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Department of the Treasury
PRESS R E L E A S E S
The following numbers were not used:
JS-343 to JS-349
JS-425
JS-342: Statement of W a y n e A . Abernathy on Increasing Competition for Remittance ker... rage 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 1,2003
JS-342
Statement of Treasury Assistant Secretary for Financial institutions
W a y n e A. Abernathy on Increasing Competition for Remittance Services
I applaud Citibank's announcement that it has reduced its remittance fees for
account-holders to send money to Mexico. Mexican-Americans send an estimated
$10 billion back to family members in Mexico each year. The increasing competition
among financial institutions - and resulting lower fees - will benefit these families
significantly.
Through the benefits of NAFTA and other agreements that we have with Mexico,
mainstream financial institutions are playing an increasing role in making these
transfers in a safer way and at lower cost. As part of Partnership for Prosperity, the
Treasury continues to encourage such progress, and recent fee-reduction
announcements by financial institutions is a positive step toward achieving our
goals.
http://www.treas.gov/press/releases/js342.htm
7/29/2003
Jb-^U: Under Secretary John Taylor speech at the hBKU
Annual Meeting
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A
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 5, 2003
JS-350
U.S. Governor's Address to the European Bank for Reconstruction
and Development 2003 Annual Meeting in Tashkent, Uzbekistan
President Lemierre, Secretary of State Short, fellow Governors, your Excellencies,
ladies and gentlemen. The United States continues its strong interest in sustained
economic growth and the creation of high-productivity jobs by the private sector in
the EBRD's countries of operation. Creating an environment where businesses
create jobs for people is the key to poverty reduction and rising living standards.
The EBRD's role is particularly critical for Central Asia given the need to catalyze
the private sector. Real progress on regional integration is key to unlocking the
region's untapped potential.
As we meet to discuss the EBRD and its region, we cannot help reflecting as well
on the contemporary challenges of Iraqi reconstruction and the war against
terrorism. Our hope is that a free Iraq will embark on the s a m e kind of
transformation to democracy and free markets as many of EBRD's countries.
Promoting stable, market economies is also part of the war on terrorism. A s
President Bush has said, "Persistent poverty and oppression can lead to
hopelessness and despair. And when governments fail to meet the most basic
needs of their people, these failed states can become havens for terror." The global
war on terrorism is removing barriers to prosperity and poverty reduction.
The experience of the transition economies and the EBRD itself provides a basis for
optimism for countries that heed the lessons of the last 12 years of transition.
Growth in this region has picked up dramatically. This past year the average growth
w a s 4.1 percent and output has increased in every country for the past three years,
with the single exception of Macedonia in 2001.
The advanced transition countries of Central Europe and the Baltics have
demonstrated that strong, consistent implementation of economic reform and
democracy, aided by the prospect of global integration, can create self-sustaining
growth. These countries are well on the road to successful transition and should be
candidates for graduation in the near-term. The success of the advanced countries
enables the E B R D to focus on opportunities in countries to the South and East,
where the challenges remain formidable.
The experience of Russia and Ukraine over the past few years demonstrates that
attacking key investment disincentives, agricultural reform in Ukraine or tax reform
in Russia, can catalyze a dramatic private sector supply response. The challenge is
to undertake other critical private investment-promoting structural reforms - both at
the policy and corporate levels -- necessary to underpin sustained and more broadbased growth. The E B R D has an important role to play here, just as it did in the
Central European economies in the 90's.
The experience of oil and gas producing countries, including those in Central Asia,
is that fiscal transparency and accountability are essential to ensuring that natural
resource wealth is translated into growth, poverty reduction and macroeconomic
stability. Kazakhstan and Azerbaijan's oil funds, while relatively new, can be
effective tools for achieving these goals.
Among the key lessons for the smaller transition economies is the need to establish
the appropriate policies and institutions to take advantage of new trade
http ://www.treas.gov/press/releases/j s3 50.htm
7/29/2003
J b - J S U : U n d e r Secretary J o h n Taylor speech at the E B R D A n n u a l M e e t i n g
rd^c
^ u u
opportunities. Armenia is a good example of a country committed to opening its
economy through W T O membership and by further reducing trade barriers. It has
achieved high rates of growth in recent years through expanding exports, despite
few natural resources and difficult relations with s o m e neighbors.
The recent history of the Balkans demonstrates the linkage between regional
integration and economic transition. With the downfall of Milosevic and the creation
of Serbia and Montenegro, the missing piece of the regional puzzle has been put in
place and the restoration of regional ties begun. The recent assassination of
Serbian Prime Minister Djindjic is a tragic reminder that criminal and terrorist forces
still threaten the stability and trade relations. The global war on terrorism is
overcoming these negative forces that prevent people from trading and prospering.
The potential benefits of regional economic integration are especially relevant for
Central Asia. Geography, natural resources and history all point to the logic of a
unified, liberalized market that can reestablish the region's role as a trading center
and attract outside investment. I will be participating in a meeting on Tuesday in the
Kyrgyz Republic on regional cooperation, which I hope will result in agreement on
s o m e concrete steps toward that goal. Uzbekistan's central location, resources and
large population compel it to lead in creating a functioning trade market in Central
Asia. W e are hopeful that contradictory polices - moving ahead on liberalizing the
exchange market while restricting trade - will give way to a consistent,
comprehensive program of economic liberalization. A s Uzbekistan's friend, the U.S.
will strongly support such a program through the International Financial Institutions
and our bilateral assistance.
We also have learned that the most dynamic sector of any economy, if properly
nurtured, is small business. In early transition countries, the E B R D has shown its
ability to help build economies and democracies from the ground up through micro
and S M E lending. I a m looking forward to visiting such projects tomorrow,
entrepreneurs w h o are creating jobs for people with the help of a local bank
supported by the E B R D . W e would like to see E B R D further expand its o w n
financing of micro and S M E s and through the Direct Investment Facility.
Finally, but hardly least important, the EBRD's mandate prominently recognizes the
importance of both economic and political reforms. E B R D has shown leadership in
upholding the principles of multiparty democracy, pluralism, and market economics,
including in the country strategies for Belarus, Turkmenistan, and Uzbekistan. A
sign of the importance of these seminal values is the attendance of independent
N G O s , human rights groups, media, and other interested people at this annual
meeting. Uzbekistan has much to gain by implementing democratic and economic
reforms and respecting human rights and freedoms based on the universally
recognized principles and norms of international law. The Government of
Uzbekistan recently renewed its commitment under our governments' joint
"Declaration on the Strategic Partnership and Cooperation Framework" and the
U.S. looks forward to Uzbekistan fully meeting those commitments to economic and
democratic reforms and respect for human rights.
Beyond EBRD's core work, EBRD as a public institution must pursue institutional
governance policies that demonstrate accountability and transparency and provide
assurance that its financing is used in an effective manner. W e hope E B R D
shareholders will support more progressive standards during future reviews of key
governance policies recently discussed in the Board. W e are disappointed that
most shareholders recently agreed to fairly modest approaches relative to what
they have pushed in the Boards of other Multilateral Development Banks. W e
believe that the new public information policy and independent recourse
mechanism should be improved to provide greater disclosure, independence, and
scope.
We applaud the EBRD's work thus far to measure performance at the project level,
and encourage efforts to improve upon and systematize the measurement of
project results. W e are pleased with the introduction of the new Transition Impact
Monitoring System, and are hopeful this system will build the institutional capacity
to produce measurable results.
http://www.treas.gov/press/releases/js350.htm
7/29/2003
J^-JDU:
Under Secretary John Taylor speech at the isBRD Annual Meeting
rage J O I J
In another aspect of governance, the Board of Governors has taken a decision that
weakens its oversight and authority by approving a resolution that would allow the
remuneration committee to approve future inflation-indexed increases in
compensation for Executive Directors. W e believe these multi-year, essentially
automatic increases should be reconsidered and rejected.
Looking ahead, EBRD must seek to maximize transition impact and promote reform
where it is most needed. W e look forward to an increasing focus on countries in the
early stage of transition is imperative if the Bank is to achieve its overall mission,
and a continuing emphasis on the nurturing of small and medium sized businesses
is essential to the long-run prospects for economic growth, job creation, and reform.
