are, of course, a fundamental obligation of Customs
- and, indeed, they are a core governmental responsibility of the federal government. This
responsibility must not overshadow Customs' important role in facilitating trade and working
with the trade industry to make Customs more efficient.
I believe an appropriate balance can be achieved through better identification of risks and
better allocation of resources to meet those risks. Automated Commercial Environment (ACE)
and reforms of the ways that Customs does business will also be important to achieving this
balance. One of my highest priorities as Commissioner will be the successful and timely design,
implementation and funding of ACE. Other priorities will be to meet the explosive growth in
international trade as well as the law enforcement challenges of drug trafficking, money
laundering, international terrorism, counterfeit goods, cybercrime and protection of our borders.
I am excited about the opportunity to return to public service as the head of United States
Customs Service, and, if confirmed, I look forward to working closely with the members of this
Committee and Congress to meet the challenges facing Customs.
Thank you. I would be happy to answer any questions you might have.

DEPARTMENT

'IREASURY

THE

TREASURY

NEWS

OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960

Embargoed Until 10:00 a.m.
July 31, 2001

Contact: Tony Fratto
(202) 622-2960

STATEMENT OF ROSARIO MARIN
NOMINEE FOR UNITED STATES TREASURER
BEFORE THE COMMITTEE ON FINANCE
UNITED STATES SENATE

Thank you. Chainnan Baucus, Ranking Member Grassley, and Members of the Committee
on Finance, I am honored to appear before you today.
President Bush has bestowed upon me a great honor by nominating me to serve as Treasurer
of the United States. If confinned, I look forward to working closely with this Committee, the
Senate, and with members of the House of Representatives on issues related to the Office of the
Treasurer.
I would like to express my great appreciation for this fine nation, where one of its
immigrants can be considered for such a distinguished post as United States Treasurer.
Before proceeding any further, I would like to take this opportunity to thank my family.
God blessed me with a wonderful set of parents, Mariano and Carmen Spindola, whose work ethic
and faith have been the foundation of my life. My brothers Fernando, Mariano and Daniel, and my
sisters Margarita and Nancy all of whom have always been supportive. The love of my life Alex, a
husband second to none who is with me here today; and three beautiful children Eric, Cannen and
Alex, who by the wisdom of God, have filled my life with joy and inspiration.
I ask the committee to indulge me in a very personal and very emotional effort to try to
express my deep personal gratitude to this remarkably generous country.
When I came from Mexico at age 14, I did not speak English. I was frightened. After
finishing high school, I had to work to help my family. I went to college at night and seven years
later; I graduated from California State University in Los Angeles. I worked for two banking
institutions for a total of seven years. I was going to be named Assistant Vice President for City
National Bank, when, suddenly my life changed. I gave birth to my son Eric, now a handsome
young man with Down Syndrome. Accepting that my financial career was on hold at that time, I
dedicated my life to my new found treasure, people with disabilities and their families.
If confirn1ed, I look forward to returning to issues relating to our nation's money and, more
specifically, having oversight of its production and safekeeping.
PO-522

Far press re~~ speeches. public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Mr. Chairman and members of the committee, I am deeply honored to be considered for the
privilege to serve our country in this capacity. I would like to thank President Bush and Secretary
O'Neill for the confidence they have shown in me, and I will work to earn your confidence. I am of
the belief that "Of him to whom much is given, much is expected". America has given me so much.
I promise to work diligently with this committee on all matters that you may wish to raise with the
Office of the Treasurer. I hope that this will be the beginning of a fine working relationship.
Thank you for your time, I would be pleased to answer any questions.

D E P :-\ R T \1 E N T

0 F

THE

T REA SUR Y

NEWS
OFHCE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C•• 20220. (202) 622.2960

EMBAROGED UNTIL 2:00 P.M.
July 31, 2001

Contact: Tony Fratto
(202) 622-2960

STATEMENT OF CAROLE L. BROOKINS
NOMINEE FOR UNITED STATES EXECUTIVE DIRECTOR OF THE
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
BEFORE THE COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
Mr. Chairman and Members of the Committee, I am grateful for this opportunity
to appear before you today.

I would like to first thank President Bush for the honor of my nomination a~ U.S.
Executive Director to the International Bank for Reconstruction and Development. In his
speech at the World Bank on July 17, President Bush said "our... goal must be to work in
true partnership with developing countries to remove the huge obstacles to development."
I share the President's commitment and understand the important role of the World Bank
in supporting this goal of raising living standards for nations and individuals.
If confirmed, it will be a great privilege to represent the United States on the
World Bank's Board. I especially welcome the opportunity to work with Secretary
O'Neill and the Treasury Department to improve the World Bank's effectiveness and
impact. America's prosperity is tied to the growth and prosperity of the developing
world.
My professional life has focused directly and indirectly on the factors affecting
the performance of developing countries. My career began as a municipal bond
underwriter, financing critical infrastructure that supports our national economy at the
local and state levels. I moved to the commodity field in 1972, and have analyzed
commodity policies, markets and trade since that time, particularly the area of
agriculture. As you well know, agricultural productivity is a foundation of economic
development. Today, nearly 75% of the poorest families in developing countries live in
rural areas; the income gap between urban and rural people is widening, not shrinking.
PO-523

For press reletJ,sQ.5jJeeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Since starting my own business in 1980, I have learned many lessons about what
it takes for an individual in the private sector to produce income and keep a business
running. I have had enonnously meaningful travel to every continent, to experience the
way different cultures and economies function and trade, and to interact frequently with
both private and public sector officials on issues that affect growth.
The United States holds a unique place of leadership in The World Bank, as its
largest shareholder. If confinned, I will look forward to building a strong working
relationship with this Committee and the leadership you bring in support of the Bank's
mission. I sincerely hope to commit my fullest energy and experience toward our shared
objective of reducing poverty and improving living standards in the developing world.
Thank you, Mr. Chainnan. 1'd be happy to answer any questions.

-30-

D E P .\ R T \1 E N T

0 F

THE

T REA SUR Y

NEWS
omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960

EMBARGOED UNTIL 2:00 P.M.
July 31, 2001

Contact: Tony Fratto
(202) 622-2960

STATEMENT OF RANDAL K. QUARLES NOMINEE FOR UNITED STATES
EXECUTIVE DIRECTOR OF THE INTERNATIONAL MONETARY FUND
BEFORE THE COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE

Thank you, Mr. Chainnan and members of the Committee, for the opportunity to
appear before you today. I am honored that President Bush has nominated me to serve
as the U.S. Executive Director of the International Monetary Fund, and I am grateful to
have the privilege of your consideration. With the Committee's indulgence, I would like
to introduce the members of my family that are here.
The International Monetary Fund exists to promote international macroeconomic
stability, to foster economic growth, to detect critical problems in the international
financial system, and, in appropriate cases, to help deal with those problems as soon as
they are detected. The role of the U.S. Executive Director is to use the voice and vote of
the United States on the Fund's executive board to help shape the Fund's pursuit of
those objectives in a manner consistent with U.S. interests.
If confinned, I would bring to this role a variety of experiences in both
government and the private sector. Though raised in Utah, and a passionate westerner, I
have for nearly seventeen years been a practicing Wall Street lawyer, focusing on
international banking and financial matters. I have been privileged, particularly during
the last decade, to help some of the world's premier financial institutions think through
their approach to an increasingly integrated financial system and to take practical steps
to prepare for that integration. I was also privileged to serve in the Treasury Department
from 1991 to 1993, working with the team that helped propose a modem statutory
framework for this ongoing financial integration - - work that we like to think
contributed to the financial modernization legislation enacted into law a little over a year
ago.
If confinned, I would hope to approach my role with the benefit of all these
experiences: the practical wisdom of a good counselor, the policy experience of an
enthusiastic public servant and, not least, the common sense I have always found native
in those born west of the lOOth meridian and raised in the shadow of the Wasatch
Mountains.
PO-524

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Thank you again Mr. Chairman for the privilege of appearing before this
Committee. I would be pleased to answer any questions you and the other members of
the Committee may have.

-30-

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lRFASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

u.s. International Reserve Position

7/31/01

The Treasury Department today released US. reserve assets data forthe week ending July 27, 2001. As indicated in this
table, US. reserve assets totaled $66,191 million as of July 27,2001, up from $66,175 million as of
July 20,2001.
(in US millions)

I. Official U.S. Reserve Assets
TOTAL
1. Foreign Currency Reserves
a. Securities

Euro

July 20, 2001

July 27, 2001

66,175

66,191

Yen

Euro

TOTAL

Yen

TOTAL

5,252

10,728

15,979
0

5,282

10,690

15,972
0

8,874

4,645

13,519
0
0

8,918

4,628

13,546
0
0

Of which, issuer headquartered in the U. S.

b. Total deposits with:
b.i. Other central banks and, BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad .
bJii. Banks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.

2.IMF Reserve Position

3. Special Drawing Rights (SDRs}
4. Gold Stock

5. Other Reser ve Assets

0
0

15,101

15,099

10,532

10,530

11,044

21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRldoliar exchange rate for the reporting date. The IMF data for July 20 are final. The entries in the table above
for July 27 (shown in italics) rerlect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of June 30, 2001. The May 31, 2001 value was
$11,044 million.

PCl- 525

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
July 20,2001
1. Foreign currency loans and securities

July 27,2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:

2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
July 27, 2001

July 20, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4. a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

o
o

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

28-Day Bill
August 02, 2001
August 30, 2001
912795HL8
3.590%

Investment Rate 1/:

Price:

3.647%

99.721

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 80.51%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive

Accepted

Tendered

Tender Type
$

33,720,000
17,603

9,982,450
17,603

SUBTOTAL

33,737,603

10,000,053

Federal Reserve

2,689,542

TOTAL

36,427,145

12,689,595

Median rate
3.575%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.550%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 33,737,603 / 10,000,053 = 3.37
NO FlMA NONCOMPETIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.

http://www.publicdebt.treas.gov

PO-S26

D EPA R T l\I E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBllC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

Text as Prepared for Delivery
August 1, 2001

Contact: Tony Fratto
(202) 622-2960

ASSISTANT SECRETARY FOR FINANCIAL MARKETS BRIAN ROSEBORO
REMARKS AT THE AUGUST 2001 TREASURY QUARTERLY REFUNDING
Good morning. I am pleased to be with you today to discuss the government's refunding
needs for the current quarter. In addition, I will be making a few announcements with respect to
other aspects of Treasury's debt management.
4-Week Bill
Yesterday, Treasury conducted its first auction of 4-week bills. We are pleased with the
results of the first auction, which raised $10 billion, and we believe that these securities will
become an important part of Treasury's ongoing debt management strategy. Regular weekly
offerings of 4-week bills will help to smooth seasonal fluctuations in Treasury's cash balances
and reduce reliance on cash management bills.
Federal Register Notice on Net Long Position and the 35 Percent Rule
On July 23, the Treasury announced the publication in the Federal Register of an
Advance Notice of Proposed Rulemaking that solicits public comments on potential
modifications to the calculation of the net long position (NLP) and the 35 percent award limit in
marketable Treasury securities auctions. Treasury invites comments on alternatives to NLP
reporting and the 35 percent award limit. Of particular interest are comments on an alternative
which would permit bidders in re-openings to exclude a portion of their current holdings of the
security being auctioned from their NLP calculation. We look forward to receiving comments
from market participants on this issue.
Debt Buybacks
Since our last quarterly refunding announcement in May, we have successfully completed
our buyback operations for the April-June quarter, purchasing $10 billion par amount of
securities. We continue to be pleased with the results of our buyback operations.
,In May we announced that we expect to conduct buybacks in the current July-September
quarter of approximately $10 billion par amount. We now expect to decrease slightly the amount
of buybacks this quarter to approximately $9 billion.
PO-527
For press rellUlf>2~J

'iiPeeches~

public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Additionally, today we are announcing that we expect to conduct buybacks of
approximately $9 billion par amount of securities in the upcoming October-December quarter.

Terms of the August Refunding
I will now turn to the terms of the August Refunding. We are offering $27 billion of notes
and bonds to refund approximately $12 billion of privately held notes and bonds maturing on
August 15, raising approximately $15 billion. The securities are:
1. Are-opening of the 45/8% 5-year note issued in May 2001, maturing May 15, 2006 in the
amount of $11 billion.
2. A 10-year note in the amount of$ll billion, maturing August 15,2011.
3. Are-opening of the 5 3/8% 30-year bond issued in February 2001, maturing February 15,
2031, in the amount of $5 billion.
These securities will be auctioned on a yield basis at 1:00 pm eastern time on Tuesday,
August 7, Wednesday, August 8, and Thursday, August 9, respectively.
As announced on Monday, we estimate that we will have a $55 billion cash balance on
September 30 and a $30 billion cash balance on December 31.
In keeping with Treasury's traditional practice, we will continue to announce any changes to
our debt management policy at our quarterly refunding press conferences. Our next quarterly
refunding announcement will take place on Wednesday, October 31.

-30-

NEWS

TREASURY
Ol'1·'1(:v.

()to'

}'UllLIC .\FJ'i\IRS. I son P">'iNSYI.V,\NI,\ ,\V"::-IIJIo:. "'.W.• \\·,'\Snl;-';(~TON. I).C.- 2tn2U-,lO!) {)22.~9MI

FOR RELEASE WHEN AUTHORIZED AT PRESS CONFERENCE
August 1, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY AUGUST QUARTERLY FINANCING
The Treasury will auction $11,000 million of 4-3/4-year 4-5/8% notes,
$11,000 million of 10-year notes, and $5,000 million of 29-1/2-year 5-3/8%
bonds to refund $11,885 million of publicly held securities maturing
August 15, 2001, and to raise about $15,115 million of new cash.
In addition to the public holdings, Federal Reserve Banks hold $2,207
million of the maturing securities for their own accounts, which may be
refunded by issuing additional amounts of the new securities.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of
each auction.
These noncompetitive bids will have a limit of $200 million
per account and will be accepted in the order of smallest to largest, up
to the aggregate award limit of $1,000 million.
TreasuryDirect customers requested that we reinvest their maturing
holdings of approximately $37 million into the 4-3/4-year note, $11 million
into the 10-year note, and $1 million into the 29-1/2-year bond.

All of the auctions being announced today will be conducted in the
single-price auction format.
All competitive and noncompetitive awards will
be at the highest yield of accepted competitive tenders.
The allocation
percentage applied to bids awarded at the highest yield will be rounded up to
the next hundredth of a whole percentage point, e.g., 17.13%.
NOTE:
The net long position reporting threshold amount for only the
29-1/2-year bond is $1 billion.
All of the securities being offered today are eligible for the STRIPS
program.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue
of Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356,
as amended).
Details about the notes and bond are given in the attached offering
highlights.

PO-S28

000

Attachment
For press releases, speeches, public schedules and official biographies, call our 24-llOur fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC
AUGUST 2001 QUARTERLY FINANCING
August 1, 2001
Offering Amount
Public Offering

$11,000 million
$11,000 mi Ilion
Offering amount less the amount awarded to FIMA accounts

$5,000 million

Description of Offering:
Term and type of security ........
Series. " . . . . . . . . . . . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . .
Auction date . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . .
Dated date . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . .

4-3/4-year notes (reopening)
E-2006
912827 6X 5
August 7, 2001
August 15, 2001
May 15, 2001
May 15, 2006
4-5/8%

10-year notes
C-2011
912827 7B 2
August 8, 2001
August 15, 2001.
August 15, 2001
August 15, 2011
Determined based on the highest
accepted competitive bid
Not applicable
Determined at auction
February 15 and August 15
$1,000

29-1/2-year bonds (reopening)
Bonds of February 2031
912810 FP 8
August 9, 2001
August 15, 2001
February 15, 2001
February 15, 2031
5-3/8%

$11.56250 per $1,000 (from
May 15 to August 15, 2001)

None

Determined at auction

$1,000
912820 GL 5

$1,000
912803 CK 7

Not applicable

Amount currently outstanding .....
Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payment dates . . . . . . . . . . .
Minimum bid amount and mUltiples.
Accrued interest payable
by investor . . . . . . . . . . . . . . . . . . . .