There is much work to do right here in Central Asia, and we look forward to greater
Bank involvement in this region and continuing success in all countries of
operations. W e are fortunate to have President Lemierre's sound judgment and
effective leadership and are confident in his ability to help the Bank face the
challenging times ahead.
http://www.treas.gov/press/releases/js350.htm
7/29/2003
J ^ - J D i : U.S. treasurer M a n n Will Demonstrate J N e w Remittance uption m a t a n o w s pcup... ± <*5v x
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 5, 2003
JS-351
MEDIA ADVISORY
U.S. Treasurer Marin Will Demonstrate
N e w Remittance Option that allows people to construct h o m e s
at Tuesday Event
As part of her ongoing leadership in the U.S./Mexico Partnership for Prosperity
initiative, U.S. Treasurer Rosario Marin on Tuesday will highlight new competitive
and innovative ways that people in the United States can send money to family
members and friends in Mexico maximizing the utility of the money sent. The event
will take place at C E M E X Offices 10:30 a.m. on Tuesday Huntington Park 7138
Pacific Blvd. Huntington Park, C A 90255
The event is hosted by the NAFINCIN and CEMEX will take place in Huntington
Park, California. C E M E X was selected by the Partnership for Prosperity as one of
several businesses including other financial institutions including banks and credit
unions that are offering competitive, low-cost ways to send money to Mexico.
Each year, Mexicans and Mexican-Americans send a total of more than $9 billion to
family and friends in Mexico. The average remittance is $200-$250. However, fees
for those remittances can be as high as 2 0 % .
The U.S./Mexico Partnership for Prosperity initiative - a joint effort created by
President George W . Bush and Mexican President Vicente Fox - seeks to leverage
private sector resources to promote development in the parts of Mexico where
growth has lagged and fueled migration.
Partnership for Prosperity is working to promote competition among financial
institutions offering remittance services. Greater competition will lower the cost to
consumers of sending money home to households and regional economies in
Mexico that need it most.
Rosario Marin, the highest-ranking Latina in the Bush Administration, was sworn in
as the 41st Treasurer of the United States on Aug. 16, 2001. Born in Mexico City
before immigrating to the United States at age 14, Treasurer Marin is the first U.S.
Treasurer born outside of the country.
http ://www.treas. gov/press/releases/j s3 51 .htm
7/29/2003
Jb-352: ramela t. Olson Assistant Secretary tor lax rolicy Department ot the treasury
rage i 011
FROM THE OFFICE OF PUBLIC AFFAIRS
May 1,2003
JS-352
Statement of Pamela F. Olson Assistant Secretary
for Tax Policy Department of the Treasury
Before the House Committee on Small Business
Small Business
http ://www.treas.gov/press/releases/j s3 52 .htm
7/29/2003
DEPARTMENT OF THE TREASURY
OFFICE OF PUBLIC AFFAIRS
For Immediate Release Contact: Tara Bradshaw
M a y 1,2003
(202)622-2014
STATEMENT OF PAMELA F. OLSON
ASSISTANT SECRETARY FOR TAX POLICY
DEPARTMENT OF THE TREASURY
BEFORE THE HOUSE COMMITTEE ON SMALL BUSINESS
Mr. Chairman, Ranking M e m b e r Velazquez, and Members of the Committee:
I am pleased to be here today to discuss the efforts of the IRS to reduce the burdens of tax
compliance on small businesses and the Regulatory Flexibility Act (RFA).
ADMINISTRATION PRIORTY ON REDUCING SMALL BUSINESS BURDENS
The entire Administration, including the IRS and the Department of the Treasury, is
committed to working closely with the small business community and its representatives to help
small businesses and the self-employed understand their tax obligations and reduce their
compliance burdens. W e believe our record bears out this commitment.
The newly restructured IRS is built around four organizational units with end-to-end
responsibility for serving specific groups of taxpayers. O n e of these units is the Small Business
and Self-Employed (SB/SE) Operating Division, which serves the approximately 7 million
taxpayers that are small businesses. SB/SE exists because the IRS recognizes that small
businesses have unique issues that could be given short shrift unless a specific operating unit was
devoted to them. In addition, because the IRS recognizes that these taxpayers m a y lack the
financial resources to understand and address these unique issues, one of the primary focuses of
the SB/SE Division is to work with small businesses to teach them about their federal tax
responsibilities and to develop less burdensome and more practical means of compliance. The
SB/SE Division has also assumed an important role in reviewing IRS regulations to ensure that
they minimize burdens placed on small businesses consistent with the requirements of the tax
law and principles of sound tax administration.
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W e are extremely pleased that last December the Small Business Administration
presented the IRS with its 2002 Agency of the Year Award. S B A recognized SB/SE's Taxpayer
Education and Communication organization for its outstanding progress in creating an effective
education and compliance assistance program for small businesses and the self-employed. W e
are committed to continuing this record of achievement in serving the small business community.
The IRS continues to expand the ways it communicates with small businesses. For
example, in 1999 the IRS initiated "The Small Business Corner" on the IRS Internet site. It
provides small business taxpayers with easy-to-access and easy-to-understand information
necessary to comply with their federal tax responsibilities. The goal of this type of convenient
"one-stop shopping" is to provide virtually all of the products and services that a small business
needs to meet its tax compliance responsibilities.
The IRS has also initiated a comprehensive taxpayer burden reduction initiative. The
Service-wide Taxpayer Burden Reduction Council develops, coordinates, and champions crossfunctional or service-wide burden reduction projects. Small business taxpayers participate in the
IRS Industry Issue Resolution Program, which includes taxpayer burden reductbn as a program
criterion. Recently implemented burden reduction projects benefiting small businesses include:
• Exempting 2.6 million small corporations from filing Schedules L, M-l & M-2, reducing
burden by 61 million hours annually. (April 2002)
• Reducing the number of lines on Schedules D, Forms 1040 and 1041, resulting in
estimated burden reduction of 9.5 million hours for 22.4 million taxpayers. (January
2002)
• Eliminating the requirement for filing Part III of Schedule D (capital gains), Form 1120S
for 221,000 S-Corporation taxpayers, reducing burden by almost 600,000 hours.
(November 2002)
The IRS has also streamlined many of its procedures to make compliance less
burdensome for small business taxpayers. A few examples include:
• The establishment of a permanent special group to work with payroll services to resolve
problems before notices are issued and penalties are assessed against the individual small
businesses serviced by these bulk and batch filers. (October 2002)
• Business filers can now e-file employment tax and fiduciary tax returns, and at the same
time, pay the balance due electronically by authorizing an electronic funds withdrawal.
• Business preparers can now e-file their clients' employment tax returns.
• The IRS has continued to improve its Web site to offer its customers the ability to both
order, and in m a n y cases, utilize its Small Business Products online.
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The IRS Website n o w includes the Electronic Marketing Card, which introduces small
businesses and the self-employed to the SB/SE Division, and its mission, services, products, and
contacts. Small business taxpayers can also automatically download tax events from the 2003
Small Business Tax Calendar into their Outlook calendars.
In addition, the Small Business Resource Guide, and the Virtual Small Business
Workshop, are all n o w available to view online. The Virtual Small Business Workshop is
powered by video streaming technology and is available through the Online Classroom. IRS
customers can visit the Online Classroom w h e n it is convenient for them. If a small business
owner or self-employed individual needs to speak with someone from the IRS directly, he or she
is just a click away from the " N e w Toil-Free Numbers to Reach the IRS" located on the Small
Business Community homepage.
It is the long-term and continuing goal of the IRS and the Treasury to ease the burden of
small businesses to the greatest extent practical, consistent with the law as enacted by Congress.
W e look forward to working with this committee as w e continue those efforts.
THE BENEFITS OF TIMELY IRS GUIDANCE TO SMALL BUSINESS
Minimizing taxpayer burdens, whether for small businesses or other taxpayers, is a
paramount objective of the regulations and other guidance issued by the IRS. Unfortunately, our
tax laws have become devastatingly complex in recent years. That complexity threatens to
undermine taxpayer confidence in the system, as people come to view the system as one that
encourages aggressive tax planning by those with the resources to hire sophisticated planners.
W e view a system that puts people to the choice of being a cheat or a chump as inherently
unstable. It is essential that w e simplify the tax laws wherever and whenever w e can. Just as
importantly, w e must refrain from making the system any worse than it already is.
It is important to emphasize that tax regulations and other guidance are, themselves,
means by which taxpayer burdens are reduced. Regulations, rulings, and notices serve to make
clear h o w the tax laws enacted by Congress will apply in the real life situations faced by
businesses, including small businesses as they plan their affairs and file their tax returns. The
business community desires and needs such guidance. Without it, the law would remain unclear
and businesses would be forced to take their best guess, with the consequence being an IRS audit
if the guess is wrong. With regulations in place, the guesswork (and the potential for an audit) is
significantly reduced. Certainty - knowing h o w the IRS will interpret and apply a law written by
Congress - is the most efficient and effective w a y to reduce the burden of small businesses
complying with the tax law.
In developing tax guidance, Treasury and the IRS actively seek input from interested
parties, including small business, and endeavor to offer as m a n y opportunities as possible for
interested parties to participate in the process. In almost all situations, the IRS issues proposed
rules and in some cases advance notices of proposed rulemaking for public comment. The same
is often done for draft revenue procedures. W h e n public comments raise n e w issues, w e often
issue a second notice of proposed rulemaking. Treasury and IRS carefully consider all
comments received from the public and w e revise proposed rules to minimize burdens and
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simplify compliance whenever possible, consistent with principles of sound policy and tax
administration.
In this context, it is important to remember that IRS regulations do not make the laws
that apply to small businesses or any other taxpayer. Congress does that by amendments to the
Internal Revenue Code. The role of IRS and Treasury is to interpret and apply those laws. In
that way, tax regulations differ greatly from regulations issued by other regulatory agencies. W e
provide taxpayers with the guidance they heed to comply with their obligations under the
Internal Revenue Code as enacted by the Congress.
Providing timely, comprehensive, and understandable guidance to taxpayers reduces
controversy, eliminates disputes, and provides taxpayers with certainty concerning their
obligations under the tax code. Just as important, clear IRS regulations and guidance minimize
the likelihood that there will be contact between IRS and taxpayers. Without this guidance,
compliance obligations would have to be established through burdensome taxpayer audits and
costly litigation Audits and litigation are a costly and inefficient means of interpreting the law.
For example, several years ago the IRS was devoting significant audit resources to
examining the use of the cash method of accounting. This was one of the most heavily litigated
tax issues. In order to reduce administrative and compliance burdens on small business
taxpayers and to minimize controversy between the IRS and these taxpayers, w e issued in
December 2001 a proposed revenue procedure on the use of the cash method of accounting by
small businesses and requested comments from the public on the proposed guidance. After
considering the issues raised in the comments, w e m a d e changes and clarifications to the
guidance and issued a final revenue procedure in April 2002. The final revenue procedure
expressly permits certain businesses with gross receipts of less than $10 million to use the cash
method of accounting. W e expect that the revenue procedure will eliminate most disputes
concerning the use of the cash method by small business taxpayers.
This example illustrates what may be a unique feature of tax regulations in that they
interpret statutory tax obligations, but do not impose tax obligations. That is, the statutory
requirements take effect, taxpayers must comply with them, and the IRS must enforce them In
the absence of regulations, the IRS must still enforce the law, and it will do so without the
benefit of the interpretative guidance that the regulations provide. The result is likely to be
increased cost and burden for taxpayers if regulations are not issued or are not issued on a timely
basis.
The IRS and Treasury are committed to easing the burden on small business wherever
possible, consistent with the laws enacted by Congress and sound tax administration. Reducing
taxpayer burden frees up IRS resources for more important tasks, including aggressive pursuit of
tax evasion
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IRS G U I D A N C E A N D T H E R E G U L A T O R Y F L E X I B I L I T Y A C T
The Department of the Treasury and the IRS fully support the objectives of the
Regulatory Flexibility Act.
In 1996, Congress amended the RFA to make it applicable to interpretative tax
regulations to the extent that those regulations impose a collection of information on small
entities. This amendment, which Treasury worked with the Congress to develop, recognizes two
important elements of tax regulations. The first is that provisions of the Internal Revenue Code,
as enacted by Congress, must be applied equally to all businesses regardless of whether they are
large multinational corporations or small businesses d o w n the street. The second is that
paperwork burdens imposed by regulations that affect small businesses must be carefully
considered by the IRS and minimized when possible.
The 1996 amendment made the RFA applicable to an interpretative tax regulation when
that regulation is subject to review and approval by O M B under the Paperwork Reduction Act of
1995. That means that the IRS must prepare a regulatory flexibility analysis for any rule that
imposes a collection of information on small businesses unless the IRS certifies that the
collection of information will not have a significant economic impact on a substantial number of
small businesses.
Treasury and the IRS take their responsibilities under the RFA very seriously. Indeed,
every IRS regulation is reviewed by three different offices for compliance with the R F A , as well
as the other laws and Executive orders that govern the regulatory process. The first review
occurs in the Office of the IRS Chief Counsel, the second by tax counsel at the Department, and
the third in the office of Treasury's General Counsel.
In addition, every single IRS rule is required by section 7805 of the Internal Revenue
Code to be sent to the Chief Counsel for Advocacy for comment on its impact on small
businesses. If the Chief Counsel submits comments, the IRS is required by law to respond to
those comments in the final rule. The law imposes no such requirement on any other agency.
With one very limited exception for regulations involving information collections
conducted in connection with civil or criminal enforcement actions, the 1996 amendment applies
to any interpretative tax regulation that requires small business taxpayers to (1) report
information to the IRS, (2) disclose information to any other person, or (3) maintain specified
records. Whenever a regulation involves one of these requirements, the IRS is required to
prepare a regulatory flexibility analysis or certify that the regulatbn will not have a significant
economic impact on a substantial number of small entities and explain the basis for its
certification. The IRS complies with these requirements for every interpretative regulation it
issues.
We have heard some speculation that the IRS considers the 1996 amendment to apply
only when a regulation results in small business taxpayers having to complete a n e w form. This
is categorically not correct. This misconception is understandable because most people associate
IRS paperwork burdens with the preparation and filing of tax returns or information returns.
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Even w h e n an interpretative tax regulation is not subject to the R F A because it does not
impose a requirement for collection of information, it is the policy of the Department of the
Treasury to minimize, consistent with statutory requirements and sound regulatory policy, the
compliance and paperwork burdens that their regulations impose on small businesses. This
policy, as well as the Treasury Department's overall policy and procedures for complying with
the R F A , are reflected in the formal guidance developed by the Department and recently posted
on our Website pursuant to Executive Order 13272.
Since the 1996 amendments to the RFA, we have identified 24 proposed or final rules for
which the IRS has prepared an initial or final regulatory flexibility analysis. For m a n y of these,
the IRS prepared the analysis not because it believed that the paperwork components in the
regulations imposed a significant economic impact on a substantial number of small businesses,
but rather because to do so comported with the spirit of the R F A . For the balance of the
regulations issued during that period, the IRS certified that the information collections contained
in the regulations would not have a significant economic impact on a substantial number of small
entities.
IRS GUIDANCE RELATING TO MOBILE MACHINERY AND INTEREST REPORTING
BY BANKS
Finally, the letter inviting us to testify today raised concerns over IRS compliance with
the R F A in connection with two specific regulations.
The first is a proposed rule that concerns excise taxes on certain motor vehicles issued in
June, 2002. Under current law, various excise taxes are imposed to provide revenues to fund the
Highway Trust Fund. Those statutory provisions are broadly written, applying to virtually all
vehicles (and fuels for those vehicles) that are capable of traveling on highways.
IRS defines a highway vehicle as any self-propelled vehicle, trailer, or semitrailer
designed to perform a function of transporting a load over public highways, whether or not it is
also designed to perform other functions. The regulations (and not the statute itself) broadly
exempt from those excise taxes vehicles that were, in essence, mobile machinery mounts. This
exemption was consistent with the notion that, because the taxes were enacted to support the
construction and maintenance of public highways, the applicable statutory provisions should
only be applied with respect to vehicles generally capable of traveling on highways. The
exception was apparently based on the assumption that vehicles that transport mobile machinery
would m a k e minimal use of public highways and thus would receive only minimal benefit from
highway construction and maintenance.
This broadly-written exception, however, was the source of much dispute between
taxpayers and the IRS. M u c h of the disputes centered o n what was and what was not mobile
machinery, and reflected increasing technological advances that permitted heavier equipment to
be mounted on vehicles perfectly capable of significant use of our highways. M a n y of those
disputes involved very large rather than small businesses.
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These factual and definitional disputes were and remain a continuous drain on taxpayer
and IRS resources. W e concluded that taxpayers needed more specific guidance in order to
reduce the number of disputes and to provide certainty to taxpayers. The proposed regulations
were developed with that goal in mind. W e are aware that the proposed regulations were
controversial, and have advised that they will not be finalized until the Congress completes its
work on the Highway Trust Fund reauthorization.