Premium or discount

$16,181 million
Determined at auction
November 15 and May 15
$1,000

STRIPS Information:
Minimum amount required . . . . . . . . . . $1,000
Corpus CUSIP number . . . . . . . . . . . . . . 912820 GG 6
Due date(s) and CUSIP number(s)
for additional TINT(s) . . . . . . . . . Not applicable

$10,887 million
Determined at auction
February 15 and August 15
$1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids:
Accepted in full up to $5,000,000 at the highest accepted yield.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the Federal Reserve Banks as
agents for FIMA accounts. Accepted in order of size from smallest to largest with no more than $200 million awarded per
account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for FIMA accounts will not exceed $1,000
million.
A single bid that would cause the limit to be exceeded will be partially accepted in the amount that brings the
aggregate award total to the $1,000 million limit.
However, if there are two or more bids of equal amounts that would cause
the limit to be exceeded, each will be prorated to avoid exceeding the limit.
~ompetitive bids:
(1) Must be expressed as a yield with three decimals, e.g., 7.123%.
(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 for each of the notes and $1 billion or greater for the bond.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of competitive tenders.
aximum Recognized Bid at a Single Yield:
35% of public offering
aximum Award:
35% of public offering
~eceipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge to their account of record at their financial
institution on issue date.

D EPA R T \1 E N T

0 F

THE

T REA SUR Y

NEWS
omCE OF PUBLIC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C. - 20220 - (202) 622·2960

For Immediate Release
August 2,2001

Contact: Tara Bradshaw
(202) 622-2014

WEEK THREE:
TREASURY TO MAIL OUT 8.185 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.185 million advance payment checks to
taxpayers for more than $3.468 billion in tax relief. These checks will be sent to taxpayers whose
last two digits of their Social Security numbers are 20-29.
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Three Week Total
Number of Checks 24.226 million
Amount of Relief $10.247 billion

The Treasury Department will announce every week the number of checks that are being mailed
out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will be
mailed over a ten-week period, according to the last two digits of the taxpayers Social Security
number. Notices from the Internal Revenue Service will inform taxpayers the amount of their
check and when they should expect it have been mailed. Single taxpayers will get a check up to
$300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers may
receive their checks at different times than their neighbors or other family members. On a
joint return, the first number listed will set the mailout time.
PO-530

For press releclf!S, -spu,chu, public st:hgdules and official biographies, call our 24-hour fax line at (202) 622·2040

If the last two digits of your
Social Security number are:
00 - 09

10 - 19
20 - 29
30 - 39
40 - 49

50 - 59
60 - 69
70 -79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6 .
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

D EPA R T 1\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFFICE OF PUBLIC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASIDNGTON, D.C .• 20220. (202) 622-2960

For Immediate Release
August 2, 2001

Contact: Tara Bradshaw
(202) 622-2960

TREASURY MODIFIES CORPORATE TAX SHELTER
DISCLOSURE AND REGISTRATION REGULATIONS

The Treasury Department and the Internal Revenue Service today issued modifications to
the corporate tax shelter disclosure and registration regulations. The regulations requiring
corporate taxpayers to disclose certain transactions on their tax returns have been modified to
focus better on transactions meriting IRS review. In particular, the modifications eliminate a
characteristic that triggers reporting of many legitimate business transactions and clarify two
exceptions to the reporting requirements.
"The modifications to the temporary regulations will make the disclosure and registration
rules more effective in identifying tax shelters and help taxpayers and practitioners to better
understand and comply with the rules. This will allow the IRS to devote more time, effort and
energy in identifying and pursuing abusive transactions," stated Mark Weinberger, Assistant
Secretary of the Treasury (Tax Policy).
In addition, modifications have been made to the rules requiring promoters to register
confidential corporate tax shelters to ensure that registration occurs where promoters restrict
customers from disclosing written materials provided to them by the promoter.

"This change will make certain that there is more sunshine on questionable transactions,"
Weinberger stated.
The changes are interim modifications in anticipation of the first significant filing of
disclosures by corporate taxpayers in September. Treasury continues to study comments on the
regulations and evaluate the operation of the regulations. Further changes may be made in the
future.

-30-

PO-531

Fur press rel~e5,

'Pt,aheJ, pulJlt6 fHIIwdules and official biographies, call our 24-hour fax line at (202)

622-2040

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

'IREASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

EMBARGOED 'ON'l'IL 2: 3 0 P • K.

CONTACT:

August l, 2001

'rREAStll\y

onus

l3-WEEK

Am)

Office of FiDaDCing
20l/69l-3SS0

26-WEEK BILLS

'l'he Treasury wi.~~ auction two series of Treasury bi~~s totaling
appraximate~y $29,000 mi~~ion
bil~s maturing August 9, 2001,

to refund $19,860 million of pub~icly held
and to raise about $9,140 million of new cash.

III addition to the public holdings, Federal ReSEII;"''''li~ Banks for their own
~c=~t~ ho!~ $lg~~gl =il!i~~ ~~

the_maturing bills, which may be refUnded at

the highest discount rate of accepted campetitive tenders in these auctions or

the 4-week bi~l auction to be he~d next week. Amounts awarded to these
accounts wi~l be in addition to the offering amount.
Up to $1,000 mi~~ion in DODCompetitive bids from Foreign and International MOnatary Authority (FIHA) accounts bidding through the Federal
Reserve Bank o~ 5ew York will be inc~uQed within the offe~ing amount of each
auction. These ncmcampetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award ~~t of $1,000 mi~lion.
Treasu~irect

customers have requested that we reinvest their maturing
hold1ngs of approximately $1,062 million into the 13-week bill and $8ll
million into the 26-week bill.
~ ~location

percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conditions set forth in the undfo%m Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasur,y Bil~s, Hotes, and Bonds (31 CFR Part 356, as
amended) •
Details about each of the new securities are given in the attached
offering highlights.
000

Attachment

2- 532
For press releases, speeches, public schedules and official biographies, call our 24ohour fax line at (202) 622-2040

HIGHLIGHTS or TREASURY OFFERINGS ,OF BILLS
TO BE I:SSUED AUGUST 9, :),00:'-.

August

2001

Offering Amount •••••••••••••••••••••••• $15,000 million
$14,000 million
Public Offering •••••• ~ ••••••••••••••••• Offering amount less the amou'Dt awardad to FIMA accounts
Description of OfferiDi:
Terom and type of .ecurity ••••••••••••••
CUSIP number •••••••••••••••••••••••••••
Auction date •••••••••••••••••••••••••••
I.sue date ••••••••• ;....................
Maturity date ••••••••••••••••••••••••••
Original issue date ••••••••••••••••••••
CUrrently outstanding ••••••••••••••••••
Minimum bid amount and multiples •••••••

91-day bill
912795 GT 2
August 6, 2001
August 9, 2001
November 8,2001
May 10, 2001
$13,850 million
$1,000

182-day bill
912795 JF 9
Augu.t 6, 2001
August 9,'2001
February 7, 2002
August 9, 2001
$1,000

The following rules apply to all .ecurities mentioned above:
Submission of Bidst
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive' bids.
Foreign and Xnternational Monetary Authority (FrMA) bidsr Noncompetitive bids submitted through the
Federal Reserve Banks a. agents for FIMA accounts. Acceptf,d in order of size fram smallest to largest
with no more than $200 million awarded per account. The tc)tal noncompetitive amount awarded to Federal
Reserve Batiks as agents for FrMA accounts will not exceed $:1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted i,n the amount that brings the aggregate award
total to the $1,000 million limit. However, if there are t',WC) or more bids of equal amounts that would
cause the limdt to be exceeded, each will be prorated to av()id exceeding the limit.
Competitive bidsl
(1) Must be expressed as a discount rate with three decimalH in increments of .005%, e.g., 7.100%,
7.105%.
(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 $1 billion or greater.
(3) Net long position must be deter.mined as of one balf-hou~ prior to the closing time for receipt of
competitive tenders.
Maximum Recognized Bid at a,Single Rate •••• 35% of public oftering
Maximum Award •••••••••••••••••••••••••••••• 35% of public offering
Receipt of Tenders:
Noncompetitive tenders ••• Prior to 12:00 noon eastern daylight !:aving time on auction day
Competitive tenders •••••• Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Dank on issue date, or payment of full
par amount with tender.
Tre4su~Direct customers can use the Pay Direct feature which authorizes a charge
to their account of record at their financial institution on issue date.

DEPARTMENT

THE

TREASURY

TREAS15RY

NEWS

OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• W,.\SHINGTON, D.C.- 20220. (202) 622-2960

EMBARGOED UNTIL 11:30 A.M.
August 6~ 2001

Contact:

Office of Pinancing
202/691-3550

TREASURY OFPERS 4 -WEEK BILLS

The Treasury will auction approximately $10,000 million of 4-week bills
to be issued August 9, 2001.
Tenders for bills to be held on the book-entry records of Treasury.Direct
will not be accepted.
Federal Reserve Banks for their own accounts hold $10~693 million of bills
maturing August 9, 2001~ which may be refunded at the highest discount rate of
accepted competitive tenders.
These accounts may be awarded 4-week bills in an
amount up to the remaining balance of the $10,693 million not refunded in
today's 13- and 26-week bill auctions. Amounts awarded to these accounts will
be in addition to the offer~g amount.
Up to Sl,OOO million in noncompetitive bids from Foreign and International
Monetary Authority (FIKA) accounts bidding through the Federal Reserve Bank of
New York will be included within the offering amount of the auction.
These
noncompetitive bids will have a l~it of $200 million per account and will be
accepted in the order of smallest to largest, up to the aggregate award limit
of $1,000 million.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold.
However, Treasury wi11 not include NLPs in the ca1culation of awarQ
ltmits for those bidders.
This offering of Treasury securities is governed by tb@.ter.ms and conditions set forth in the Unifor.m Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bouds (31 CFR Pare 356, as
amended) •
Details about the new security are given in the attached offering
higblights.

PO-533
Attachment

000

HIGHLIGHTS OF TREASURY OFFERING

OF 4-WEEK BILLS TO BE ISSUED AUGUST 9, 2001
August 6, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . $10,000 million
Public Offering .......••.•......... Offering amount less the amount
awarded to FlMA accounts
Description of Offering:
Ter.m and type of security .•••.••••. 28-day bill
CUSIP number •••••••••••••....••...• 912795 BN 4
Auction date •.•..••.•. , .•••..•..•.. August 7, 2001
Issue date ....••.•...•.••••..•••..• August 9, 2001
Maturity date . . . . . . . . . . . . . . . . . . • . . . September 6, 2001
Orig~al issue date . . . . . . . . . . . . . . . . March 8, 2001
Currently outstanding . . . . . . . . . . . . . . ~33,537 million
Minimum bid amount and multiples ... $1,000
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest
discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FIMA) bids; Noncompetitive bids submitted through the Federal Reserve Banks as agents for
PIMA accounts. Accepted in order of size from smallest to largest
wi.th no more than. $200 million awarded per account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for
FIMA accounts will not exceed $1,000 million. A single bid that
would cause the limit to be exceeded will be partially accepted in
the amount that brings the aggregate award total to the $1,000
million limit. However, if there are two or more bids of equal
amounts that would cause the limit to be exceeded, each will be
prorated to avoid exceeding the limit.
Competitive bids:
(1) MUst be expressed as a discount rate with three decimals in
increments of .005%, e.g., 4.215%.
(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 Sl billion or greater.
(3) Net long position must be determined as of one half-hour prior
to the closing t~e for receipt of competitive tenders.
Maximum Recognized Bid at a Single Rate .•. 35% of public offering
Maximum Award .•.••.••.••.•................ 3S% of public offering
Receipt of Tenders:
Concompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auetion day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
payment Te:r:1ns:
on

:i.sc:~e

By charge to a funds account at a Federal Reserve Bank
a.te.

PUBLIC DEBT NEWS
Department of the Treasury. Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
~OR

IMMEDIATE RELEASE
06, 2001

CONTACT:

Office of Financing
202-691-3550

~ugust

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:

91-Day Bill
August 09, 2001
November 08, 2001
912795GT2

High Rate:

3.430%

Investment Rate 1/:

3.508%

Price:

99.133

All noncompetitive and successful competitive bidders were awarded
;ecurities at the high rate. Tenders at the high discount rate were
illotted 99.06%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type

Accepted

Tendered

Competitive
Noncompetitive
FIMA (noncompetitive)

29,579,004
1,431,777
310,000

SUBTOTAL

31,320,781

Federal Reserve

4,650,423

TOTAL

35,971,204

13,258,364
1,431,777
310,000
15,000,141 2/
4,650,423

19,650,564

Median rate
3.420%: 50% of the amount of accepted competitive tenders
las tendered at or below that rate. Low rate
3.400%:
5% of the amount
)f accepted competitive tenders was tendered at or below that rate.
lid-to-Cover Ratio

31,320,781 / 15,000,141

2.09

./ Equivalent coupon-issue yield.
~/ Awards to TREASURY DIRECT = $1,165,809,000

http://www.publicdebt.treas.gov
-534

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
August 06, 2001

CONTACT:

Office of Financing
202-69l-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:

182-Day Bill
August 09, 2001
February 07, 2002
912795JF9

High Rate:

3.350%

Investment Rate 1/:

3.456%

Price:

98.306

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 98.02%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

5,538,782

Federal Reserve
$

34,895,513

12,736,004
1,164,351
100,000
14,000,355 2/

29,356,731

SUBTOTAL

TOTAL

28,092,380
1,164,351
100,000

Accepted

19,539,137

Median rate
3.340%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.310%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

= 29,356,731 / 14,000,355 = 2.10

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $887,138,000

http://www .publicdebt.treas.gov

PO-535

EPA R T 1\;1 E N T

0 F

THE

T REA SUR Y

NEWS

lRFASURY

OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASffiNGTON, D.C .• 20220. (202) 622-2960

u.s. International Reserve Position

8/7/01

The Treasury Department today released u.s. reserve assets data for the week ending August 3, 2001. As indicated in this
table, u.s. reserve assets totaled $66,276 million as of August 3, 2001, up from $66,087 million as of
July 27, .2001.
(in US millions)

I. Official U.S. Reserve Assets

1. Foreign Currency Reserves

a. Securities
Of whicl7, issuer headquartered in the U. S.
b. Total deposits with:
b.J~ Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
bJii. Banks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.
2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

5. Other Reserve Assets

August 3.2001
66,276

July 27.2001
66,087

TOTAL
Euro
5,282

Yen
10,690

TOTAL
15,97:::

Euro
5,344

Yen

TOTAL

10,675

°
8,918

4,628

13,546
0
0

°
9,022

4,622

0
0
0
0
15,021

10,530

10,549

11,044

deposits reflect carrying values.

2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdollar exchange rate for the reporting date. The IMF data for July 27 are final. The entries in the table above
for August 3 (shown in italics) reflect any·necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at 542.2222 per fine troy ounce. Values shown are as of June 30, 2001. The May 31, 2001 value was

PO-536

13,043

14,995

11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA). valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and

$11,044 million.