An initial regulatory flexibility analysis was not prepared for this proposed rule because it
does not meet any of the requirements for such an analysis under the 1996 amendment. The
regulation does not contain any requirement that any taxpayer report information to the IRS,
report information to another person, or maintain specified records. While it is true that some
small business taxpayers m a y become subject to these excise taxes if this rule is finalized, this is
a function of the Internal Revenue Code and not the result of a collection of information
contained in the regulation. Thus, the proposed regulation complied fully with the requirements
of the 1996 amendment.
The second is a proposed regulation regarding reporting by banks in the United States on
interest paid to certain nonresident alien depositors. This information reporting is intended to
improve compliance with U.S. tax obligations, and will not unduly burden U.S. banks. Tax
evasion through the use of offshore accounts is a significant and growing problem in the United
States. Enhancing appropriate information exchange pursuant to our bilateral tax treaties in
appropriate circumstances, subject to the strict protections of the confidentiality of taxpayer
information, is an important means of reducing the opportunities for tax avoidance in the
offshore sector. W e must address the potential for tax evasion through use of offshore accounts
or entities in order to maintain confidence of all Americans in the fairness of our tax system.
This proposed regulation is just one element of our multi- faceted effort to protect the interests of
honest taxpayers w h o are prepared to pay their fair share of U.S. taxes and w h o should not have
to bear a greater burden because of the few w h o are less than honest. In today's world, it is more
important than ever that no safe haven exist anywhere in the world for the funds associated with
illicit activities.
The currently-pending regulation is the second proposed regulation on this matter. The
original proposed regulation, which was issued in January of 2001, was withdrawn and reproposed in July of 2002 following thorough consideration by the Treasury Department and the
IRS of all the comments received on the January 2001 proposed regulation. The regulation as reproposed was narrowed significantly in scope - requiring information reporting with respect to
interest paid only to residents of sixteen countries that are major trading partners of the United
States - in order to address the banking industry's concerns about the January 2001 regulation,
which would have required information reporting with respect to interest paid to all foreign
depositors wherever they reside. Moreover, the regulation was again issued in proposed form in
order to provide another opportunity for those potentially affected to c o m m e n t on its impact.
Treasury and the IRS have carefully considered the requirements of the RFA with respect
to this proposed regulation. W e do not believe that the information reporting that would be
required under this regulation would have a significant economic impact on a substantial number
of small entities. The depository accounts, the interest on which would be subject to reporting
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under the regulation, tend to be with larger financial institutions operating in the United States
because such institutions tend to maintain correspondent account relationships with financial
institutions in the countries specified in the regulations. Thus, the number of small entities that
would be required to undertake this reporting is expected to be small. T o the extent small
financial institutions have accounts for which reporting would be required under this regulation,
the number of such accounts is expected to be very limited. Moreover, the amount of time
required to complete the forms and statements that would be required is not substantial. The
information reporting that would be required is consistent with the reporting that U.S. banks do
currently for interest paid to U.S. persons and to Canadian residents and would build on systems
already in place.
That concludes my prepared statement. I would be pleased to answer any questions the
Committee m a y have.
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JS-353: Statement by Tax Policy P a m Olson on the Results ot the Ottshore Initiative
rage i 011
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 1,2003
JS-353
Statement by Treasury Assistant Secretary for Tax Policy Pam Olson
on the Results of the Offshore Initiative
The Offshore Initiative has been an effective program in bringing taxpayers back
into compliance with the law. Many people have come forward and provided
information that is leading us to other promoters and participants. W e are hopeful
this initiative will aid in stemming the promotion of abusive schemes.
Taxpayers that have not come forward will be pursued by the IRS and will be
subject to more significant penalties and possible criminal sanctions.
Treasury and the IRS must ensure that the IRS has the information necessary for it
to fully and fairly enforce the tax laws. The voluntary compliance initiative is an
important source of information. The John Doe summons initiatives are another.
Treasury will continue its efforts to improve and expand the U.S.'s broad network of
bilateral tax treaties and tax information exchange agreements. Better tax
information exchange relationships will permit the IRS to obtain the information it
needs from other countries so it can pursue taxpayers attempting to hide income
offshore to avoid their tax obligations.
http ://www.treas. eov/nress/releases/j s3 5 3 .htm
7/29/2003
;au of the Public Debt: Public Debt Announces Activity for Securities In The STRIPS Program For ... Page 1
r^Tk
Bureau of the
Public
ted states Department
' ,„, ; "»*, .'. r - ^ « & ;
ot r,';e Ireas'jty
blic Debt Announces Activity for Securities in the STRIPS Program for April
03
t IMMEDIATE RELEASE
6, 2003
3ureau of the Public Debt announced activity for the month of April 2003, of securities within the Separate Trading of Registered
est and Principal of Securities program (STRIPS).
In Thousands
cipal Outstanding (Eligible Securities)
$2,285,544,676
i in Unstripped Form
$2,112,222,446
I in Stripped Form
$173,322,231
Dnstituted in April
$11,958,600
accompanying table, gives a breakdown of STRIPS activity by individual loan description. The balances in this table are subject to
and subsequent revision. These monthly figures are included in Table V of the Monthly Statement of the Public Debt, entitled
lings of Treasury Securities in Stripped Form."
STRIPS table, along with the n e w Monthly Statement of the Public Debt, is available on Public Debt's Internet site at:
.publicdebt.treas.gov. A wide range of information about the public debt and Treasury securities is also available at the site.
Intellectual Property | Privacy & Security Notices | Terms & Conditions | Accessibility | Data Quality
U.S. Department of the Treasury, Bureau of the Public Debt
Last Updated September 27, 2004
fS - 3 &
ywww.puhliukbUEeasJjQy/com/com0503s.htm
s/i nn.
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 CONTACT: Office of Financing
May 06, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term: 28-Day Bill
Issue Date:
Maturity Date:
CUSIP Number:
May 08, 2003
June 05, 2003
912795MQ1
High Rate: 1.040% Investment Rate 1/: 1.060% Price: 99.919
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 69.04%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Accepted
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
21,409,500
43,884
0
$
5,956,121
43,884
0
21,453,384
6,000,005
4,143,429
4,143,429
25,596,813
$
10,143,434
Median rate
1.030%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.010%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 21,453,384 / 6,000,005 = 3.58
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
JS-3«-
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 CONTACT: Office of Financing
May 06, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 3-YEAR NOTES
Interest Rate: 2% Issue Date: May 15, 2003
Series:
G-2006
Dated Date:
CUSIP No:
912828AY6
Maturity Date:
High Yield:
2.009%
Price:
May 15, 2003
May 15, 2006
99.974
All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 43.18%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type Tendered Accepted
Competitive
Noncompetitive
FIMA (noncompetitive)
$
42,895,300
144,034
130,000
$
21,725,974
144,034
130,000
SUBTOTAL 43,169,334 22,000,008 1/
Federal Reserve 391,025 391,025
TOTAL $ 43,560,359 $ 22,391,033
Median yield 1.980%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
1.800%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 43,169,334 / 22,000,008 = 1.96
1/ Awards to TREASURY DIRECT = $50,317,000
http://www.publicdebt.treas.gov
fS 3S'<f
J^-357: M E D I A A D V I S O R Y Departments of Treasury and Deiense Host financial nauc... r a g e i ui i
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 6, 2003
JS-357
MEDIA ADVISORY
Departments of Treasury and Defense Host Financial Education Event on
Thursday
The Departments of the Treasury and Defense on Thursday, May 8, 2003 will host
a financial education event at the Department of the Treasury.
The event will serve as the official launch of the Department of Defense's Financial
Literacy Campaign. In addition, Treasury's Office of Financial Education will
formally recognize the Department of Defense for its exemplary program that
contains the critical elements for a successful financial education program.
The event will feature remarks by Treasury Under Secretary for Domestic Finance
Peter R. Fisher, Defense Under Secretary for Personnel and Readiness Dr. David
S.C. Chu, and Treasury Deputy Assistant Secretary for Financial Education Judy
Chapa.
The event will take place at 1:00 pm on May 8, in the Treasury Department's Cash
Room, 1500 Pennsylvania Ave., N W , Washington, DC.