16,019

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
July 27,2001
1. Foreign currency loans and securities

August 3. 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions

3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
August 3. 2001

July 27, 2001
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.e. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

o
o

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550

CONTACT:

FOR IMMEDIATE RELEASE
August 07, 2001

RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
August 09, 2001
September 06, 2001
912795HN4

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.560%

High Rate:

Investment Rate 1/:

Price:

3.621%

99.723

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 45.68%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive

SUBTOTAL
Federal Reserve
TOTAL

Accepted

Tendered

Tender Type

28,631,760
11,994

9,988,233
11,994

28,643,754

10,000,227

503,423

29,147,177

10,503,650

Median rate
3.550%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.520%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 28,643,754 / 10,000,227 = 2.86
NO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.

http://www.publicdebt.treas.gov

0-537

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
August 07, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 4-3/4-YEAR NOTES
This issue is a reopening of a note originally issued May 15, 2001.
Interest Rate:
Series:
CUSIP No:

4 5/8%
E-2006
9128276X5
High Yield:

Issue Date:
Dated Date:
Maturity Date:
4.670%

Price:

August 15, 2001
May 15, 2001
May 15, 2006

99.797

All noncompetitive and successful competitive bidders were awarded
securities at the high yield.
Tenders at the high yield were
allotted 95.66%. All tenders at lower yields were accepted in full.
Accrued interest of $ 11.56250 per $1,000 must be paid for the period
from May 15, 2001 to August 15, 2001.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive

23,447,810
178,177

11,000,078 1/

23,625,987

SUBTOTAL

623,432

Federal Reserve
TOTAL

24,249,419

10,821,901
178,177

11,623,510

Median yield
4.651%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
4.600%:
5% of the arno,unt
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO

23,625,987 / 11,000,078

2.15

NO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
MINIMUM IS $1,000.
1/ Awards to TREASURY DIRECT

$104,814,000

http://www .publicdebt. treas.gov

PO-538

THE STRIPS

D EPA R T l\l E N T

0 F

THE

T REA SUR Y

NEWS
omCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960

FOR IMMEDIATE RELEASE
August 7, 2001

Contact: Tasia Scolinos
(202) 622-2960

JIMMY GURULE SWORN IN AS TREASURY
UNDER SECRETARY FOR ENFORCEMENT

Treasury Secretary Paul O'Neill swore Jimmy Gurule in this afternoon as Treasury Under
Secretary for Enforcement. The U.S. Senate voted unanimously to confirm Mr. Gurule on
Friday, August 3rd.
As Under Secretary for Enforcement, Mr. Gurule will provide oversight, policy guidance
and support to the Treasury law enforcement components - the Bureau of Alcohol, Tobacco and
Firearms; the U.S. Customs Service; the Executive Office of Asset Forfeiture; the Federal Law
Enforcement Training Center; the Financial Crimes Enforcement Network; the Office of Foreign
Assets Control; and the U.S. Secret Service.
A member of the Utah Bar since 1980, Mr. Gurule brings a wealth of law enforcement
experience to the Treasury Department. Mr. Gurule began his career as a trial attorney with the
Department of Justice in Washington D.C. He has subsequently held the following positions:
Deputy County Attorney in the Salt Lake City Attorney's Office; Assistant U.S. Attorney and
Deputy Chief of the Major Narcotics Section of the Los Angeles branch of the U.S. Attorney's
Office; and Assistant Attorney General with the Department of Justice's Office of Justice
Programs in Washington D.C. Prior to joining the Treasury Department, Mr. Gurule taught
crimina11aw and complex criminal litigation at Notre Dame Law School.
Mr. Gurule was recognized for his contribution to law enforcement when he received the

Attorney General's Distinguished Service Award and the Drug Enforcement Administration's
highest award, the Administrator's Award. The Department of Justice honored him in 1991 with
the prestigious Edmund J. Randolph Award, and again in 1992 with the Award for Excellence in
Management. In addition, Mr. Gurule is a prominent member of the Hispanic Legal Community.
Mr. Gurule graduated from the University of Utah in 1974 and received his law degree
from the University of Utah College of Law in 1980. He and his wife Julia have three children.

PO-539

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

E P .\ R T i\I E N T

() F

T II E

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960

FOR IMMEDIATE RELEASE
August 7, 2001

Contact: Rob Nichols
(202) 622-2960

KENNETH W. DAM SWORN IN AS DEPUTY SECRETARY OF THE TREASURY

Secretary Paul O'Neill swore Kenneth Dam in this afternoon as Deputy Secretary of the
Treasury. The Senate voted by unanimous consent to confirm Dam on August 3, 2001.
As Deputy Secretary of the Treasury, Dam advises and assists the Secretary in the
supervision and direction of the Department and its activities, and succeeds the Secretary in his
absence, sickness, or unavailability. The Deputy Secretary plays a primary role in the
formulation and execution of Treasury policies and programs in all aspects of the Department's
activities.
Mr. Dam has been the Max Pam Professor of American and Foreign Law at the
University of Chicago Law School, a position from which he is now on leave of absence.

His prior government positions include Deputy Secretary of State (1982-85), Executive
Director ofthe White House Council on Economic Policy (1973), and Program Assistant
Director for national security and international affairs at the Office of Management and Budget
(1971-73). He has also served over the years as a consultant and an advisor to a number of U.S.
government agencies.
After graduating from the University of Chicago Law School in 1957, Mr. Dam served as
a law clerk to U.S. Supreme Court Justice Charles Whittaker (1957-58), an associate with
Cravath, Swaine & Moore in New York (1958-60), and a law professor at the University of
Chicago when not in government from 1960 to 1980. In 1980 he became Provost of the
University of Chicago, where he served until being appointed by President Reagan as Deputy
Secretary of State in 1982.
Upon leaving the State Department in 1985, he became a corporate vice president for law
and external relations ofIBM, a position he held until 1992. In 1992, he served on an interim
basis as president and chief executive officer of the United Way of America in order to lead an
investigation of a highly publicized scandal in the leadership of that organization and to
reorganize its staff and governance. Thereafter, he rejoined the University of Chicago Law
School faculty, where in recent years he has taught courses on international finance, international
economic policy, and patent law.
PO-540
Fm- press release£. speeches. Public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Mr. Dam is a well-known arbitrator in complex litigation. From 1996 to 2001 he served
as System Arbitrator under the collective bargaining agreement between the National Basketball
Association and the National Basketball Players Association.
He has served on the board of a number of public policy institutions, including the
Council on Foreign Relations (New York), the Chicago Council on Foreign Relations, and the
Brookings Institution. He was co-chairman of the Aspen Strategy Group from 1991 to 2001 and
was, during 1999 and 2000, chairman of the German-American Academic Council. He served
from 1987 to 2001 as a member of the board of Alcoa.
Among his many publications are the following books: Economic Policy Beyond the
Headlines (with George P. Shultz) (2d ed. 1998); The Rules of the Game: Reform and Evolution
in the International Monetary System (1982); Oil Resources: Who Gets What How? (1976); and
The GATT: Law and International Economic Organization (1970).
He was born in 1932 in Marysville, Kansas, and grew up on a farm. His undergraduate
education was at the University of Kansas. He resides in Chicago with his wife Marcia, and they
have two adult children, Eliot and Charlotte.

D E P ,\ R T [\1 E N T

0 F

TilE

T REA SUR Y

NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

Contact: Rob Nichols
(202) 622-2960

FOR IMMEDIATE RELEASE
August 7, 2001

MICHELE DAVIS SWORN IN AS ASSISTANT SECRETARY FOR PUBLIC AFFAIRS

Treasury Secretary Paul O'Neill swore Michele Davis in today as Assistant Secretary for
Public Affairs. The U. S. Senate voted by unanimous consent to confirm Davis on August 3,
2001.
As Assistant Secretary for Public Affairs, Davis is the lead representative of the Treasury
Department for media, business, professional trade organizations, consumer groups, and the
pUblic. The Office of Public Affairs develops and implements communications strategy for the
Department and advises officials within the Department and its bureaus how best to
communicate issues and priorities of public interest. Davis also oversees the Office of Public
Liaison and the Office of Public Education.
Ms. Davis was Communications Director to House Majority Leader Dick Armey (R-TX)
from 1997 until January 2001. Davis served as chief spokesman for the Majority Leader's office
and as an advisor to the House Republican leadership. Davis began work in the Majority
Leader's Office in 1995.
Before joining the Majority Leader's staff, Davis served as an Economist with the
Minority Staff of the Joint Economic Committee in Congress and prior to that Davis worked as
an Economist with Citizens for a Sound Economy (CSE), a free-market advocacy organization.
Originally from Louisville, Kentucky, Davis has a Master's degree in economics from the
American University and earned her Bachelor of Science in Foreign Service from Georgetown
University in 1988.
-30PO-541

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

EPA R T :\1 E N T

1REASURY

() F

THE

T REA SUR Y

NEWS

OFFICE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960 .

FOR IMMEDIATE RELEASE
August 7, 2001

Contact: Betsy Holahan
(202) 622-2960

HENRIETTA HOLSMAN FORE SWORN IN AS DIRECTOR OF U.S. MINT
Henrietta Holsman Fore was sworn in today as Director of the U.S. Mint by Treasury
Secretary Paul O'Neill. She was confirmed by the U.S. Senate on Aug. 3.
As Director of the Mint, Fore will oversee the agency's primary mission, which is to
produce an adequate volume of circulating coinage for the nation to conduct its trade and
commerce.
The Mint also is responsible for the annual production of 14-20 billion circulating coins;
distributing U.S. coins to the Federal Reserve banks and branches; maintaining physical custody
and protection ofthe Nation's $100 billion of U.S. gold and silver assets; producing proof and
uncirculated coins, commemorative coins, and medals for sale to the general public;
manufacturing and selling platinum, gold, and silver bullion coins; oversight of production
facilities; and receiving, redeeming, and processing mutilated coins.
Previously, Fore was Chairman and CEO of Holsman International, an investment and
management company, and Chairman and President of Stockton Products, a manufacturer and
distributor of steel products, cement additives, and wire building materials for the U.S. and
European construction industry.
Fore most recently served on the Corporate Board of the New York Stock Exchangelisted Dexter Corporation, Windsor Locks, CT, and HSB Group Inc., Hartford, CT.
In addition to her private sector experience, Fore held presidential appointments within
the U.S. Agency for International Development as Assistant Administrator for Asia (1991 1993) and Assistant Administrator for Private Enterprise (1990 - 1991). She founded and served,
from 1991 to 1993, as the first Chairman ofthe U.S. - Asia Environmental Partnership, a
coalition of business, government and community organizations in the United States and 31
Asian nations.
Fore was a Trustee and Executive Committee member at the Center for Strategic and
International Studies (CSIS). She has specialized in international business and privatization;
Asian trade and economic policy; technology cooperation; international finance; environmental
policy reform; U.S. bilateral and multilateral development assistance, and women's leadership.
PO-542

For press releases. speeches. bublic schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Fore served on the Executive Committee of the Aspen Institute Board of Trustees. She
recently was Chairman of the Audit Committee. For several years, she moderated values-based
Leadership Seminars and mentored Henry Crown Fellows at the Aspen Institute.
In addition, Fore served as a Trustee and Director of National Public Radio Foundation,
Washington, DC, Asia Society, New York, NY, The Asia Foundation, San Francisco, CA,
Institute of the Americas, La Jolla, CA, US Committee - Pacific Economic Cooperation Council
(USPECC), Washington, DC, and National Foundation for Women Business Owners in
Washington, DC.
In 1997, Fore received the Women Redefining Leadership award at the State of the World
Forum in San Francisco, CA. She has been a member of Chief Executives Organization (CEO),
World Presidents' Organization (WPO), The Committee of 200, the Wellesley Business
Leadership Council, International Women's Forum, and the National Association of Corporate
Directors (NACD).
Fore earned a bachelor's degree in history from Wellesley College and a master's degree
in Public Administration from the University of Northern Colorado. She studied International
Politics at Oxford University and studied at Stanford University Graduate School of Business.
She is married and resides in Washington, DC, and Nevada.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550

CONTACT:

FOR IMMEDIATE RELEASE
August 08, 2001

RESULTS OF TREASURY'S AUCTION OF 10-YEAR NOTES
Interest Rate:
Series:
CUSIP No:

Issue Date:
Dated Date:
Maturity Date:

5%
C-2011
9128277B2
High Yield:

5.078%

Price:

August 15, 2001
August 15, 2001
August 15, 2011

99.394

All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 63.72%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive

31,244,345
107,692

1,043,030

Federal Reserve
$

32,395,067

10,892,363
107,692
11,000,055 1/

31,352,037

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

12,043,085

Median yield
5.070%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
5.030%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 31,352,037 / 11,000,055 = 2.85
NO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
MINIMUM IS $1,000.
1/ Awards to TREASURY DIRECT

$69,605,000

http://www.publicdebt.treas.gov

PO-543

THE STRIPS

() E P :\ R T ;\1 E N T

0 F

TilE

T REA SUR Y

NEWS
omCE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622·2960

F or Immediate Release
August 9,2001

Contact: Tara Bradshaw
(202) 622-2014

WEEK FOUR:
TREASURY TO MAIL OUT 8.21 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.210 million advance payment checks to
taxpayers for more than $3.467 billion in tax relief. These checks will be sent to taxpayers whose
last two digits of their Social Security numbers are 30-39.
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Four \Veek Total
Number of Checks 32.436 million
Amount of Relief $13.714 billion
The Treasury Department will announce every week the number of checks that are being mailed
out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will be
mailed over a ten-week period, according to the last two digits of the taxpayers Social Security
number. Notices from the Internal Revenue Service will inform taxpayers the amount of their
check and when they should expect it have been mailed. Single taxpayers will get a check up to
$300, head of household up to $500 and married couples filing jointly will get up to $600.

PO-544
For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
'U S Government Printing Office 1998· 619·559

Because the Social Security number determines when checks are mailed, taxpayers may
receive their checks at different times than their neighbors or other family members. On a
joint return, the first number listed will set the mailout time.
If the last two digits of your
Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 - 79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

D E P :\ R T :\. E N T

0 F

TilE

T REA SUR Y

~J1178~9~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

....................................

omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C. - 20220 - (202) 622-2960

FOR IMMEDIATE RELEASE
August 9, 2001

Contact: Betsy Holahan
(202) 622-2960

PETER R. FISHER SWORN IN AS UNDER SECRETARY
OF THE U.S. TREASURY FOR DOMESTIC FINANCE
Peter R. Fisher was sworn in today as Under Secretary of the U.S. Treasury for
Domestic Finance by Treasury Secretary Paul O'Neill. He was confirmed by the U.S.
Senate on August 3.
As Under Secretary, Fisher is the senior advisor to the Treasury Secretary and the
Deputy Secretary on all aspects of domestic finance. His office is responsible for
formulating policy and legislation in the areas of financial institutions, public debt
management, capital markets, government financial management services, federal
lending, fiscal affairs, government-sponsored enterprises, and community development.
He also serves on the board of Securities Investor Protection Corporation and chairs the
Advanced Counterfeit Deterrence Steering Committee.
Prior to joining the Treasury Department, Fisher was executive vice president of
the Federal Reserve Bank of New York, and manager of the System Open Market
Account for the Federal Open Market Committee, overseeing all domestic open market
and foreign exchange operations and the provision of account services to foreign central
banks.
Fisher earned a J.D. degree from Harvard Law School in 1985 and a B.A. degree
in history from Harvard College in 1980.
He is married, has two children and resides in Washington, D.C.

PO-S45

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U S Government Pflntlnq Otflce t9gg· 619·559

D E P .\ R T :\1 E N T

0 F

T II E

T REA S tJ R Y

NEWS

TREASURY

OFFICE OF PUBLIC AFFAIRS e )500 PENNSYLVAN.IA AVENUE. N.W. e WASHINGTON, D.C.e 20220. (202) 622-2960

EMBARGOED UNTIL 2: 3 0 P.K.
August 9, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEEK AND 26-WERK BILLS

The Treasury will auction two series of Treasury bills totaling
approximately $29,000 million to refund $20,335 million of publicly held
bills ~turing August 16, 2001, and to raise about $8,665 million of new cash_

In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $10,284 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders in these auctions or
the 4-week bill auction to be held next week. Amounts awarded to these
accounts will be in addition to the offering amount.
Up to $1,000 million ~ noncompetitive bids from Foreign and International Monetary Authority (PIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award l~t of Sl,OOO million.
Treas~Direct customers have requested that ~e reinvest their maturing
holdings of approx1mately Sl,085 million into the I3-week bill and Sl,110
aillion into the 26-week bill.

The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e - g.. 17 _13 %•

This offering of Treasury securities is governed by tbe terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about each of the new securities are given in the attached
offering highlights.