Media without Treasury or White House credentials must request security clearance
at least 24 hours before the event. Please contact Frances Anderson in the Office
of Public Affairs at 202-622-1960 with your name, organization, date of birth and
social security number by 1:00 pm on May 7, or fax the information to 202-6221999.
http://www.treas.gov/press/releases/js357.htm
58: Treasury Secretary John S n o w to Hold Press Conference Background Briefing
Fage i <
PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 7, 2003
JS-358
MEDIA ADVISORY
U.S. Treasury Secretary John Snow to Hold Press Conference
Background Briefing by Senior Treasury Officials to Follow
U.S. Treasury Secretary John Snow will hold a press conference this afternoon at
3:30 P M in the Treasury Department Media Room immediately followed by a
background briefing with Senior Treasury Officials.
WHAT: Press Conference by Secretary John Snow
W H E N : 3:30 P M
W H E R E : Treasury Department Media Room
PARTICIPANTS: Secretary Snow
Senior Treasury Officials
C O V E R A G E : On-camera, on-the-record
Briefing will be open to Treasury Department and White House press pass holders.
/ w w w , treas. env/nress/rel eases/j s3 5 8 .htm
5/10/21
ZUU3-5-6-16-17-36-24106: Report to Congress on International Economic and Exchange ... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 6, 2003
2003-5-6-16-17-36-24106
Report to Congress on Internationa! Economic and Exchange Rate Policies
For the period July 1, 2002, through December 31, 2002
Report(s):
• Update 2002 fxreport
http://www treas fmv/nress/releases/20035616173624106.htm
7/29/2003
Report to Congress on International Economic and Exchange Rate
Policies
For the period July 1, 2002, through December 31, 2002
THIS REPORT IS REQUIRED UNDER SECTION 3005 OF THE OMNIBUS TRADE AND
COMPETITIVENESS ACT OF 1988 (THE "ACT"). THIS REPORT REVIEWS DEVELOPMENTS
IN U.S. INTERNATIONAL EXONOMIC POLICY, INCLUDING EXCHANGE RATE POLICY.
Major Findings:
• Countries around the world continue to use a variety of exchange rate policies, ranging from flexible
rates with no intervention to currency unions and to full dollarization.
• There was no reversal of the trend toward greater flexibility observed since the mid 1990s. Treasury
continues to monitor the exchange rate practices of major U.S. trading partners and to encourage policies that
promote economic growth and economic stability.
• No major trading partners of the United States manipulated exchange rates under the terms of Section
3004 of the Act during the period July 1, 2002, through December 31, 2002.
petroleum products, increased strongly in the period
from the first half of 2002. Export growth was
sluggish as the recovery in foreign economies lagged
the United States recovery.
The United States:
Current Account
The U.S. current account deficit rose to a seasonally
adjusted (sa) $137 billion or 5.2% of G D P in the fourth
quarter of 2002. The current account deficit for the
entire year rose to $503 billion or 4.8% of G D P in
2002 from a cyclically depressed level of $393 billion,
or 3.9% of G D P , in 2001. The value of imports,
particularly of consumer goods and petroleum and
U.S. Balance of Payments and Trade
($ billions, SA, unless otherwise indicated)
-sum ToTE
Balance on Currenct Account
Billions of $
Per Cent G D P
Select Financial Flows
(+=capital inflow)
Net Bank Flows
Net Direct Investment Flows
Net Securities Sales
Net Liabilities to Unaffiliated Foreigners
by Non Banking Concerns
M e m o : Statistical discrepancy
Trade in G o o d s
Balance
Total Exports
of which:
Agricultural Products
Capital Goods Ex Autos
Automotive Products
Consumer Goods
Industrial Supplies'
Total Imports
of which
Petroleum and Products
Capital Goods ex Autos
Automotive Products
Consumer Goods
Advanced Technology (NSA)
Balance
Exports
Imports
Source: BEA
' Including Petroleum & Products
2W2
Cri
Q2
Q3
Q4
-393.4 -503.4 -112.5 -127.7 -126.3 -136.9
-3.9
-4.8
-4.4
^t.9
^.8 -5.2
-48.3 110.4
3.0 -93.4
342.7 417.6
68.0
10.7
21.2
28.5
-9.3
-13.2
73.3
-11.9
-37.1
112.3
68.0
-23.5
131.0
63.6
-19.6
101.0
32.4
24.9
4.4
54.4
-8.0
-43.4
-7.5
-7.4
-427.2 -484.4 -106.6 -122.6 -122.9 -132.3
718.8 682.6 164.4 172.2 175.4 170.7
54.9
54.4
13.8
13.5
13.3
13.8
321.7 290.6
70.9
73.3
71.1
75.3
75.4
78.4
18.4
20.1
20.6
19.3
88.3
84.4
21.4
20.5
21.0
21.5
160.2 157.C
36.8
39.7
40.5
39.9
1145.9 1166.S 271.0 294.8 298.2 302.9
103.6 103.e
298.0 283.6
189.8 203.9
284.5 307.9
19.2
69.3
47.6
71.4
27.1
72.1
51.8
76.9
27.7
71.3
52.5
78.8
29.6
71.2
52.0
80.7
4.4 -17.5
-2.0
43.6
45.6
-2.1
45.6
47.6
-5.5
44.9
50.3
-8.0
44.6
52.5
199.6
195.2
178.6
196.1
Financial Flows
Net financial flows into the United States remained
strong. Although net foreign purchases of U.S.
corporate bonds and equities declined during the period
from first half 2002 levels, increased net sales of
Treasury and agency securities were large enough to
offset these declines. The inflows easily financed the
U.S. current account deficit and reflected international
investors' continued strong interest in investment
opportunities in U.S. markets.
International Investment Position and Earnings
The latest available data indicate that the negative net
investment position of the United States (with direct
investment valued on a market-value basis) widened to
$2.3 trillion at the end of 2001 from $1.6 trillion at the
end of 2000. Despite this large negative position, net
income payments on investment assets amounted to
only $5 billion dollars in 2002. This represents a
decline from a positive $21 billion in net earnings on
investment assets in 2001, reflecting a fall in net
income on direct investment from $103 billion in 2001
to $78 billion in 2002.
"The period" means July 1, 2002, through December 31,
2002 unless otherwise indicated
2002 as a whole, the current account swung to a $60
billion surplus from an $11 billion deficit in 2001.
The Dollar in Foreign Exchange Markets
The Federal Reserve Board's broad nominal dollar
index did not change significantly over the period.
There was, however, a dichotomy in the dollar's
performance against the two component currency
groupings in the broad index: the Federal Reserve
Board's trade-weighted index of the dollar's exchange
value against seven major foreign currencies declined
1.6% during the period while the index of the
currencies of the other important U.S. trading partners
(OITP)rose2.5% 2 .
The nominal euro appreciated 6.4% against the dollar,
while the Eurostat index of the real effective exchange
rate appreciated 3.7% over the period. The euro
appreciated 17.8% against the dollar in the year
through December 31, 2002.
Japan
The yen was virtually flat against the dollar during the
period, appreciating 0.9%, to ¥118.8 at the end of
December 2002 from ¥119.9 at the end of June 2002.
JP Morgan's real trade-weighted index of the yen,
however, fell 2.2% under the pressure of Japanese
deflation. The Ministry of Finance indicated that Japan
did not intervene in the foreign exchange market
during the period.
Exchange Rates in Dollars
(December2001 = 100)
Canada
••
Korea
China
. . . . Malaysia — — —
Euro Zone
Mexico
Japan's current account surplus shrank to $54 billion
(2.6% G D P ) in the second half of 2002, d o w n from
$58 billion (3.0% G D P ) h thefirsthalf of the year,
reflecting a smaller merchandise trade and services
surplus and an increasing current account transfers
deficit. While the merchandise trade surplus grew 6 %
to $48.1 billion in the period, Japan's services deficit
expanded 1 7 % to $22.5 billion, more than offsetting
the growth in the merchandise trade surplus. The
growing services deficit, along with a larger transfers
deficit, accounted for m u c h of the overall decline in the
current account surplus.
Japan
•———~ Taiwan
The appreciation of the dollar against the OITP
currencies over the second half of 2002 was largely due
to currency depreciation in Latin America, particularly
in Brazil and Mexico. The Brazilian real, which carries
a 4 % weight in the OITP index, depreciated 20.1% and
the Mexican peso, which carries a 22.9% weight in the
index, depreciated 4.3% over the period.
Long-term financial account outflows were very large
during the period. Net outflows associated with direct
investment and with portfolio investment in equities,
bonds and notes reached $92 billion during the period,
compared with $47 billion in thefirsthalf of 2002 and
$79 billion in the second half of 2001. This long-term
outflow for 2002 as a whole was the largest of the past
decade.