PO-S46

000

Attachment
For press releases, speeches, public schedules and officia.l biographies. call our :U-hour fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFBRINGS OF BILLS
TO BE ISSUBD AOGUST 16, 2001
August 9, 2001
$14,000 million
Offering Amount ......................... $15,000 million
Public Offering ...........•............. Offering amount less the amount awarded to FIMA accounts
Description of Offering:
Term and type of security .•...•....•.... 91-day bill
CUSIP nwmber .........................•.. 912795 HV 6
Auction date ................••.......... August 13, 2001
Ieoue date ........•.......•........•.... August 16, 2001
Maturity date ....•........•......•...... November 15, 2001
Original issue date ................•.... ~ay 17, 2001
Currently outstanding .....•..•.......... $13,279 million
Minimwn bid amount and multiples ...•.... $1, 000

182-day bill
912795 JG ?
August 13, 2001
August 16, 2001
February 14, 2002
August 16, 2001
$1,000

The fo~lowing rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the
Federal Reserve Banko as agents for PIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FIMA accounts will not exceed $1,000 million. A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate award
lotal to the $1,000 million limit. However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005\, e.g., 7.100~,
7.105\.
(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 $1 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 Rate •.•• 35t of public offering
Maximuu Award •••••••••••.•••••••••••••••••• 3S% of public offering
Receipt of Tenders ~
Noneompe~itive tenders ••• Prior to 12:00 noon eastern daylight saving time on auction day
Co",etitive tenders .••••. Prior to 1.00 p.m. eastern daylight saving time on auction day
Payment Terms: By cha~ge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par ~ount with tender. TreasuryDirect customers can use the Pay Direct feature which ~uthorizes a charge
to their account of record at their finanoial institution on issue date.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

FOR IMMEDIATE RELEASE
August 09, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 29-1/2-YEAR BONDS
This issue is a reopening of a bond originally issued February 15, 2001.
Issue Date:
Dated Date:
Maturity Date:

Interest Rate:
5 3/8%
Series:
CUSIP No:
912810FP8
STRIPS Minimum: $1,000
High Yield:

5.520%

Price:

August 15, 2001
August 15, 2001
February 15, 2031

97.900

All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted
7.10%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive

10,772,512
32,343

5,000,027 1/

10,804,855

SUBTOTAL

540,230

Federal Reserve
TOTAL

11,345,085

4,967,684
32,343

5,540,257

Median yield
5.472%:
50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low yield
5.400%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 10,804,855 / 5,000,027 = 2.16
NO FIMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Awards to TREASURY DIRECT

$21,301,000

PO-547
http://www.publicdebt.treas.gov

D E P .\ R T ~l E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

F or Immediate Release
August 10, 2001

Contact: Tara Bradshaw
(202) 622-2014

U.S., JAPAN TO NEGOTIATE REVISION TO INCOME TAX TREATY
The United States and Japan have agreed to open fonnal negotiations with respect to a
new bilateral income tax treaty. The two governments are in the process of scheduling the first
round offonnal negotiations, with a view to holding them in October, 2001, in Tokyo. The new
treaty would replace the treaty currently in force between the two countries, which has been in
effect since 1972. The two Gove~ents have decided that the current treaty needs to be revised
to take into account significant developments in the tax treaty policies and domestic tax systems
of both countries since 1972.
The Treasury Department invites written comments from the public regarding the
upcoming negotiations. Comments on the proposed treaty revision should be sent to Barbara M.
Angus, International Tax Counsel, Room 1000 Main Treasury, Washington, DC 20220.
Comments may also be sent by fax to (202) 622-0646.

-30-

PO-S48

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

DEPARTMENT

THE

TREASURY

NEWS

OFFlCE'OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W. e WASHINGTON, D.C.e 20220 e (202) 622.2960

~ED
~Ugu5t

UNTIL 11:30 A.M.
13, 2001

Contac~:

Office of Fjnancing

202/691-3550
TREASURY OFFERS 4-WEEK lULLS

'!'he Trea~\1-.-y .... i l l &'i.+c'tion ap:i,?,ro.."'timat.aly $ll, 000 million of 4-week bills
:0 be issued August 16, 2001.
Tenders for bil15 to be held on the book-entry records of T.reas~irect

nIl

~ be

accepted.

Federal Reserve Banks for their own accoUD~S hold $10,284 ~llion of bi~ls
~euring August 16, 2001, which may be refunded at the highest discount rate of
lccepted cam,petitive tenders. These accounts may be awarded 4-week bills in an
UUOWlt up to the remaining balance of ~e $10,284 million not refunded in
:oQay's 13- and 26-week bill auctions. Amounts awarded to these accounts will
~ in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International
!lOnetary Authority (FDIA) accounts biciciing through the Federal Reserve Bank of
!lew York will be included. wi:chin the offerl.ng amount: of the auction.
These
~n.oompetitive bids will have a l~t of $200 ~llion per account and wi11 be
lcc~ted in the order of smallest to largest, up to the aggre~ate award l~it:
~f $1,000 million..

The a11oc&~~on percentage applied to bids awarded at the highest discount
will be rounded up to the next hundredth of a whole percentage point,
a.g., 17.13%.
~ate

Note: Competitive bidders in 4-week bill auctions will be required to
their net long position (NLP), if they meet or exceed the reporting
~hreghe~d.
However, Treasury w:i~l not inc1ude Nt.l'l:I in the ~;l.lculatiQn o£ award
~imits for those bidders.
~eport

This offering of Treasury securitie5 is governed by the terms and conutions set forth in the onifor.m Offering Circular for the Sale and Issue of
Tarketable Book-Entry Treasury Bills, Notes .. and Bonds (31 CPR Part. 356, as
llD.ended) •

Details about the

~ew

security are given in the attached offering

Lighlight.s.
0-549
.ttacbment

000

lUGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED AUGUST 16, 2001

August 13, 2001
Offering Amount ••••..•••..•..••.•••. S11,OOO million
Public Offering ••..•••••.....••••••• Offering amount less the amount
awarded to FDIA accounts
Description o£ Offering:
Ter.m anQ t~ 0; security •••••.•.•.• ~8-day bill
CUSIP number •.•••...•.•..•.••.•••.•. 912795 GR 6

Auction date ••••••.•••••••.•••••••••
Issue date .............................
Maturity date ••••.•..••••••...••••••
Od.ginal issue date ••••••••••••.••••

August lA, 2001
August ~6, 2001

September 13, 2001
March 1.5, 2001
CUrren~ly outstanding .•••••••••••••• $30,687 ~l1.ion
~nimum bid amount and multiples •..• $1,000
~ssion of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest
discount rate of accepted competitive bids.
Foreign and IntfU:'na.tional ~ta.%y Authority (FJ:MA) bids: Nonc::ampetitivQ bids sUbmitted through the Federal Reserve Banks as agents for
FDIA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account. The total nonc~G~itive amount awarded to Federal Reserve Banks as agents for
F~ aecoun~s will nO~ exceed $1,000 ~llion..
A single bid that
would cause the limit t.o be exceeded will be partial..ly a.ccepted in
the amount tbat Dring's the aggregate award total to the $~, 000
million limit. However, if there are two or more l:>ids of equal
amounts that would cause the limit to be exceeded, each will be
prorated to avoid exceeding the limit.
Competitive bids:

expressed as a discount rat.e with three dec::imals in
increments of .005%~ e.g., 4.215%.
(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 $1 billion or greater.

(1)

Kuslt be

(3) Ret long position must be determined. as o£ one hal.f-hour prior
to the closing t~e for receipt of compet.itive te~ers.
Maximum Re<:og:U.zed. Bid at a Single Rate ••• 35% of public offering
Maximum ~ •• ·.-···· ••••••••••• - •••••••• 3S% of public offering

Receipt of Tenders:
Noncompetitive tenders:
Prior to 1.:00 noon easteru ~light saving time on auction aay
Competitiv. ~aD4.rs:
Prior to 1.00 p.m. eastern daylight saving time on a.uc::tion day
Pay,men~ 'l'erms:
0:1.

:i.&~.

iIy

4&';0.

cb&rge to a funds account at a Federal bsel:Ve Ba.nk

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY I\UCTJON RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON
Office of Financ~ng
202-691-3550

CONTACT:

FOR IMMEDIATE RELEASE
August 13, 2001

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
August 16, 2001
November 15, 2001
912795HV6

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.350%

High Rate:

Investment Rate 1/:

Price:

3.426%

99.153

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 69.34%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

30,377,318
1,468,515
225,000

-----------~-----

15,000,253 2/

32,070,833

SUBTOTAL

TOTAL

4,157,807

Federal Reserve

36,228,640

13,306,738
1,468,515
225,000

19,158,060

Median rate
3.330%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
3.300%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

32,070,833 / 15,000,253

2.14

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,191,250,000

?O-550

http://www.publicdebt.treas.gov

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:

FOR IMMEDIATE RELEASE
August 13, 2001

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
August 16, 2001
February 14, 2002
912795JG7

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.260%

High Rate:

Investment Rate 1/:

Price:

3.360%

98.352

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 19.80%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

29,787,435
1,546,442
75,000

14,000,216 2/

31,408,877

SUBTOTAL

TOTAL

5,209,964

Federal Reserve

36,618,841

12,378,774
1,546,442
75,000

19,210,180

Median rate
3.250%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.205%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

31,408,877 / 14,000,216

2.24

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,183,452,000

PO-551

http://www .publicdebUreas.gov

E P ,\ R T [\1 E N T

0 F

THE

T REA SUR Y

NEWS
omCE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

Contact: Karen Mocker, (202) 622-8401
Bill Luecht1 (202) 622-8042

FOR IMMEDIATE RELEASE
August 13,2001

TONY T. BROWN APPOINTED
AS DIRECTOR OF COMMUNITY DEVELOPMENT FUND
Washington, DC - Tony T. Brown has been appointed Director of the Community
Development Financial Institutions (CDFI) Fund by Treasury Secretary Paul H. O'Neill. Mr.
Brown's tenure begins today.
As Director of the CDFI Fund, Mr. Brown will oversee the expansion of access to capital
and financial services in critically under-served urban, rural and Native American communities,
where one of the biggest obstacles to economic development is a lack of access to mainstream
sources of private sector capital.
Before receiving the appointment, Mr. Brown served as a Senior Vice President for Bank
of America in Jacksonville, FL, from 1990 to 2001. Mr. Brown's tenure at Bank of America
included a number of senior management positions in community development.
Among his prior responsibilities, Mr. Brown was the executive charged with managing
the bank's community development program for the state of Florida, which included community
development lending and the provision of financial services. These activities resulted in over $2
billion in annual loan production and "Outstanding" ratings in Community Reinvestment Act
(CRA) perfonnance.
Mr. Brown is a graduate of Xavier University in Cincinnati, Ohio with a Master of
Business Administration degree in Finance and a Bachelor of Arts degree in International Affairs
and Business.
For more infonnation on the CDFI Fund and its programs, please visit our website at
www.treas.gov/cdfi.

PO-552

-30-

Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Office: 1998 - 619-559

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS

_ _IIIIIiI~:'-'_

OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

u.s. International Reserve Position

8/14/01

The Treasury Department today released US. reserve assets data for the week ending August 10, 2001. As .indicated.in
this table, U.S. reserve assets totaled $66,779 million as of August 10,2001, up from $66,290 million as of August 3, 2001.

(in US millions)

I. Official U.S. Reserve Assets

1. Foreign Currency Reserves

a. Securities
Of which. issuer headquartered in the US.
b. Total deposits with:
b.i. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b.ii. Of which, banks located abroad
b.ii;. Banks headquartered outside the U.S.
b.iii. Of which, banks located in the U.S.

2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

,5. Other Reserve Assets

August 10 l 2001
66,799

August 3 l 2001
66,290

TOTAL
Euro

Yen

TOTAL

Euro

Yen

TOTAL

5,344

10,675

16,019
0

5,417

10,805

16.222
0

9,022

4,622

13.643
0
0

9,128

4,678

13,807
0
0

0
0

15,033

15.117

0,551

10.610

11,044

1'/ Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
depoSits reflect carrying values.
21 The items, "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdollar exchange rate for the reporting date. The IMF data for August 3 are final. The entries in the table above
for August 10 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce. Values shown are as of June 30, 2001. The May 31 , 2001 value was
$11,044 million.

PO-553

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
August 3, 2001

1. Foreign currency loans and securities

August 10, 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
August 10, 2001

August 3, 2001

1. Contingent liabilities in foreign currency
i.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U.S.
3.c. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.i. Bought calls
4.b.2. Written puts

o
o

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

MEDIA ADVISORY

Treasury Secretary Paul H. O'Neill will swear in Rosario Marin as the 41 5t U.S. Treasurer
at 4 p.m. EDT on Thursday, August 16,2001 in the Treasury Department's Diplomatic
Reception Room (Room 3311),1500 Pennsylvania Ave., N.W.
The position of U.S. Treasurer is the oldest office in the U.S. government, pre-dating the
Department of Treasury as well as the President.
The Diplomatic Room will be available for pre-set at 3 p.m.
Media without Treasury or White House press credentials planning to attend should
contact Treasury's Office of Public Affairs at 202-622-2960, by close of business Wednesday,
August 15,2001 with the following information: name, social security number and date of birth.
This information may also be faxed to 202-622-1999.
-30-

PO-554

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Office: 1998 - 619·559

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
August 14, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

28-Day Bill
August 16, 2001
September 13, 2001
912795GR6
3.470%

Investment Rate 1/:

3.529%

Price:

99.730

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 36.53%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered

Tender Type
Competitive
Noncompetitive

SUBTOTAL
Federal Reserve
TOTAL

28,651,474
17,003

Accepted

10,983,227
17 ,003

28,668,477

11,000,230

916,180

29,584,657

11,916,410

Median rate
3.460%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.420%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
BID-TO-COVER RATIO = 28,668,477 / 11,000,230 = 2.61
NO FlMA NONCOMPETITIVE BIDS WERE TENDERED IN TODAY'S AUCTION.
1/ Equivalent coupon-issue yield.

http://www .publicdebUreas.gov

PO-555

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

BKBARGOED

mrrn.

9:00 A.II.

PUBLIC

AUgUSt 15. 2001
KEDU CONTAC'l':

Office of F;nanc~
202-691-3550
Office of ~lic Affairs
202-622-2960

0z1 ~Q'USt 16, 2001. the ~ea.su:y wi.~l buy back up to $1,750 mill.ion par
of its outsta~ding i.ssues that mature between February 2015 and. August 2019.
!'r6asury reserves the right to &ccept 1.8S8 than the announced amount.
'l'his debt buybac::k (redemption) operation will be conducted by 'l'reasury' Ii
Fisc:a.l Agent. the Pederal Reserve Bank of Sew York, using its Open Market
operations sy&tem. OzUy izl$titutions that the Federal Reserve Bank of New
York bas approved to conduct Open Karket transactions may submit offers on
behalf of themse1ves and their customers. Offers at the highest accepted
price for a partic:ular issue may be accepted OIl a prorated basilil, rounded up
to the next $100,000. .As a result of this roun.d.ing, the 'l'reasoury may buy
hac:k an a=ount slightly l.&rger than the one ~e<i above.

'rhis debt lmybac:k operation is VO'V8r%l.ed by the terms and conditions set
forth in 31 CFR Part 375 aDd this &mlO\UlC&llae:t.
'!'he debt buyback operation regulations are availa.bl.e on the Bureau of
the Public:: Debt's website at www.pu]:)11cdebt.treas.gov.
Details about t.ha operation and each -of the el.igible issues are givan

in tlle attac::bed highllog'bta.

Attachment

0-5·56

For prns relelUes, qJuches. publi& "tr,dules "nil offlCi.o.l biographies, call our 24-kour fax line at (202) 622-2040

August 15, lOOl

?ar amount to be bought back: •••• "Up to $1,750 aillion
Operation date •••••••••••••••••• August 16, 2001
Operati~ close t~e •••••••••••• 11:00 a.m. easearn daylight aaviug time
Settlement aate ••••••••••••••••• kgust 20, 2001
.11'';=111 par offer amount ......... 100,000
JIultiples of par ••••••••••••••• $100,000
Pozmat for offers ••••• -.;pressed in tez:ms of price per $100 of par with
~e

three 4ecimals.

first two dec:1.mals represent

'1'he third decimal
E'8PreseDts eighths of a 320il of a dollar, aDd must
be a 0, 2,4, ~ 6.

:frac:tiOZ1&l 32.s. of a 401l.ar.

J)ellve:y hstructions ••••• _ ••••• ABA JJWDber 021001208 PRB JIYC/COSr:
~easw:y

issues eligible

~or

debt buYback operation (in mi11io:a.s):
Par AlDcunt

COUPOZl
~te

(%)
11.250
10.625
9.875
9.250
7.250
7.S00
8.750
8.875
9.125
9.000
8.875
8.125

• 'It

Jlaturity
Date

--COSIP

02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019

912810 DP
9:12810 I>S
912810 l)T
912810 DV
912810 PW
912810 nx
'12810 DY
'12810 tJZ
912810 BA
912810 EB
912810 2C
914810 ED
'1'otal

08/1.5/2Q1~

1I1wDber

0
4
~

7
5
3
1
8

2
0
8
6

"'ar~t

Pri....tely

O\Itstanding*

Held9,l40
3,224
4,660
4,775
17,724
17,168
13,487
9,973
5,833
6,734
12,460
16,556
121,834

11,086
4,391
5,667
5,812
18,824
18,824
16,2'2
12,031
7,072
7,614
1',833
19,096
1'1,492

Par

.Amo\m.t.

Bald as
SDl:PS*·
3,520

982
2,331
474
133
1,410
7,227
2,897
4,300
4,086
5,806
836
34,002

Par CDOUnta are as of Mguat 1', ~001 •
Par aJDo'U:Ata are as o£ kgust 1.3 1 2001.

~ Clifference »etwaen t.be par amoazlt outatandiDQ and the par IImow:u:
privately heleS is the par ~t of tl:aos. i5811es halcl by the Fecle:al
lteserve B)"atea.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR IMMEDIATE RELEASE
August 16,2001

Contact: Office of Financing
202-691-3550

TREASURY'S INFLATION-INDEXED SECURITIES
SEPTEMBER REFERENCE CPI NUMBERS AND DAILY INDEX RATIOS
Public Debt announced today the reference Consumer Price Index (CPI) numbers and daily
index ratios for the month of September for the following Treasury inflation-indexed securities:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)

3-3/8% 10-year notes due January 15, 2007
3-5/8% 5-year notes due July 15,2002
3-5/8% 10-year notes due January 15,2008
3-5/8% 30-year bonds due April 15, 2028
3-7/8% 10-year notes due January 15,2009
3-7/8% 30-year bonds due April 15, 2029
4-114% 10-year notes due January 15,2010
3-112% 10-year notes due January 15,2011

This information is based on the non-seasonally adjusted U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
In addition to the publication of the reference CPI's (Ref CPI) and index ratios, this release
provides the non-seasonally adjusted CPI-U for the prior three-month period.
This information is available through the Treasury's Office of Public Affairs automated fax
system by calling 202-622-2040 and requesting document number 557. The information is also available
on the Internet at Public Debt's website (http://www.publicdebttreas.gov).
The information for October is expected to be released on September 18, 2001.
000

Attachment
PO-557
http://www.publicdebt.treas;gov

TREASURY INFLATION·INDEXED SECURITIES
Ref CPI and Index Ratios for
September 2001
---

Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):

3-3/8% 10-Year Notes
Series A-2007
9128272M3
January 15, 1997
February 6, 1997
April 15, 1997

3-5/8% 5-Year Notes
Series J-2002
9128273A8
July 15, 1997
July 15, 1997
October 15, 1997

3-5/8% 10-Year Notes
Series A-2008
9128273T7
January 15, 1998
January 15, 1998
October 15, 1998

3-5/8% 30-Year Bonds
Bonds of April 2028
912810FD5
April 15, 1998
April 15, 1998
July 15, 1998

Maturity Date:
Ref CPI on Dated Date:

January 15, 2007
158.43548

July 15, 2002
160.15484

January 15, 2008
161.55484

April 15, 2028
161.74000

Date
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001

CPI-U (NSA) for:

Ref CPI

Index Ratio

178.00000
177.98333
177.96667
177.95000
177.93333
177.91667
177.90000
177.88333
177.86667
177.85000
177.83333
177.81667
177.80000
177.78333
177.76667
177.75000
177.73333
177.71667
177.70000
177.68333
177.66667
177.65000
177.63333
177.61667
177.60000
177.58333
177.56667
177.55000
177.53333
177.51667

1.12349
1.12338
1.12328
1.12317
1.12306
1.12296
1.12285
1.12275
1.12264
1.12254
1.12243
1.12233
1.12222
1.12212
1.12201
1.12191
1.12180
1.12170
1.12159
1.12149
1.12138
1.12128
1.12117
1.12107
1.12096
1.12086
1.12075
1.12065
1.12054
1.12044

1.11142
1.11132
1.11122
1.11111
1.11101
1.11090
1.11080
1.11070
1.11059
1.11049
1.11038
1.11028
1.11018
1.11007
1.10997
1.10986
1.10976
1.10966
1.10955
1.10945
1.10934
1.10924
1.10913
1.10903
1.10893
1.10882
1.10872
1.10861
1.10851
1.10841

1.10179
1.10169
1.10159
1.10148
1.10138
1.10128
1.10117
1.10107
1.10097
1.10086
1.10076
1.10066
1.10056
1.10045
1.10035
1.10025
1.10014
1.10004
1.09994
1.09983
1.09973
1.09963
1.09952
1.09942
1.09932
1.09921
1.09911
1.09901
1.09890
1.09880

1.10053
1.10043
1.10033
1.10022
1.10012
1.10002
1.09991
1.09981
1.09971
1.09960
1.09950
1.09940
1.09930
1.09919
1.09909
1.09899
1.09888
1.09878
1.09868
1.09857
1.09847
1.09837
1.09826
1.09816
1.09806
1.09796
1.09785
1.09775
1.09765
1.09754

May 2001

177.7

June 2001

178.0

July 2001

177.5

TREASURY INFLATION·INDEXED SECURITIES
Ref CPI and Index Ratios for
September 2001

Security:
Description:
CUSIP Number:
Dated Date:
Original Issue Date:
Additional Issue Date(s):

3·7/8% 10·Year Notes
Series A·2009
9128274Y5
January 15, 1999
January 15, 1999
July 15, 1999

Maturity Date:
Ref CPI on Dated Date:

January 15, 2009
164.00000

Date
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001
2001

CPI·U (NSA) for:

3·7/8% 30·Year Bonds
Bonds of April 2029
912810FH6
April 15, 1999
April 15, 1999
October 15, 1999
October 15, 2000
April 15, 2029
164.39333

4·1/4% 10·Year Notes
Series A·201 0
9128275W8
January 15, 2000
January 18, 2000
July 15, 2000

3·1/2% 10·Year Notes
Series A·2011
9128276R8
January 15, 2001
January 16, 2001
July 16, 2001

January 15, 2010
168.24516

January 15, 2011
174.04516

Ref CPI

Index Ratio

1.08537
1.08526
1;08516
1.08506
1.08496
1.08486
1.08476
1.08465
1.08455
1.08445
1.08435
1.08425
1.08415
1.08404
1.08394
1.08384
1.08374
1.08364
1.08354
1.08343
1.08333
1.08323
1.08313
1.08303
1.08293
1.08283
1.08272
1.08262
1.08252
1.08242

1.08277
1.08267
1.08257
1.08246
1.08236
1.08226
1.08216
1.08206
1.08196
1.08186
1.08176
1.08165
1.08155
1.08145
1.08135
1.08125
1.08115
1.08105
1.08094
1.08084
1.08074
1.08064
1.08054
1.08044
1.08034
1.08023
1.08013
1.08003
1.07993
1.07983

1.05798
1.05788
1.05778
1.05768
1.05758
1.05748
1.05739
1.05729
1.05719
1.05709
1.05699
1.05689
1.05679
1.05669
1.05659
1.05649
1.05639
1.05630
1.05620
1.05610
1.05600
1.05590
1.05580
1.05570
1.05560
1.05550
1.05540
1.05531
1.05521
1.05511

1.02272
1.02263
1.02253
1.02244
1.02234
1.02224
1.02215
1.02205
1.02196
1.02186
1.02177
1.02167
1.02157
1.02148
1.02138
1.02129
1.02119
1.02110
1.02100
1.02090
1.02081
1.02071
1.02062
1.02052
1.02042
1.02033
1.02023
1.02014
1.02004
1.01995

May 2001

177.7

June 2001

178.0

July 2001

177.5

D EPA R T 1\1 E N T

() F

T 1-1 E

T REA SUR Y

NEWS
OFFICE OF PUBUC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C .• 20220. (202) 622-2960

Contact: Betsy Holahan
(202) 622-2960

EMBARGOED UNTIL 4:00 P.M. EDT
August 16, 2001

Rosario Marin Sworn In as 41 st U.S. Treasurer
WASHINGTON, DC - Rosario Marin was sworn in today as the 41 51 U.S. Treasurer by
Treasury Secretary Paul H. O'Neill. She was confirmed by the Senate on Aug. 3, 2001.
As Treasurer, the oldest office in the U.S. government, Marin oversees matters relating to
coinage, currency and the production of other instruments issued by the United States. She
reviews currency issues and redemptions, as well as signs U.S. currency. She also oversees the
U.S. Mint and the Bureau of Engraving and Printing and serves as the National Honorary
Director of the Savings Bonds Program.
"I am pleased to welcome Rosario Marin to this historic role at the Treasury
Department," said Secretary O'Neill. "With her long and distinguished record of public service,
she will be a valuable asset to the Department and the Bush Administration."
Prior to joining the Administration, Marin served as mayor and councilwoman of
Huntington Park, CA. She concurrently worked for AT&T as Public Relations Manager for the
Hispanic Market in the Southern California Region.
Marin previously served as Deputy Director of the Governor's Office of Community
Relations, in Los Angeles, CA, in the administration of former California Governor Pete Wilson.
She also previously served as Assistant Deputy Director of the California State Department of
Social Services; as Chair of the California State Council on Developmental Disabilities; and as
Chief of Legislative Affairs for the California Department of Developmental Services.
Marin is a graduate of California State University in Los Angeles, and of Harvard
University's John F. Kennedy School of Government Programs for Senior Executives in State
and Local Government.
Marin and her husband Alex have three children, Eric, Carmen and Alex.
-30PO-558

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U S. Government Printing Office 1998· 619·559

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

For Immediate Release
August 16,2001

Contact: Tara Bradshaw
(202) 622-2014

WEEK FIVE:
TREASURY TO MAIL OUT 8.219 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.219 million advance payment checks
to taxpayers for more than $3.483 billion in tax relief. These checks will be sent to taxpayers
whose last two digits of their Social Security numbers are 40-49.

Week Five (August 17) Social Security Numbers 40-49
Number of Checks 8.219 million
Amount of Relief $3.483 billion
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Five Week Total
Number of Checks 40.655 million
Amount of Relief $17.197 billion

PO-SS9

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Office: 1998 - 619-559

The Treasury Department will announce every week the number of checks that are being
mailed out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will
be mailed over a ten-week period, according to the last two digits of the taxpayers Social
Security number. Notices from the Internal Revenue Service will inform taxpayers the amount of
their check and when they should expect it have been mailed. Single taxpayers will get a check
up to $300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers
may receive their checks at different times than their neighbors or other family members.
On a joint return, the first number listed will set the mailout time.
If the last two digits of your
Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 - 79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

DEPARTMENT

THE

TREASURY;.',

TREASURY

NEW S

17M')

OFflCg OJ'

Pli8Ll(~

AFFAIRS. 151)Ii 1'lt:NI"tSVI.V,\NL\ ,\\'''NtH;. N.W •• W,\SUlfliGTO:", I).C.- lOU" ••. :!I,:!)

(;ZZ-:!~H,O

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

FOR IMMEDIATE RELEASE
August 16, 2001

TREASURY DEBT BUYBACK OPERATION RESULTS

Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
par of its outstanding issues. A total of 12 issues maturing between February 2015 and
August 2019 were eligible for this operation. The settlement date for this operation will
be August 20, 2001. Summary results of this operation are presented below.
(amounts in millions)

Offers Received (Par Amount):
Offers Accepted (Par Amount) :
Total Price Paid for Issues
(Less Accrued Interest) :
Number of Issues Eligible:
For Operation:
For Which Offers were Accepted:

$10.451
1,750

2,475

12
7

~eighted

Average Yield
of all Accepted Offers (%):

4eighted Average Maturity
for all Accepted Securities (in years):

5.458

15.1

)etails for each issue accompany this release.

PO-560

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

August 16, 2001
TREASURY DEBT BL~BACK OPERATION RESULTS

,aw-cunts ~:" :Tc~:"~~o:,s,

~.~.:-=",,,

ln decimals)

Table I

Coupon
R i! t

Maturity
a
~

(%)

11. 250
10.625
9.875
9.250
7.250
7.500
8.750
8.875
9.125
9.000
8.875
8.125

02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019

Par
Amount
Off ~r~ d

Par
Amount
Accented

1,019
818
765
688
573
607
1,394
780
655
940
1,142
1,071

Highest
Accepted
Price

Weighted
Average
Accepted
~

278
327
25
114
0
0
598
335
0
0
74
0

156.062
150.906
143.812
137.812
N/A
N/A
133.921
135.500
N/A
N/A
136.953
N/A

156.059
150.878
143.812
137.802
N/A
N/A
133.882
135.481
N/A
N/A
136.953
N/A

Weighted
Average
Accepted
Yield

Par Amount
Private1v He1d*

5.358
5.397
5.418
5.444
N/A
N/A
5.503
5.508
N/A
N/A
5.547
N/A

8,963
2,897
4,635
4,661
17,724
17,168
12,890
9,638
5,833
6,734
12,386
16,556

Table II

Coupon
Rate (%)

Maturity
Date

CUSIP
NUlIlber

Lowest
Accepted
Yield

11. 250
10.625
9.875
9.250
7.250
7.50C
8.750
8.875
9.125
9.000
8.875
8.125

02/15/2015
08/15/2015
11/15/2015
02/15/2016
05/15/2016
11/15/2016
05/15/2017
08/15/2017
05/15/2018
11/15/2018
02/15/2019
08/15/2019

912810DPO
912810DS4
912810DT2
912810DV7
912810DW5
912810DX3
912810DY1
912810DZ8
912810EA2
912810EBO
912810EC8
912810ED6

5.358
5.394
5.418
5.443
N/A
N/A
5.500
5.507
N/A
N/A
5.547
N/A

Total Par Amount Offered:
Total Par Amo~~t Accepted:
~ote:

Due to

~Amoun t

0'.1

roundi~g,

~s tandi~g

details may

10,451
1,750
~ot

add to

~otals.

af t er opera tion. Calculated us ing a!:10llr.ts reported on announcement,

D E P .\ R T ~l E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C. • 20220 • (202) 622-2960

EMBARGOED UNTIL 2: 30 P. M.
Augu,st 16, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEBK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $29,000 million to refund $20,956 million of publicly held
bills maturing August 23, 2001, and to raise about $8,044 million of new cash.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $10,634 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders in these auctions or
the 4-week bill auction to be held next week. Amounts awarded to these
accounts will be in addition to the offering amount.

Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction. These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million.
Treas~Direct customers have requested that we reinvest their maturing
holdings of approximately $1,031 million into the 13-week bill and $791
million into the 26-week bill.

The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole psrcentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) •
Details about each of the new securities are given in the attached
offering highlights.
PO-561

000

Attachment

Po,. press ,.eleases, speeches, public schedules and offtcial biographies, call our 24-hour flU line at (202) 622-2040

D EPA R T l\I E N T

() F

THE

T REA SUR Y

NEWS
omCE OF PUBUC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960

Contact Tony Fratto
at 202-622-2960.

For Immediate Release:
Sunday, August 19,2001

Statement of G-7 Finance Ministers
We welcome the progress that has been made in ongoing discussions
between the IMF and Argentina. Weare optimistic about the
prospects for agreement on a program that will help Argentina return
to sustainable economic growth.

PO-562

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office

1998 - 619-559

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS

lREASURY

OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

EMBARGOED UNTIL 11·: 30 A. M.
August 20, 2001

Contact:

Office of Financing
202/691-3550

TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction approximately $13,000 million of 4-week bills
to be issued August 23, 2001.
Tenders for bills to be held on the book-entry records of TreasuryDirect
will not be accepted.
Federal Reserve Banks for their own accounts hold $10,634 million of bills
maturing August 23, 2001, which may be refunded at the highest discount rate of
accepted competitive tenders. These accounts may be awarded 4-week bills in an
amount up to the remaining balance of the $10,634 million not refunded in
today's 13- and 26-week bill auctions. Amounts awarded to these accounts will
be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FIMA) accounts bidding through the Federal Reserve Bank of
New York will be included within the offering amount of the auction. These
noncompetitive bids will have a limit of $200 million per account and will be
accepted in the order of smallest to largest, up to the aggregate award limit
of $1,000 million.
The allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP), if they meet or exceed the reporting
threshold. However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about the new security are given in the attached offering
highlights.
000

PO-563
Attachment
For press releases, speeches, public sch.edules and official biographies, call Ollr 24-hollr fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED AUGUST 23,

2001
August 20, 2001

Offering Amount
Public Offering

$13,000 million
$13,000 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 and multiples ...

28-day bill
912795 HP 9
August 21, 2001
August 23, 2001
September 20, 2001
March 22, 2001
$30,626 million
$1,000

Submission of Bids:
Noncompetitive bids:
Accepted in full up to $1 million at the highest
discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FIMA) bids:
Noncompetitive bids submitted through the Federal Reserve Banks as agents for
FIMA accounts.
Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for
FIMA accounts will not exceed $1,000 million.
A single bid that
would cause the limit to be exceeded will be partially accepted in
the amount that brings the aggregate award total to the $1,000
million limit.
However, if there are two or more bids of equal
amounts that would cause the limit to be exceeded, each will be
prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in
increments of .005%, e.g., 4.215%.
(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 $1 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 Rate ... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
?3.vmen:: ':'er:ns:
By c~arge to a f~ds account at a Federal Reserve Bank
or.. ':'ssue date.