G-7 Finance Ministers and Central Bank Governors
referred to exchange rates among the major currencies
in their September 27, 2002 communique, reaffirming:
" W e will continue to monitor exchange markets closely
and cooperate as appropriate."
The United States did not intervene in foreign
exchange markets during the period.
Canada
Major Industrial Economies
The Canadian current account surplus declined to 1.3%
of G D P (sa) during the period from 1.7% of G D P
during the previous 6 months. The current account
surplus has been below 2 % of G D P for six consecutive
quarters.
Euro Zone Countries
The Euro Zone current account surplus increased to
1.1% of G D P (sa) during the period from 0.7% of G D P
in the first half of 2002. Euro Zone exports, valued in
dollars, rose 12.5% in the period from the first half of
2001, while Euro Zone imports increased 9.2%. For
The Canadian dollar fell 3.9% against the U.S. dollar
during the period, while the JP Morgan Broad Real
Trade Weighted Index of the Canadian dollar fell
5.0%. For 2002 as a whole, the Canadian dollar
appreciated 0.8% against the dollar. The Canadian
dollar floats freely. A 1998 study by the Bank of
The seven major currencies account fa 54.6% of the weight
in the broad index while the nineteen OITP countries account
for 45.4%.
2
Canada of its foreign exchange intervention concluded
that its prior policy of regular intervention had very
limited impact. Canada has not intervened in foreign
exchange markets since 1998, except to make a small
contribution to the brief G 7 intervention in support of
the euro in September 2000.
Latin America
Economic and political uncertainty in a number of
countries undermined growth and capital flows for
Latin America in 2002. Although the region saw real
economic contraction of about 0.5% in 2002, prospects
were improving by year-end with 2-3% growth for the
region expected in 2003. In the second half of 2002, a
sharp rise in Brazilian borrowing spreads contributed to
the Latin America Emerging Market Bond Index
(EMBI+) reaching a spread of 1,399 basis points over
U.S. Treasuries in September 2002 before falling to
roughly 1,000 basis points in December. In general,
adverse conditions led to weaker nominal exchange
rates throughout the region in 2002.
Argentina
The end of Argentina's one-to-one peg of the peso to
the U.S. dollar in early 2002 led to a sharp decline in
the peso.
The currency then stabilized and
strengthened from 3.81 Argentine pesos (ARP) per
dollar at end-June to A R P 3.36 at end-December for a
13.4% appreciation over the period. The peso has
strengthened further in 2003. The government has
eased deposit and exchange controls throughout the
year, although some restrictions remain in place.
After the severe economic and financial crisis at the
end of 2001 and in thefirsthalf of 2002, economic
indicators began to show an upward trend in the second
half of 2002, with seasonally adjusted at an annual rate
(saar) real G D P growth of 2.4% in the third quarter and
3.4% in the fourth. Consumer prices spiked in April
2002, but grew less rapidly thereafter with a net
increase of 4 1 % for the year through December 2002 .
exchange reserves grew by $847 million in the second
half of 2002 for an end-December reserve figure of
$10.5 billion.
Brazil
The real depreciated 20% over the period, with the
decline concentrated in the run-up to presidential
elections in late-October. Market concerns forced the
government to retire a significant portion of maturing
debt as domestic and external demand for public
securities was inadequate to match rollover
requirements.
The central bank took some steps to tighten monetary
policy, such as increasing reserve requirements,
overnight repurchase operations, and raising the
targeted Selic overnight interest rate from 1 8 % to 2 5 % ,
over the September-December 2002 period. However,
its inability to sterilize fully payments for retiring debt
contributed to increasing the money supply at 5 0 % and
1 2 7 % annualized rates in the third and fourth quarters
respectively.
A weakening currency and rising
monetary aggregates heightened inflationary pressures,
with the year-on-year consumer price index increasing
by 12.5% in December.
Real (price adjusted) currency depreciation contributed
to higher exports and helped reduce the current account
deficit from 4.6% of G D P in 2001 to 1.7% in 2002.
The central bank intervened in the foreign exchange
market in support of the real, with a resulting fall in net
international reserves from $26.5 billion at end-June to
$14.2 billion by end-December.
Mexico
The Mexican peso, which freely floats, depreciated
4.3% in the period following an 8.6% depreciation in
thefirsthalf of 2002. JP Morgan's index of the real
trade-weighted value of the peso depreciated 1.8% in
the period following a 2.8% depreciation in the first
half of 2002. The recent depreciation in the real tradeweighted peso is a small reversal of appreciation over
Outflows from the banking sector in the first half of the
several years
year were reversed in the period with total deposits
increasing by A R P 5.6 billion. Interest rates on oneMexico's macroeconomic fundamentals remain robust,
month central bank debt fell from about 7 0 % in August
although growth remained slow with real G D P in the
to less than 1 0 % by end-December 2002.
The
period increasing at a 1.3% rate (saar) from the first
monetary base increased sharply in the second half of
half of 2002 and 1.9% from the comparable period of
2002 but its growth rate fell in the first months of 2003.
2001. The Bank of Mexico tightened monetary policy
In 2002, Argentina enjoyed a current account surplus
in September and December. In spite of the economic
of 8 % of G D P due to a trade surplus of $16.4 billion slowdown, fiscal discipline has been maintained, with
6 0 % higher than in 2001 - with imports d o w n 5 8 % in
the deficit at 1.6% of G D P during the period.
2002 and exports d o w n 5 % . Argentine gross foreign
current account surpluses, China did not, because of its
deficits with its Asian trading partners.
The current account deficit fell to 1.3% of G D P in the
period, helped by higher prices for oil ( 1 0 % of exports)
and by weak domestic demand curbing import growth.
At $7.4 billion, inward direct investment covered over
9 0 % of the current account deficit in the period. During
this period, international reserves grew by $6 billion,
reaching $51.6 billion by end-December.
Central and Eastern Europe
In Russia, sustained high oil prices helped slow the
ruble's rate of nominal depreciation against the U.S.
dollar to 1 % (31.45R/S to 31.78R/$) during the period
compared to 4 % in the first half of 2002. Foreign
exchange market intervention, in response to inflows
from significant external borrowing by Russian
(mainly oil) companies as well as increased export
receipts, helped boost reserves $5.5 billion to a record
level $48 billion at end-December 2002. In Ukraine
the hryvnia continued stable during the period at
around 5.33 hryvnia/$.
Export growth softened in part because of softer OECD
high-tech demand, while higher oil prices also affected
the m a n y oil importers in the region. Reserves
generally increased significantly during the period,
with the exception of the Philippines. A number of
economies continued to exp erience net investment and
debt service outflows. In other cases, especially China,
foreign direct investment (FDI) inflows growth
supported reserve increases.
Inflation continued to decline throughout the region,
with China and H o n g K o n g experiencing deflation.
But exchange rate movements were mixed, with both
Korea's and Indonesia's currencies appreciating on a
real effective ( R E E R ) basis. Both Chinese and H o n g
K o n g currencies weakened significantly in R E E R
terms because of the weight of their trade with Korea
and Indonesia. The currencies of other economies
weakened only moderately in R E E R terms, with
After appreciating steadily for several years in real Taiwan and the Philippines weakening more than
others.
terms, the currencies of the major Central European
economies were relatively stable during the period.