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
August 20, 2001

CONTACT:

Office of Financing
202-691-3550

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
August 23, 2001
February 21, 2002
912795JH5

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.290%

Investment Rate 1/:

3.392%

Price:

98.337

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 26.19%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)

Competitive
Noncompetitive
FIMA (noncompetitive)

22,123,688
1,115,475
50,000

5,216,492

Federal Reserve
$

28,505,655

12,834,632
1,115,475
50,000
14,000,107 2/

23,289,163

SUBTOTAL

TOTAL

Accepted

Tendered

Tender Type

19,216,599

Median rate
3.260%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.230%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 23,289,163/14,000,107 = 1.66
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $860,047,000

?O-564

http://www.publicdebt.treas.gov

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550

CONTACT:

FOR IMMEDIATE RELEASE
August 20, 2001

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
92-Day Bill
August 23, 2001
November 23, 2001
912795HW4

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.330%

High Rate:

Investment Rate 1/:

Price:

3.405%

99.149

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 85.91%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

28,161,358
1,370,139
150,000

15,000,040 2/

29,681,497

SUBTOTAL

TOTAL

4,087,640

Federal Reserve

33,769,137

13,479,901
1,370,139
150,000

19,087,680

Median rate
3.300%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.250%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

29,681,497 / 15,000,040

1.98

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,132,619,000

http://www.publicdebt.treas.gov

0-565

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

u.s. International Reserve Position

8/21/01

u.s.

The Treasury Depanment today released
reserve assets data for the week ending August 17,2001. As indicated in
reserve assets totaled $67,925 million as of August 17,2001, up from $67,059 million as of August 10,
2001.

this table,

u.s.

(in US millions)

I. Official U.S. Reserve Assets

1. Foreign Currency Reserves

a. Securities
Of wnlcn, issuer headquanered in the U. S,
b, Total deposits with:
bJ. Other central banks and BIS
b.ii. Banks headquartered in the U.S.
b,ii. Of which, banks located abroad
b.iii. Banks headquartered outside the U.S,
b,iii, Of which, banks located in the U,S,
2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

5, Other Reserve Assets

August 17, 2001
67,925

August 10. 2001
67,059

TOTAL

Euro
5,417

Yen
10,805

Euro

TOTAL
16,222

5,562

Yen

TOTAL

10,949

9,128

4,678

13,807

9,366

4,741

0
0

15,230

15,393

10,756

10,871

11,044

deposits reflect carrying values.
21 The items, "2, IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for August 10 are final. The entries in the table
above for August 17 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF
data.
31 Gold stock is valued monthly at $42.2222 per fine troy ounce, Values shown are as of June 30,2001, The May 31,2001 value was

PO-566

14,106

$11,044 million.

16,511
0

u.s. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
August 10, 2001

1. Foreign currency loans and securities

August 17, 2001

o
o
o

2. Aggregate short and long positions in forwards and
futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
August 10, 2001

1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
3. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U.S.
3.e. With banks and other financial institutions
headquartered outside the U. S.
4. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

August 17, 2001

o
o

DEPARTMENT

THE

TREASURY

NEWS

'IREASURY

omCE OF PUBliC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C. - 20220 - (202) 622·2960

Contact: Public Affairs
(202) 622-2960

FOR IMMEDIATE RELEASE
August 21, 2001

STATEMENT BY TREASURY SECRETARY PAUL H. O'NEILL
The Administration respects the independence of the Federal Reserve in making
decisions about our nation's monetary policy. We share the Federal Reserve's goals
of maintaining healthy economic growth while preserving low inflation.

-30-

PO-56?

Fur press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office:

1998 - 6Hj-5~~

DEPARTMENT

THE

TREASURY

NEWS
..-

..............

omCE OFPUBUCAFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIllNGTON, D.C. - 20220 - (202) 622-2960

FOR IMMEDIATE RELEASE:
August 21,2001

Contact Michele Davis
or Tony Fratto
at 202-622-2960.

Statement of Treasury Secretary Paul O'Neill on IMF Agreement with Argentina

I welcome the agreement between Argentina and IMF management. This is an important
step as we continue to work toward a sustainable long-term solution to Argentina's economic
problems. A portion of the new program is specifically dedicated to assisting in a voluntary debt
exchange to help make Argentina's fiscal situation more sustainable.
Argentina has taken exceptional steps in enacting a zero deficit law to address its
economic challenges. It is critical that this new law be vigorously implemented, and I applaud
the new measures to buttress its implementation.
Today, in conjunction with these financial efforts, the US Trade Representative Robert B.
Zoellick has issued a statement expressing his interest in pursuing at an early date additional
trade discussions through the "Four-PIus-One" format created in 1991. The purpose ofthis
ministerial level meeting would be to discuss common interests in free trade, including the
launch of a new global trade round through the WTO in November, the Free Trade Area of the
Americas, and bilateral possibilities.
There is much additional work to be done, and we will continue to work with the IMF to
find a way to help Argentina restore growth in its economy.
--30--

PO-568

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Office: 1998 - 619-559

DEPARTMENT

THE

TREASURY

NEWS

OFFICE (H' PUBLIC AFFA IRS -lS()O PENNSYLVANIA AVENUE, N.W. _ WASHIN(;TON, D.C.- 20220 _ (202) 622-2960

EMBARGOED UNTIL 9:00 A.M.
August 22, 2001

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

TREASURY ANNOUNCES DEBT BUYBACK OPERATION
On August 23, 2001, the Treasury will buy back up to $1,750 million par
of its outstanding issues that mature between February 2019 and February 2023.
Treasury reserves the right to accept less than the announced amount.
This debt buyback (redemption) operation will be conducted by Treasury's
Fiscal Agent, the Federal Reserve Bank of New York, using its Open Market
operations system. Only institutions that the Federal Reserve Bank of New
York has approved to conduct Open Market transactions may submit offers on
behalf of themselves and their customers. Offers at the highest accepted
price for a particular issue may be accepted on a prorated basis, rounded up
to the next $100,000. As a result of this rounding, the Treasury may buy
back an amount slightly larger than the one announced above.
This debt buyback operation is governed by the terms and conditions set
forth in 31 CFR Part 375 and this announcement.
The debt buyback operation regulations are available on the Bureau of
the Public Debt's website at www.publicdebt.treas.gov.
Details about the operation and each of the eligible issues are given
in the attached highlights.
000

Attachment

PO-569

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY DEBT BUYBACK OPERATION
August 22, 2001
Par amount to be bought back .... Up to $1,750 million
Operation date . . . . . . . . . . . . . . . . . . August 23, 2001
Operation close time ...•........ 11:00 a.m. eastern daylight saving time
Settlement date . . . . • . . . . . . . . . . . . August 27, 2001
Minimum par offer amount . . . . . . . . $100,000
MUltiples of par . . . . . . . . . . . . . . . . $100,000
Format for offers ..... Expressed in terms of price per $100 of par with
three decimals. The first two decimals represent
fractional 32 nds of a dollar.
The third decimal
nd
represents eighths of a 32
of a dollar, and must
be a 0, 2, 4, or 6.
Delivery instructions . . . . . . . . . . . ABA NUmber 021001208 FRB NYC/CUST
Treasury issues eligible for debt buyback operation (in millions):

Coupon
Rate (%)
8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
7.125

Maturity
Date
02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
02/15/2023

CUSIP
Number
912810 EC
912810 ED
912810 EE
912810 EF
912810 EG
912810 EH
912810 EJ
912810 EK
912810 EL
912810 EM
912810 EN
912810 EP
Total

8
6
4
1
9
7
3
0
8
6
4

Par Amount
Outstanding*
14,759
19,096
9,808
8,067
17,935
10,218
10,244
10,117
30,897
10,238
7,784
16,298
165,461

Par Amount
Privately
Held*
12,386
16,556
8,322
6,566
15,392
9,111
8,626
8,459
27,234
9,250
6,183
13,663
141,748

Par Amount
Held as
STRIPS**
5,724
877
1,929
5,037
9,282
903
3,707
1,463
16,562
1,080
3,043
6,287
55,894

* Par amounts are as of August 21, 2001.
** Par amounts are as of August 20, 2001.
The difference between the par amount outstanding and the par amount
privately held is the par amount of those issues held by the Federal
Reserve System.

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

F or Immediate Release
August 22, 2001

Contact: Tara Bradshaw
(202) 622-2960

O'NEILL STATEMENT ON THE MID-SESSION BUDGET REVIEW
Treasury Secretary PaulO 'Neill made the following statement on the Mid-Session
Budget Review:
Today's report confirms that this year the federal government will enjoy the second
largest surplus in U.S. history. And by cutting taxes, we've taken steps to boost our economy
and ensure that large federal surpluses continue for years to come, so long as Congress works
with the President to rein in wasteful spending.

-30-

PO-S70

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Pnnt,ng Off,ce:

1998 - 619-559

OFFICE OF PUBLIC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.' WASHINGTON, D.C.' 20220. (202) 622.2960

EMBARGOED UN.TIL 2: 30 P.M.
August 22, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY TO AUCTION $14,000 MILLION OF 2-YEAR NOTES
The Treasury will auction $14,000 million of 2-year notes to refund $28,397
million of publicly held notes maturing August 31, 2001, and to pay down about
$14,397 million.
In addition to the public holdings, Federal Reserve Banks hold $5,722 million
of the maturing notes for their own accounts, which may be refunded by issuing
an additional amount of the new security.
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FIMA) accounts bidding through the Federal Reserve Bank of New
York will be included within the offering amount of the auction.
These
noncompetitive bids will have a limit of $200 million per aCCOlll\t and will be
accepted in the order of smallest to largest, up to the aggregate award limit of
$1,000 million.

TreasuryDirect customers requested that we reinvest their maturing holdings
of approximately $729 million into the 2-year note.
The auction will be conducted
tive ar.d noncompetitive awards will
tenders.
The allocation percentage
be rounded up to the next hundredth

in the single-price auction format. All competibe at the highest yield of accepted competitive
applied to bids awarded at the highest yield will
of a whole percentage point, e.g., 17.13%.

The notes being offered today are eligible for the STRIPS program.
This offering of Treasury securities is governed by the terms and conditions
set forth in the Uniform Offering Circular for the Sale and Issue of Marketable BookEntry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as amended).
Details about the new security are given in the attached offering highlights.

PO-571
000

Attachment

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
2-YEAR NOTES TO BE ISSUED AUGUST 31, 2001

August 22, 2001
Offering Amount
~·Ll!)J.~C

U:t!:2r~ng

$14,000 million
$14,000 million

Description of Offering:
Term and type of security . . . . . . . . . . . . . . . . . . . . .
Series. . . . . . . . . .
. .........................
CUSIP number
..........................
Auct~on date.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dated date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2-year notes
T-2003
912827 7C 0
August 29, 2001
August 31, 2001
August 31, 2001
August 31, 2003
Determined based on the highest
accepted competitive bid
Yi""ld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
Interest payment dates . . . . . . . . . . . . . . . . . . . . . . . . February 28 and August 31
Mlnimum bid amount and multiples .............. $1,000
Accrued interest payable by investor .......... None
Premium or discount . . . . . . . . . . . . . . . . . . . . . . . . . . . Determined at auction
STRIPS Information:
Mlnimum amount required . . . . . . . . . . . . . . . . . . . . . . . $1,000
Corpus CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . 912820 GM 3
Due date(s) and CUSIP number(s)
for additional TINT(s) . . . . . . . . . . . . . . . . . . . . . . August 31, 2003 - - 912833 YB 0
Subreission of Bid$:
Noncompetitive bids:
Accepted in full up to $5 million at the highest accepted yield.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids
submitted through the Federal Reserve Banks as agents for FIMA accounts.
Accepted in order of size from smallest to largest with no more than $200
million awarded per account.
The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FIMA accounts will not exceed $1,000 million. A
single bid that would cause the limit to be exceeded will be partially accepted
in the amount that brings the aggregate award total to the $1,000 million limit.
However, if there are two or more bids of equal amounts that would cause the
limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a yield with three decimals, e.g., 7.123%.
(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 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 daylight saving time on auction day.
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day.
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date,
or payment of full par amount with tender.
TreasuryDirect customers can~use the Pay
D~rect feature which authorizes a charge to their account of record at their
financ~al inst~tution on issue date.

DEPARTMENT

THE

'IREASURY

TREASURY

NEWS

OFFICE OF PUBUC AFFAIRS -1500 PENNSYLVANIA AVENUE, N.W. - WASIDNGTON, D.C. - 20220 - (202) 622-2960

For Immediate Release
August 23,2001

Contact: Tara Bradshaw
(202) 622-2014

WEEK SIX:
TREASURY TO MAIL OUT 8.266 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.266 million advance payment checks
to taxpayers for more than $3.550 billion in tax relief. These checks will be sent to taxpayers
whose last two digits oftheir Social Security numbers are 50-59.
Week Six (August 24) Social Security Numbers 50-59
Number of Checks 8.266 million
Amount of Relief $3.550 billion
Week Five (August 17) Social Security Numbers 40-49
Number of Checks 8.219 million
Amount of Relief $3.483 billion
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Six Week Total
Number of Checks 48.921 million
Amount of Relief $20.747 billion
PO-S72

FM" press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·u.s. Government Printing Office

1998 - 619-559

The Treasury Department will announce every week the number of checks that are being
mailed out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will
be mailed over a ten-week period, according to the last two digits of the taxpayers Social
Security number. Notices from the Internal Revenue Service will inform taxpayers the amount of
their check and when they should expect it have been mailed. Single taxpayers will get a check
up to $300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers
may receive their checks at different times than their neighbors or other family members.
On a joint return, the first number listed will set the mailout time.
If the last two digits of your
Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 -79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

DEPARTMENT

THE

TREASURY

NEWS

TREASURY

OFFICE OF PUBLIC AFFAIRS _ 1500 PENNSYLVANIA AVENUE, N.W. - WASHINGTON, D.C.- 20220 - (202) 622-2960

CONTACT:

EMBARGOED UNTIL 2: 30 P.M.
August 23, 2001

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction two series of Treasury bills totaling
approximately $28,000 million to refund $31,356 million of publicly held 13-,
26-, and 52-week bills maturing August 30, 2001, and to pay down approximately
$3,356 million.
There are also $10,000 million of publicly held maturing 4week bills, the disposition of which will be announced Monday, August 27,
2001.
In addition to the public holdings, Federal Reserve Banks for their own
accounts hold $12,845 million of the maturing bills, which may be refunded at
the highest discount rate of accepted competitive tenders in these auctions or
the 4-week bill auction to be held Tuesday, August 28, 2001. Amounts awarded
to these accounts will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction.
These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million.
TreasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $1,019 million into the 13-week bill and $929
million into the 26-week bill.

000

Attachment
For press releases, speeches, public schedules and official biographies, call our 24-llOur fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED AUGUST 30, 2001
August 23, 2001
Offering Amount
Public Offering

$15,000 million
$15,000 million

$13,000 million
$13,000 million

Description of Offering:
Term and type of security
CUSIP nwnber
Auction date .
Issue date ...
Maturity date
Original issue date ...
Currently outstanding .
Minimum bid amount and multiples

91-day bill
912795 HM 6
August 27, 2001
August 30, 2001
November 29, 2001
November 30, 2000
$26,367 million
$1,000

182-day bill
912795 HJ 3
August 27, 2001
August 30, 2001
February 28, 2002
March 01, 2001
$12,763 million
$1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FlMA) bids:
Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FlMA accounts.
Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FlMA accounts will not exceed $1,000 million.
A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate award
total to the $1,000 million limit.
However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%,
7.105%.
(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 $1 billion or greater.
(3) Net long position must be uetermined as of one half-hour prior to the closing time for receipt of
competitive tenders.
Maximum Recognized Bid at a Single Rate .... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders ... Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders . . . . . . Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
TreasuryDirect customers can use the Pay Direct feature which authorizes a charge
to their account of record at their financial institution on issue date.

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASIflNGTON, D.C.• 20220. (202) 622-2960

FOR rMMEDIATE RELEASE
August 23, 2001

PUBLIC CONTACT: Office of Financing
202-691-3550
MEDIA CONTACT: Office of Public Affairs
202-622-2960

TREASURY DEBT BUYBACK OPERATION RESULTS

Today, Treasury completed a debt buyback (redemption) operation for $1,750 million
par of its outstanding issues. A total of 12 issues maturing between February 2019 and
February 2023 were eligible for this operation. The settlement date for this operation will
be August 27, 2001. Summary results of this operation are presented below.
(amounts in millions)

Offers Received (Par Amount) :
Offers Accepted (Par Amount) :
Total Price Paid for Issues
(Less Accrued Interest):
of Issues Eligible:
For Operation:
For Which Offers were Accepted:

$6,764
1,750

2,364

~umber

Weighted Average Yield
of all Accepted Offers (%):
Weighted Average Maturity
for all Accepted Securities (in years) :

12
10

5.490

18.4

Details for each issue accompany this release.