China
This reflected both nominal depreciation versus the
euro, the key currency for trade, and a slowdown in
China's exports accelerated to a 30% y/y growth rate in
inflation in the major area economies, including
the period, up from a 1 4 % y/y growth rate in the
deflation in the Czech Republic. For example, the
previous half-year. Imports also accelerated to a 3 1 %
Polish zloty weakened slightly (-0.8%) versus the euro
y/y growth rate from a 1 0 % y/y rate in the previous
in nominal terms during the second half of 2002, while
period, so that China's surplus of trade in goods rose
strengthening by 5.0% versus the dollar (a reflection of
modestly to $17 billion (2.5% of G D P ) from $15
the dollar's decline against the euro). The drop in
billion (2.4% of G D P ) a year earlier.
inflation due to tight monetary policy and favorable
food prices supported the zloty's weakening by 2.2%
The current account surplus for 2002 will probably rise
for the period (8.6% for the year) in trade-weighted
modestly from the 1.5% of G D P level reached in 2001.
real terms. The Hungarian forint saw sizable nominal
China's current account surplus, as a per cent of G D P ,
gains against the euro in the period, but slowing
has
declined significantly since 1997 w h e n it reached
inflation allowed the forint to remain steady in real
4.1%
and the deterioration of China's trade surplus in
terms. In the Czech Republic, the nominal weakening
early 2003 suggests this trend will continue.
of the crown against the euro (6.8% during the period)
and deflation (0.4% y-o-y in December) contributed to
Although China had a relatively balanced global
a drop in the real effective exchange rate.
position, U.S. data show China had a bilateral
merchandise trade surplus with the U.S. of $60 billion
Asia
during the period, compared to $49 billion in the same
period a year earlier. In general, inputs from other
Economic recovery of emerging markets in Asia
emerging Asian countries are increasingly routed
moderated in the second half of 2002, as export growth
through China for assembly and export, principally to
slowed everywhere except for Indonesia and Korea.
the U.S. China has a significant deficit with nearly all
Virtually all economies had trade and balance of
its Asian trading partners. It has been estimated that
payment surpluses, with China increasingly providing
China's trade deficit with major emerging market
final processing and assembly of products from the rest
economies in East Asia was about $45 billion in 2001.
of Asia ultimately exported to the U.S. Hence, while a
China maintains a de facto currency peg to the dollar,
number of Asian countries had large global trade and
which it has kept within a tight band since 1995.
4
dollar during the period, while the JP Morgan real
trade-weighted index depreciated 2.6%. Official
reserves grew by U S $ 1 3 billion ( 9 % ) h the period to
$162 billion (nearly 4 0 0 % of total external debt).
Capital inflows increased sharply in the period,
although the growth of F D I decelerated to 8 % y/y from
1 9 % during the previous half. A s a result of the higher
current account surplus and higher capital inflows,
gross foreign reserves grew 1 8 % in the period to
$243 billion. The JP Morgan index of the real tradeweighted renminbi stayed fairly stable, depreciating
only 0.7%o, during this period. China continues to
maintain wide-ranging controls on both capital
outflows and inflows.
Malaysia
Malaysia's economy continued to expand in the period,
with G D P growth accelerating to 6.2% (q/q, saar) in
the third quarter before slowing to 3.0% in the fourth.
Growth was underpinned by private consumption and
development expenditure by the government, offsetting
softening external demand.
The current account
surplus declined to 7.4%) of G D P in the third quarter of
2002 (latest data available) from 9.9% a year earlier as
a result of accelerating imports. Although the United
States remained the largest destination of Malaysian
exports, exports to A S E A N countries grew by 14.6%
y/y, while exports to the United States grew by just
5.1%.
Korea
Korea's overall economy did well in the period, with
G D P growing 3.9% and 8.3% (q/q, saar) in the third
and fourth quarters of 2002, respectively. Stronger net
exports boosted the current account surplus in the
period to 1.2% of G D P , versus 0.8% a year earlier.
The capital and financial account excluding reserve
accumulation recorded a small surplus of 0.3% of
G D P , as domestic banks and firms increased foreigncurrency borrowing.
Korea maintains a floating exchange rate, intervening
only to curb what it views as excessive volatility. The
w o n appreciated 1.3% against the U.S. cbllar on a
nominal basis, while the JP Morgan real tradeweighted index appreciated 0.1%. Official intervention
was modest. Gross reserves increased by $9 billion
(8%) during the period to $121.4 billion, in part as a
result of interest earnings and valuation adjustments as
the euro appreciated against the dollar during the
period. A s of December 2002, reserves were
approximately 1 8 8 % of short-term external liabilities
(residual maturity basis), a decrease from 2 3 5 % at the
end of June. Korea maintains relatively few restrictions
on capital flows.
Taiwan
Malaysia has maintained a fixed peg to the dollar since
September 1998, w h e n it also imposed capital controls.
Controls have since been relaxed, but offshore trading
of the ringgit remains prohibited and foreign portfolio
investment by residents continues to be restricted. The
Malaysian authorities have steadfastly maintained the
peg despite alternating periods of downward and
upward pressure on the ringgit. The JP Morgan index
of the ringgit's real trade-weighted value depreciated
1.9% during the period. Since the introduction of the
peg, however, theringgithas appreciated 7.4% in real
traded-weighted terms. At the end of the period,
reserves stood at $34.6 billion, little changed from
levels in thefirsthalf of 2002.
Summary:
This report reveals a wide variety of exchange rate
policies used by the major trading partners of the
United States. Based on a broad review Treasury
concluded that no major trading partners of the United
States manipulated exchange rates under the terms of
Section 3004 of the Act during the period3.
Taiwan's economy grew by 4.1% and 4.7% (q/q, saar)
in the third and fourth quarters, respectively. Its
current account surplus grew to 8.9% of G D P in the
period, up from 7.9% in the second half of 2001.
Growing trade with Mainland China £ $13.9 billion
bilateral trade surplus during the period) and higher
foreign investment earnings are major factors in the
large current account surplus.
Section 3004 of the Omnibus Trade and Competitiveness Act of
1988 requires the Treasury to analyze annually the exchange rate
policies of foreign countries, in consultation with the I M F , and to
consider whether countries manipulate the rate of exchange between
their currency and the dollar for purposes of preventing effective
balance of payments adjustments or gaining unfair competitive
advantage in international trade. The Secretary of the Treasury is
required to undertake negotiations with those manipulating countries
that have material global current account surpluses and significant
bilateral trade surpluses with the United States, unless such
negotiations would have a serious detrimental impact on vital
national economic and security interests.
Taiwan's financial account excluding reserve
accumulation recorded a moderate, 1 % of G D P , deficit
during the period, as direct investment abroad surged,
portfolio investment abroad exceeded inflows, and
foreign currency deposits increased in expectation of a
Taiwan dollar ( T W D ) depreciation.
The T W D
depreciated 3.2% on a nominal basis against the U.S.
5
JS-358: Treasury Secretary John S n o w to Hold Press Conference Background Briefing
Page 1 of 1
ZZMiMMMiMMd^-^
:
PRESS ROOM
F R O M T H E OFFICE OF PUBLIC AFFAIRS
May 7, 2003
JS-358
MEDIA ADVISORY
U.S. Treasury Secretary John Snow to Hold Press Conference
Background Briefing by Senior Treasury Officials to Follow
U.S. Treasury Secretary John Snow will hold a press conference this afternoon at
3:30 P M in the Treasury Department Media Room immediately followed by a
background briefing with Senior Treasury Officials.
WHAT: Press Conference by Secretary John Snow
W H E N : 3:30 P M
W H E R E : Treasury Department Media Room
PARTICIPANTS: Secretary Snow
Senior Treasury Officials
C O V E R A G E : On-camera, on-the-record
Briefing will be open to Treasury Department and White House press pass holders.
htto ://w w w , irt a&sey/ȣess/releases/i s3 5 8 .htm
A 1^ C lr\r\r\ i-
2U03-5-9-11-46-16-9421: Secretary S n o w A n n o u n c e s Easing of U.S. Iraq Sanctions
I'age 1 01 z
FROM THE OFFICE OF PUBLIC AFFAIRS
To view or print the Microsoft Word content on this page, download the free Microsoft Word
Viewer.
M a y 7, 2003
2003-5-9-11-46-16-9421
Secretary Snow Announces Easing of U.S. Iraq Sanctions - Will Allow Vital
Humanitarian and Reconstruction Related Activities
U.S. Treasury Secretary John Snow today announced that the United
States is suspending aspects of the Iraqi sanctions regime to permit the
export of vita! humanitarian goods and services and cash remittances from
individuals in the U.S. to Iraqis.
"The easing of U.S. sanctions will bring much needed aid and humanitarian
relief to the Iraqi people as they begin the process of rebuilding their lives
after more than two decades of brutal dictatorship," Secretary S n o w stated.
At the direction of Secretary Snow, the Treasury Department's Office of
Foreign Assets Control ( O F A C ) has issued four n e w general licenses that
permit transactions important to the humanitarian needs of the Iraqi people
without prior U.S. Government authorization.
Under the new rules, individuals in the U.S. may send remittances of up to
$500 per month to any person in Iraq for non-commercial humanitarian
purposes, such as m o n e y to support friends, loved ones, or others in need
in Iraq. Also, all activities funded by the U.S. government in support of
humanitarian assistance or reconstruction efforts in Iraq necessary to fulfill
obligations under international law to provide for the welfare and security of
the Iraqi people are permitted by the licenses. Private humanitarian
activities, conducted by any U.S. person or organization, and more
liberalized exportation of humanitarian related goods are also permitted so
long as the U.N. Sanctions Committee is given notice, through the U.S.