0-574

For press releases. speeches, public schedules and official biographies. call ollr 24-hollr fax: line at (202) 622-2040

August 23, 2001
TREASURY DEBT BUYBACK OPERATION RESULTS

(amounts ln mllllons, prices in decimals)
Table I

Coupon
Rate (%)

Maturity
Da t e

Par
Amount
Off ere d

Par
Amount
Acceoted

Highest
Accepted
Price

Weighted
Average
Accepted
Price

8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
7.125

02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
02/15/2023

1,317
481
162
344
777
182
496
711
1,169
143
527
456

1,014
80
27
10
211
0
25
50
200
0
37
96

138.000
129.843
134.609
137.765
138.015
N/A
131.117
131.312
129.976
N/A
126.000
119.796

137.953
129.834
134.568
137.765
137.993
N/A
131.117
131. 297
129.960
N/A
125.991
119.761

Weighted
Average
Accepted
Yield

Par Amount
Private1v He1d*

5.473
5.492
5.497
5.494
5.498
N/A
5.515
5.519
5.521
N/A
5.529
5.540

11,372
16,476
8,295
6,556
15,181
9,111
8,601
8,409
27,034
9,250
6,146
13,567

Table II

Coupon
Rate (%)

Maturity
Date

CUSIP
Number

Lowest
Accepted
Yield

8.875
8.125
8.500
8.750
8.750
7.875
8.125
8.125
8.000
7.250
7.625
7.125

02/15/2019
08/15/2019
02/15/2020
05/15/2020
08/15/2020
02/15/2021
05/15/2021
08/15/2021
11/15/2021
08/15/2022
11/15/2022
02/15/2023

912810EC8
912810ED6
912810EE4
912810EF1
912810EG9
912810EH7
912810EJ3
912810EKO
912810EL8
912810EM6
912810EN4
912810EP9

5.470
5.491
5.493
5.494
5.497
N/A
5.515
5.518
5.520
N/A
5.528
5.537

Total Par Amount Offered:
Total Par Amount Accepted:

6,764
1,750

Note: Due to rounding, details may not add to totals.
-Amount outstanding after operation. Calculated using amounts reported on announcement.

D E P :\ R T \. E N T

() F

T I-J E

T REA SUR Y

1789

OmCE OF PUBUC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C .• 20220. (202) 622-2960

EMBARGOED FOR 9:30 PM
August 24, 2001

Contact: Tasia Scolinos
(202) 622-2960

Treasury Under Secretary for Enforcement Jimmy Gurule Addresses the Hispanic
American Police Commanders Association

Good evening, it is an honor to be here tonight to address the Hispanic American Police
Commanders Association. I am especially pleased to be here in my new role as Treasury's
Under Secretary for Enforcement. It is especially appropriate that my first speech as Under
Secretary is before HAPCOA because I believe that Hispanic law enforcement has played a
unique and pivotal role over the course of my career. When I was thinking about what I wanted
to say tonight two experiences kept coming to the forefront of my mind. I would like to share
both of those stories with you tonight.
I was fortunate enough to land at the Department of Justice as a prosecutor upon my graduation
from law school. There was an acute shortage of lawyers, judges, and other law enforcement
personnel in the city of Miami due to a high volume of narcotics cases that were being processed
through the system there at the time. It was during this climate that the Justice Department
assigned me to Miami as a young prosecutor. I had only been on the job for a few weeks when a
young Hispanic ATF agent came to see me. He was involved in an undercover operation at the
time involving the sale of drugs for guns. As many of you in this room know, there are specific
legal requirements that must be in place before an undercover operation can proceed. The agent
and I discussed different ways of structuring the undercover investigation that he was embarking
on to ensure that it was within the scope of the law. Time went on and I slowly lost track ofthe
ATF agent and his investigation. Some time later I was transferred out of Miami and shortly
upon entering my new post heard a tragic story about a young Hispanic ATF agent. The agent
had been working undercover when the operation somehow went awry and the cartel discovered
his true identity. I was deeply saddened to learn that the agent murdered by the drug cartel was
the same young Hispanic agent I had worked with when I was in Miami. It is fitting that today
ATF headquarters in Washington is housed in a building named in honor of that young Hispanic
agent who lost his life in the line of duty -- Agent Ariel Rios.

This incident was a turning point for me as a prosecutor in that it caused me to appreciate first
hand the daily sacrifices involved with being a law enforcement officer. As my career
progressed I worked with several different law enforcement agents -- the sacrifice that Agent
PO-575

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

Rios made in the war against drugs and violence was never far from my mind in my dealings
with them. As most of you know, in my new role as Under Secretary for Enforcement I am
tasked with providing policy guidance and oversight to the Bureau of Alcohol, Tobacco and
Firearms among the other Treasury law enforcement components. It is a special privilege for me
to be able to do that given the respect and gratitude I feel for federal agents like Ariel Rios who
have made the ultimate sacrifice for his country and his community. It is my goal as Under
Secretary to convey to our law enforcement agents around the country that their sacrifices are
appreciated and valued by both the United States government and the citizens of this country.
The second experience took place when I was an Assistant U.S. Attorney in Los Angeles during
the mid-eighties. One of my prosecutor colleagues and a DEA agent came to talk to me about
a case involving the torture-murder of a DEA agent. During the three hours that we spent
together I heard the details of the agent's story - about how he was about to be transferred from
Guadalajara to San Diego when he was killed. About how he was en route to meet his wife for
lunch to discuss the details of the move when he was kidnapped in broad daylight by members of
one of the drug cartels and local police officers. This meeting was just the beginning of my
involvement with the DEA agent's case. Little did I know that my involvement with his case
would become life changing for me. I invested three years of my legal career in that investigation
and ultimately was the lead trial attorney in the first murder trial which resulted in the conviction
of the three defendants for the kidnapping, torture and murder of DEA agent Enrique ("Kiki)
Camarena. For the second time in my career, I was faced with a Hispanic federal law
enforcement agent who made the ultimate sacrifice for his country and the safety of its citizens.
Now that you all know a little bit more about me and my previous interactions with Hispanic law
enforcement agents, you can understand what an honor it is for me to be able to be with you all
tonight.
I do want to talk a little bit about the role of Under Secretary for Enforcement at the Treasury
Department and outline what I hope to accomplish during my tenure there. First, I need to begin
by saying that I am grateful to President Bush and Secretary O'Neill for the opportunity to serve
at the Treasury Department as Under Secretary for Enforcement. As I mentioned earlier, I have
the privilege of overseeing Treasury's law enforcement bureaus and offices -- the U.S. Customs
Service, U.S. Secret Service, Bureau of Alcohol, Tobacco and Firearms, Federal Law
Enforcement Training Center, Financial Crimes Enforcement Network, and the Office of Foreign
Assets Control. In addition, my office provides policy guidance to Internal Revenue Service Criminal Investigation. Together, these bureaus and offices have both enforcement and
regulatory missions, employ over 33,000 people, and have a budget in excess of $4 billion.
The breadth of their jurisdictions is equally impressive. Treasury law enforcement protects our
borders and our President. We enforce U.S. sanctions and the tax laws. We combat money
laundering and reduce gun violence.

The United States Customs Service
With its unique border search authority, Customs investigates a wide range of crimes, including
trafficking in drugs, child pornography, and weapons of mass destruction, customs frauds, and
money laundering. Customs has also established the Cyber Smuggling Center to protect our
electronic border. At the Cyber Smuggling Center, Customs brings together all of its assets
dedicated to the investigation of international crime conducted on or facilitated by the Internet.
The United States Secret Service
The Secret Service's mission extends far beyond protecting our leaders. They continue to pursue
their original mission -- combating counterfeit currency. They also investigate credit card and
access device fraud as well as identity theft. In addition, the Secret Service, working with other
federal, state and local agencies, is planning the security for the upcoming IMFIWorld Bank
meeting to be held in October 2001 in Washington, D.C. and the 2002 Winter Olympics in Salt
Lake City.
Bureau of Alcohol, Tobacco and Firearms
Treasury is also home to the Bureau of Alcohol, Tobacco and Firearms (ATF). ATF's top
priority is protecting our communities from violent crime. In addition to its firearms enforcement
efforts, ATF also has expertise in bombings and arsons. ATF's four National Response Teams
(NRT) are the only national teams that respond to explosives and arson incidents. ATF has made
significant contributions to the investigation of the bombings at the Atlanta Olympics, Oklahoma
City's Murrah Federal Building, and New York's World Trade Center.
Federal Law Enforcement Training Center
The Treasury law enforcement bureau this audience may be most familiar with is the Federal
Law Enforcement Training Center. Many of you have spent time at FLETC's facilities. In fact,
FLETC trains more than 20,000 students a year from more than 70 federal participating
organizations. In addition, in response to growing concerns about international crime, FLETC
has entered into an arrangement with the State Department to provide specialized training for
foreign law enforcement agencies, and conducts training at the International Law Enforcement
Academies (ILEAs) in Budapest, Hungary, and Bangkok, Thailand.
Financial Crimes Enforcement Network
As the guardian of the nation's financial system, one of Treasury's top law enforcement
priorities is preventing and detecting money laundering. FinCEN aids in this fight against money
laundering with regulatory, enforcement, and international initiatives.

OFAC
The Office of Foreign Assets Control is responsible for implementing sanctions against nations
determined to be a threat to the national security, economy or foreign policy of the United States,
pursuant to the International Emergency Economic Powers Act (IEEP A), including sanctions
aimed at terrorists and narcotics kingpins.
Although the Treasury bureaus have a broad law enforcement mission, I plan to focus my efforts
on three areas in particular: enhancing counter-money laundering efforts, improving cooperation
with Mexico, and maintaining public trust.
Money Laundering
Law enforcement faces enormous challenges in its efforts to combat money laundering. Money
laundering is often committed by professionals such as lawyers, bankers, and accountants, who
develop ingenious schemes to conceal the movement of criminal proceeds and create the
appearance that they are derived from legitimate sources. Complicating matters is the fact that
increasingly money laundering is a problem of global concern. Criminals target foreign
jurisdictions with liberal bank secrecy laws and weak anti-money laundering regulatory regimes
as they transfer illicit funds through domestic and international financial institutions often with
the speed and ease of faceless Internet transactions. The international nature of money
laundering requires international law enforcement cooperation to successfully investigate and
prosecute those that instigate these complex criminal schemes.
To respond to the money laundering threat, the Treasury Department is statutorily required to
develop, in cooperation with other agencies, an annual National Money Laundering Strategy. In
keeping with the Administration's policies, this year's Strategy will respond to the challenges of
anti-money laundering enforcement by providing a comprehensive plan to disrupt and dismantle
criminal enterprises and prosecute professional money launderers through aggressive
enforcement, measured accountability, preventative efforts, and enhanced coordination. We are
currently in the process of putting the final touches on the Strategy, and we expect to release it in
September.
I believe that it is critical to focus law enforcement's efforts on the prosecution of major money
laundering organizations and systems. Federal efforts must be allocated where they can do the
most good -- in high-risk areas -- and target major money laundering systems. Moreover,
effective money laundering enforcement requires us to use all available statutory authorities.
Prosecuting money launderers and other criminals is not enough. We must strip criminals of
their ill-gotten gains and dismantle criminal organizations by attacking their financial base
through aggressive, appropriate use of forfeiture.
Focusing our domestic attac!<:, however, will not -- on its own -- be enough. Drug traffickers and
other criminal organizations will continue to search for the path of least resistance to launder
their money. Thus, no country's individual efforts -- whether in the legal, regulatory, or law
4

enforcement arena -- will be sufficient given the relative ease with which money flows across
borders.
In this regard, important strides have been made through multilateral initiatives. Chief among
those has been the work of the Financial Action Task Force, or "FATF", an independent
international body with twenty-nine member countries. When FATF listed fifteen jurisdictions
as non-cooperative in the fight against money laundering in June 2000, it marked a milestone in
our international effort. The FATF listing focused attention on the issue and for many of those
named countries, it turned their attention into productive actions to address the deficiencies that
the F ATF identified.

As we work at home and abroad to enhance our counter-money laundering efforts, we must be
able to measure the effectiveness of those efforts so that we can be fully accountable to the
American people. Our focus must be on results not merely enforcement activities. We have to
do better, and we will do better, in measuring the results of our anti-money laundering activity.

Mexico
An important international partner in our efforts to combat money laundering as well as its
predicate crimes will be the Government of Mexico. Indeed, I agree with the Attorney General's
assessment that we have no more important law enforcement relationship than our relationship
with Mexico. The importance of this relationship is reflected in President Bush's decision to
have President Fox be the guest of honor at his first state dinner in September.
I believe that we have a unique opportunity to improve our relationship with Mexican law
enforcement, providing a real benefit to the American pUblic. Close cooperation with Mexico
will enable us to better attack drug trafficking, money laundering, and other crimes. As a
Hispanic of Mexican descent, I am personally very passionate about the possibility of making
communities on both sides of the border safer through ongoing cooperation and open dialogue.
One area where we have recently made progress is in fighting gun violence. For some time,
Mexico has expressed concern about the illegal trafficking of firearms into Mexico from the
United States. Keeping guns out of the hands of criminals is a priority for both governments.
During his recent visit to Mexico, Attorney General Ashcroft announced a program to work with
our Mexican partners to combat the problem of illegal firearms trafficking into Mexico. As the
Attorney General noted at the time, ATF will playa critical role in this effort. Specifically, we
have agreed that when guns of suspected U.S. origin are seized in Mexico, the Mexican
authorities will provide the technical information concerning the gun - make, model, serial
number - to ATF. ATF then will work to trace the weapon, and provide timely feedback to
Mexican authorities. U.S. and Mexican agents will then work closely together to fully support

any resulting investigations. ATF and Customs are currently executing an initial "pulse and
surge" operation - Operation Windfall - to test the concept.
Importantly, Attorney Generals Ashcroft and Macedo de la Concha have committed to dedicate
the prosecutors needed to pursue any resulting cases and bring them to successful conclusion.
We will continue to work with our colleagues at the Department of Justice as well as our
Mexican partners to address this issue.
Law Enforcement and Public Trust
Finally, I want to close my remarks today by expressing my concern over the decreasing level of
trust the public expresses for law enforcement. When I was a prosecutor in Los Angeles several
years ago, if you put a law enforcement officer on the witness stand he was cloaked with the
presumption of truth. Today, sadly, in many communities this is no longer the case. Allegations
of mismanagement at a leading law enforcement agency, charges of state and local police
departments engaging in racial profiling, and the excessive use of force by some law
enforcement personnel has shaken the public's confidence and trust in law enforcement.
Unfortunately the actions of a few have tainted the reputation of good, honest and hard working
law enforcement officers who are dedicated to their work.
Without the confidence of the communities we serve, we cannot effectively do our jobs. As
Under Secretary ofthe Treasury for Enforcement, my highest priority is maintaining and
strengthening our relationship with the American people. But more than that, my goal is for
Treasury agencies to serve as an example for all of law enforcement.
I believe that the Customs Service's response to public concerns regarding its personal search
procedures is a useful example. When allegations were made that some Customs Service officers
were selecting passengers for personal search based on race or gender, the Customs Service
responded quickly and appropriately. By doing so, Customs was able to take control of the issue
and turn it into an opportunity for the Customs Service to do its mission even more effectively.
Just as importantly, its quick response ensured that the Customs Service retained the confidence
of the traveling pUblic.
The results have been impressive. The Customs Service is searching fewer people and seizing
more drugs. The statistics indicate that Customs is searching fewer innocent travelers of all races
and genders, while doing a better job of catching those carrying contraband. As Under Secretary,
I am committed to ensuring that Treasury law enforcement continues to be responsive to the
American public.
There are approximately 740,000 sworn law enforcement officers currently serving in the United
States. Every day you courageously serve and protect the safety and welfare of all Americans.
You are motivated by your own personal sense of good will and responsibility and not by a
desire for praise, recognition, or glory.

Oftentimes the general public is unaware of the enormous risks that you take every day. Since
the first recorded police death in 1794, there have been more than 15,000 law enforcement
officers killed in the line of duty in the United States.
In the past 10 years alone, over 1,500 law enforcement officers have died in the line of duty.
These fallen officers leave behind wives, children, other family members, and friends as a result
of their dedication to law enforcement and to the public they serve.

As I serve at the Department of the Treasury as the Under Secretary of Enforcement I aim to
honor the memories of officers like "Kiki" and Ariel not just on occasions such as today, but
every day. I will never forget these officers who made the ultimate sacrifice with their lives in
service to the people of this great Nation.
I want to thank all of you here tonight and HOPCOA for inviting me to speak to you tonight, I
am truly honored. I know that all of you here today make tremendous sacrifices, at times you
may feel under appreciated and I want to leave with this, "Thank you". "Gracias" for making
our communities safer places to live. You are all American heroes and Secretary O'Neill joins
me in thanking you for all that you do in service of your community and your country. The
President of the United States, George W. Bush is also well aware of the sacrifices and
responsibilities that you and your families take on. Please know that you are in their thoughts
and prayers and on their behalf I'd like to thank you. Muchisimas gracias. Que dios te bendiga.
May God Bless You.

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS .1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

Contact: Office of Public Mfairs
(202) 622-2960

FOR IMEDIATE RELEASE
August 27,2001
MEDIA ADVISORY

Treasury Under Secretary for Enforcement Jimmy Gurule will tour the Port of Otay
Mesa, East Cargo Lot, North Dock Area in San Diego, CA on Tuesday, August 28,2001, 11:30
a.m., PST. As a newly confirmed appointee, Mr. Gurule will be the first Treasury Department
official of the new Administration to visit the Southwest border. Mr. Gurule will be touring and
talking with inspectors at both San Ysidro and Otay Mesa. After touring the Otay Mesa facility,
he will be available for a few minutes to answer questions from the press.
For additional information about the event, please contact Tasia Scolinos of Treasury Public
Mfairs on (949) 278-7892 or Vince Bond of the U.S. Customs Public Affairs on (619) 557-5772.
-30-

PO-576

F(1I' press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040
·U.S. Government Printing Office: 1998 - 619-559

DEPARTMENT

THE

TREASURY

NEWS

OFFICE OF PUBLIC AFFAIRS. 1500 PENNSYLVANIA AVENUE, N. W.• WASHINGTON, D.C .• 20220. (202) 622-2960

EMBARGOED UNTIL 11: 30 A.M.
August 27, 2001

Contact:

Office of Financing
202/691-3550

TREASURY OFFERS 4-WEEK BILLS
The Treasury will auction $14,000 million of 4-week Treasury bills to
refund an estimated $10,000 million of publicly held 4-week Treasury bills
maturing August 30, 2001, and to raise new cash of approximately $4,000
million.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDirect will not be accepted.
The Federal Reserve System holds $12,845 million of the Treasury bills
maturing on August 30, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders in this auction up to the balance of the amount not awarded in today's
13-week and 26-week Treasury bill auctions. Amounts awarded to the SOMA
account will be in addition to the offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International
Monetary Authority (FIMA) accounts bidding through the Federal Reserve Bank of
New York will be included within the offering amount of the auction. These
noncompetitive bids will have a limit of $200 million per account and will be
accepted in the order of smallest to largest, up to the aggregate award limit
of $1,000 million.
Th~

allocation percentage applied to bids awarded at the highest discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
Note: Competitive bidders in 4-week bill auctions will be required to
report their net long position (NLP) , if they meet or exceed the reporting
threshold.
However, Treasury will not include NLPs in the calculation of award
limits for those bidders.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about the new security are given in the attached offering
highlights.
000

Attachment
For press releases, speeches, public schedules and official biographies, call our 24-ltour fax line at (202) 622-2040

PO .. ·577

HIGHLIGHTS OF TREASURY OFFERING
OF 4-WEEK BILLS TO BE ISSUED AUGUST 30, 2001
August 27, 2001
Offering Amount . . . . . . . . . . . . . . . . . . . . . $14,000 million
Public Offering . . . . . . . . . . . . . . . . . . . . . $14,000 million
Description of Offering:
Term and type of security ........... 28-day bill
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . 912795 HQ 7
Auction date . . . . . . . . . . . . . . . . . . . . . . . . August 28,2001
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . August 30,2001
Maturity date . . . . . . . . . . . . . . . . . . . . . . . September 27, 2001
Original issue date . . . . . . . . . . . . . . . . . March 29,2001
Currently outstanding . . . . . . . . . . . . . . . $32,366 million
Minimum bid amount and multiples .... $1,000
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest
discount rate of accepted competitive bids.
Foreign and International Monetary Authority (FIMA) bids: Noncompetitive bids submitted through the Federal Reserve Banks as agents for
FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal Reserve Banks as agents for
FIMA accounts will not exceed $1,000 million. A single bid that
would cause the limit to be exceeded will be partially accepted in
the amount that brings the aggregate award total to the $1,000
million limit.
However, if there are two or more bids of equal
amounts that would cause the limit to be exceeded, each will be
prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in
increments of .005%, e.g., 4.215%.
(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 $1 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 Rate ... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders:
Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders:
Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
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

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550

CONTACT:

FOR IMMEDIATE RELEASE
August 27, 2001

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
August 30, 2001
November 29, 2001
912795HM6

Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:

3.350%

Investment Rate 1/:

Price:

3.426%

99.153

All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 70.62%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

31,235,255
1,391,905
112,400

15,000,050 2/

32,739,560

SUBTOTAL

TOTAL

6,852,387

Federal Reserve

39,591,947

13,495,745
1,391,905
112,400

21,852,437

Median rate
3.330%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.300%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio

32,739,560 / 15,000,050

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,119,255,000

PO-578

2.18

PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
Office of Financing
202-691-3550

CONTACT:

FOR IMMEDIATE RELEASE
August 27, 2001

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
182-Day Bill
August 30, 2001
February 28, 2002
912795HJ3

Term:
Issue Date:
Maturity Date:
CUSIP Number:
3.290%

High Rate:

Investment Rate 1/:

Price:

3.392%

98.337

All noncompetitive and successful competitive bidders were awarded
securities at the high rate.
Tenders at the high discount rate were
allotted 28.41%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted

Tendered

Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)

26,096,567
1,330,822
120,900

13,000,024 2/

27,548,289

SUBTOTAL

TOTAL

4,942,147

Federal Reserve

32,490,436

11,548,302
1,330,822
120,900

17,942,171

Median rate
3.270%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate.
Low rate
3.210%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate ..
Bid-to-Cover Ratio

27,548,289 / 13,000,024

2.12

1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $989,425,000

http://www .publicdebt.treas.gov

PO-579

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W•• WASIflNGTON, D.C.• 20220. (202) 622-2960

U.S. International Reserve Position

u.s.

The Treasury Department today released
reserve assets data for the week ending August 24, 2001. As indicated in
this table,
reserve assets totaled 567,857 million as of August 24, 2001, down from 567,938 million as of August 17,
2001.

u.s.

(in

us. millions)

I. Official U.S. Reserve Assets

1. Foreign Currency Reserves
a. Securities

August 241 2001
67,857

August 171 2001
67,938

TOTAL
Euro

Yen

Euro

TOTAL

Yen

TOTAL

5,562

10,949

16,511
0

5,526

10,971

16,498
0

9,366

4,741

14,106
0
0

9,323

4,750

14,074
0
0

Of which, issuer headquartered in the U. S.

2. IMF Reserve Position

3. Special Drawing Rights (SDRs)
4. Gold Stock

5. Other Reserve Assets

0
0

15,407

15,386

10,871

10,856

11,044

11 Includes holdings of the Treasury's Exchange Stabilization Fund (ESF) and the Federal Reserve's System Open Market Account
(SOMA), valued at current market exchange rates. Foreign currency holdings listed as securities reflect marked-to-market values, and
deposits reflect carrying values.
21 The items. "2. IMF Reserve Position" and "3. Special Drawing Rights (SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDRJdoliar exchange rate for the reporting date. The IMF data for August 17 are final. The entries in the table
above for August 24 (shown in italics) reflect any necessary adjustments, including revaluation, by the U.S. Treasury to the pnor week's IMF
data.

31 Gold stock

valued monthly at $42.2222 per fine troy ounce. Values shown are as of July 31,2001. The June 30, 2001 value was

$11,044 million.

For press releases, speeches, public schedules and official biographies, rall Gur 24-lww-fa;; lirge at (292) 622-2{)4{)
'U.S. Government Printing Otflce 1998 - 619-559

U.S. International Reserve Position (cont'd)
II. Predetermined Short-Term Drains on Foreign Currency Assets
August 17. 2001
1. Foreign currency loans and securities

August 24. 2001

o
o
o

~. Aggregate short and long positions in forwards and

futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
2.b. Long positions
3. Other

III. Contingent Short-Term Net Drains on Foreign Currency Assets
August 24. 2001

August 17. 2001

1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1 year
1.b. Other contingent liabilities
2. Foreign currency securities with embedded options
1. Undrawn, unconditional credit lines
3.a. With other central banks
3.b. With banks and other financial institutions
headquartered in the U. S.
3.c. With banks and other financial institutions
headquartered outside the U. S .
. Aggregate short and long positions of options in foreign
currencies vis-a-vis the U.S. dollar
4.a. Short positions
4.a.1. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.1. Bought calls
4.b.2. Written puts

o
o

D E P .\ R T :\1 E N T

0 F

THE

T REA SUR Y

NEWS
OFnCE OF PUBliC AFFAIRS • 1500 PENNSYLVANIA AVENUE, N.W.• WASIflNGTON, D.C.• 20220. (202) 622-2960

For Immediate Release
August 30, 2001

Contact: Tara Bradshaw
(202) 622-2014

WEEK SEVEN:
TREASURY TO MAIL OUT 8.314 MILLION CHECKS
ON FRIDAY
Tomorrow the Treasury Department will send out 8.314 million advance payment checks to
taxpayers for more than $3.527 billion in tax relief. These checks will be sent to taxpayers whose
last two digits of their Social Security numbers are 60-69.
Week Six (August 31) Social Security Numbers 60-69
Number of Checks 8.314 million
Amount of Relief $3.527 billion
Week Six (August 24) Social Security Numbers 50-59
Number of Checks 8.266 million
Amount of Relief $3.550 billion
Week Five (August 17) Social Security Numbers 40-49
Number of Checks 8.219 million
Amount of Relief $3.483 billion
Week Four (August 10) Social Security Numbers 30-39
Number of Checks 8.210 million
Amount of Relief $3.467 billion
Week Three (August 3) Social Security Numbers 20-29
Number of Checks 8.185 million
Amount of Relief $3.468 billion
Week Two (July 27) Social Security Numbers 10-19
Number of Checks 8.133 million
Amount of Relief $3.443 billion
PO-581

Pm- press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-204(}

·U.S. Government Printing Office 1998· 619·559

Week One (July 20) Social Security Numbers 00-09
Number of Checks 7.908 million
Amount of Relief $3.336 billion
Seven "Veek Total
Number of Checks 57.235 million
Amount of Relief $24.274 billion
The Treasury Department will announce every week the number of checks that are being mailed
out for that week, and the amount of tax relief that is being sent to taxpayers. Checks will be
mailed over a ten-week period, according to the last two digits ofthe taxpayers Social Security
number. Notices from the Internal Revenue Service will inform taxpayers the amount of their
check and when they should expect it have been mailed. Single taxpayers will get a check up to
$300, head of household up to $500 and married couples filing jointly will get up to $600.
Because the Social Security number determines when checks are mailed, taxpayers may
receive their checks at different times than their neighbors or other family members. On a
joint return, the first number listed will set the mailout time.
If the last two digits of your
Social Security number are:
00 - 09
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 - 79
80 - 89
90 - 99

You should receive your check
the week of:
July 23
July 30
August 6
August 13
August 20
August 27
September 3
September 10
September 17
September 24

-30-

DEPARTMENT

THE

TREASURY

NEWS

OFFlCE'OF PUBLIC AFFAIRS e1500 PENNSYLVANIA AVENUE, N.W. e WASHINGTON, D.C.e 20220 e (202) 622.2960

EMBARGOED UNTIL 2:30 P.M.
August 30, 2001

CONTACT:

Office of Financing
202/691-3550

TREASURY OFFERS 13-WEEK AND 26-WEEK BILLS
The Treasury will auction 13-week and 26-week Treasury bills totaling
$27,000 million to refund an estimated $22,407 million of publicly held 13week and 26-week Treasury bills maturing September 6, 2001, and to raise new
cash of approximately $4,593 million. Also maturing is an estimated $10,000
million of publicly held 4-week Treasury bills, the disposition of which will
be announced September 4, 2001.
The Federal Reserve System holds $11,634 million of the Treasury bills
maturing on September 6, 2001, in the System Open Market Account (SOMA). This
amount may be refunded at the highest discount rate of accepted competitive
tenders either in these auctions or the 4-week Treasury bill auction to be
held September 5, 2001. Amounts awarded to SOMA will be in addition to the
offering amount.
Up to $1,000 million in noncompetitive bids from Foreign and International Monetary Authority (FIMA) accounts bidding through the Federal
Reserve Bank of New York will be included within the offering amount of each
auction.
These noncompetitive bids will have a limit of $200 million per
account and will be accepted in the order of smallest to largest, up to the
aggregate award limit of $1,000 million.

TreasuryDirect customers have requested that we reinvest their maturing
holdings of approximately $991 million into the 13-week bill and $735 million
into the 26-week bill.
The allocation percentage applied to bids awarded at the highest. discount
rate will be rounded up to the next hundredth of a whole percentage point,
e.g., 17.13%.
This offering of Treasury securities is governed by the terms and conditions set forth in the Uniform Offering Circular for the Sale and Issue of
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as
amended) .
Details about each of the new securities are given in the attached
offering highlights.
000

Attachment

PO-583

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED SEPTEMBER 6, 2001
1-_ugust 30, 2001
Offering Amount
Public Offering

$14,000 million
$14,000 million

$13,000 million
$13,00a million

Description of Offering:
Term and type of security . . . . . . . . . . . . . .
CUSIP number . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auction data . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity date . . . . . . . . . . . . . . . . . . . . . . . . . .
Original issue date . . . . . . . . . . . . . . . . . . . .
Currently outstanding . . . . . . . . . . . . . . . . . .
Minimum bid amount and multiples .......

91-day bill
912795 GU 9
September 4, 2001
September 6, 2001
December 6, 2001
June 7, 2001
$15,644 million
$1,000

182-day bill
912795 JJ 1
September 4, 2001
September 6, 2001
March 7, 2002
September 6, 2001
$1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids: Accepted in full up to $1 million at the highest discount rate of accepted
competitive bids.
Foreign and International Monetary Authority (FIMA) bids:
Noncompetitive bids submitted through the
Federal Reserve Banks as agents for FIMA accounts. Accepted in order of size from smallest to largest
with no more than $200 million awarded per account.
The total noncompetitive amount awarded to Federal
Reserve Banks as agents for FIMA accounts will not exceed $1,000 million.
A single bid that would
cause the limit to be exceeded will be partially accepted in the amount that brings the aggregate award
total to the $1,000 million limit.
However, if there are two or more bids of equal amounts that would
cause the limit to be exceeded, each will be prorated to avoid exceeding the limit.
Competitive bids:
(1) Must be expressed as a discount rate with three decimals in increments of .005%, e.g., 7.100%,
7.105%.
(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 $1 billion or greater.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt 01
competitive tenders.
Maximum Recognized Bid at a Single Rate .... 35% of public offering
Maximum Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% of public offering
Receipt of Tenders:
Noncompetitive tenders ... Prior to 12:00 noon eastern daylight saving time on auction day
Competitive tenders ...... Prior to 1:00 p.m. eastern daylight saving time on auction day
Payment Terms:
By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full
par amount with tender.
TreasuryDirect customers car. use the Pay Direct feature which authorizes a charge
to their account of record at their financial institution on issue date.

DEP ARTMENT OF THE TREASURY
OFFICE OF PUBLIC AFFAIRS

For Immediate Release
August 31, 2001

Contact:

Rob Nichols
202-622-2910

TREASURY DEPUTY SECRETARY KEN DAM TO INDIA, KOREA AND JAPAN
Deputy U.S. Treasury Secretary Ken Dam will travel to India, Korea and Japan on September
11-23. Deputy Secretary Dam will meet with a wide array of senior government officials and
private sector political, finallcial and economic experts to discuss trade, investment and a range
Gf steps supportive uf strong economic growth.
A detailed schedule of Deputy Secretary Dam's trip will be released September 10 th .
-30-

PO-584