State Department, and an opportunity to object.
However, the export of certain goods, controlled for export to Iraq for
national security purposes, will require a specific license and all frozen
assets of Iraqi entities remain frozen. Regulations governing trade or travel
with Iraq administered by other federal agencies are not affected by this
action.
U.S. sanctions against Iraq were first established by President George
H.W. Bush on August 2, 1990 under Executive Order 12722. Additional
restrictions were put in place by the Iraq Sanctions Act, which w a s passed
by Congress shortly after President Bush's executive order and b e c a m e
effective November 5, 1990.
As the reconstruction of Iraq gets underway, these licenses will allow the
flow of goods and services vital to the reconstruction process and will help
meet the humanitarian needs of the Iraqi people as they begin their n e w
lives in freedom.
httn://www.treas.gov/press/releases/2003591146169421 .htm
7/29/2003
±\J\JO-j-y-11_4o-10-V421: secretary S n o w Announces basing oi U.S. Iraq Sanctions
rage z o i z
Related Documents:
• Iraq Sanctions Fact Sheet
ittp ://www.treas.gov/press/releases/2003 591146169421 .htm
7/29/2003
DEPARTMENT OF THE TREASURY
Office of Public Affairs
May 7, 2003
FACT SHEET:
Treasury Announces Easing of U.S. Iraq Sanctions
Today's Action:
U.S. Treasury Secretary John Snow today announced that the Treasury Department's
Office of Foreign Assets Control (OF AC) has issued four general licenses permitting
many activities vital to the humanitarian needs of the Iraqi people. Today's action will
allow essential goods and services, as well as fundsfromloved ones abroad, to flow into
Iraq as rebuilding begins and the Iraqi people start a new life in freedom.
G E N E R A L LICENSE
The Treasury Department's Office of Foreign Assets Control (OFAC) has issued
licenses that, without further authorizationfromthe U.S. Government, will allow the
following:
> Remittances of up to $500 per month to persons in Iraq
• This allows anyone in the U.S. to send much needed funds to friends, loved
ones, or other Iraqis in need.
> Activities paid for with U.S. Government funds to fulfill obligations unde
international law to enhance the welfare and security of the Iraqi people
> Privately financed humanitarian activities in Iraq
• These activities must meet the definition of humanitarian relief consisten
U.N. sanctions. This includes the provision of food, medicine, and shelter as
well as educational, cultural, recreational, and human rights-related activities,
and activities to ameliorate the effects of or to investigate war crimes.
• Prior to exporting any goods, a notice must be submitted to the U.N. Sanct
Committee via the U.S. State Department. If the U.N. Sanctions Committee
raises no objection, then the transaction may go forward.
> Liberalized Humanitarian Exports to Iraq
• Prior to exporting any goods, a notice must also be submitted to the U.N.
Sanctions Committee via the U.S. State Department. If the U.N. Sanctions
Committee raises no objection, then the transaction may go forward.
**MORE**
SPECIFIC LICENSES FOR CERTAIN CONTROLLED ITEMS:
The President has signed a waiver of the Iraq Sanctions Act that will allow the issuance
of specific licenses for the exportation of certain goods and technology, controlled for
national security reasons, by the Department of Commerce for export to Iraq. Requests
for these specific licenses should be submitted to Treasury's Office of Foreign Assets
Control.
For example, a U.S. government contractor charged with dredging the port at Umm Qasr
was previously prohibited from bringing in laptop computers essential to their work in
Iraq. O F A C can n o w issue a specific license authorizing the export of these computers.
Non-Governmental Organizations
The Office of Foreign Assets Control ( O F A C ) issued a rule March 13, 2003 that allowed
O F A C to grant registration numbers permitting nongovernmental organizations ( N G O s )
engaged in humanitarian relief efforts to operate in Iraq. N G O s have been operating in
Iraq under O F A C registration numbers for weeks and continue to do so.
Background
President George H.W. Bush established the U.S. sanctions regime against Iraq when he
signed Executive Order 12722 August 2, 1990. The U.S. Congress soon after passed the
Iraq Sanctions Act which imposed additional sanctions. The Iraq Sanctions Act became
effective November 5, 1990.
###
JS-359: Treasury and IRS Provide Guidance to Help Taxpayers
Page 1 or 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 7,2003
JS-359
Treasury and IRS Provide Guidance to Help Taxpayers
that use Fair Market Value Method of Interest Allocation
Today, the Treasury Department and the internal Revenue Service issued a
revenue procedure providing guidance to taxpayers that elect to apportion their
interest expense on the basis of the fair market value of their assets.
Today's release provides much-needed guidance to taxpayers on the information
and documentation that may be providedtosupport a fair market value election for
interest allocation purposes," stated Assistant Secretary for Tax Policy Pamela
Olson. "It allows taxpayers maximum flexibility in the time for making such an
election, while at the same time allowing issues relating to the election to be
considered and resolved on atimelybasis upon audit."
Generally, taxpayers receive a credit against their U.S. tax liability for income taxes
paid or accrued to a foreign country or to a U.S. possession. The amount of the
credit is limited to the U.S. tax liability attributable to the taxpayer's net income from
foreign sources. To determine net foreign source income, the taxpayer must
allocate and apportion its expenses. Taxpayers are required to allocate and
apportion interest expense based on their assets, and m a y elect to do so based on
the fair market value of those assets. A taxpayer making such an election must
establish the fair market value of its assets to the satisfaction of the IRS.
The revenue procedure will assist taxpayers that use the fair market value method
for interest expense apportionment. The revenue procedure makes clear that
taxpayers m a y make this election for any taxable year for which the statute of
limitations remains open. The revenue procedure also contains a list of
documentation and information that will facilitate the IRS's audit of the taxpayer's
election and determination of the fair market value of the taxpayer's assets. Finally,
the revenue procedure sets forth the procedures the IRS will follow during an audit
of a taxpayer that has elected to use the fair market method, including the timing for
supplying the documentation and information. If a taxpayer chooses to provide the
information and documentation described in the revenue procedure within the time
specified, the IRS commits to consider the taxpayer's fair market value election
promptly so that the audit cycle can be closed in the ordinary course.
The text of Revenue Procedure 2003-37 is attached.
h t t p 7 / w w w treas. gov/nress/releases/is359.htm
7/29/2003
Part III
Administrative, Procedural, and Miscellaneous
26 C F R 601.105: Examination of returns and claims for refund, credit, or abatement;
determination of correct tax liability.
(Also Part I, §§ 864; 1.861-8T; 1.861-9T.)
Rev. Proc. 2003-37
S E C T I O N 1. P U R P O S E
This revenue procedure describes documentation and information a taxpayer that
uses the fair market value method of apportionment of interest expense m a y prepare
and m a k e available to the Internal Revenue Service ("Service") upon request in order to
establish the fair market value of the taxpayer's assets to the satisfaction of the
Commissioner as required by §1.861-9T(g)(1)(iii). It also sets forth the procedures to be
followed in the case of elections to use the fair market value method.
SECTION 2. BACKGROUND
Section 901 of the Internal Revenue Code ("Code") allows taxpayers to elect to
receive a credit, subject to the limitations of section 904, for any income, war profits,
and excess profits taxes paid or accrued during the taxable year to any foreign country
or to any possession of the United States. Section 904 generally limits the amount of
credit taken under section 901 to the portion of the taxpayer's U.S. tax attributable to the
1
taxpayer's taxable income from sources without the United States.
Sections 862(b) and 863(a) provide that taxable income attributable to gross income
from foreign sources shall be determined by deducting the expenses, losses, and other
deductions properly apportioned or allocated thereto and a ratable part of any
expenses, losses, and other deductions that cannot be definitely allocated to s o m e item
or class of gross income. Section 864(e)(2) provides that all allocations and
apportionments of interest expense must be m a d e on the basis of assets rather than
gross income. Sections 1.861-8T and 1.861-9T provide general rules governing the
asset method of interest expense apportionment, and §§1.861-8T(c)(2) and 1.8619T(g)(1)(ii) provide that a taxpayer apportions its interest expense on the basis of the
tax book value of its assets or, at the election of the taxpayer, the fair market value of its
assets. Under both methods, §1.861-9T(g)(3) requires assets to be characterized
according to the source and type of income that they generate, have generated, or m a y
reasonably be expected to generate.
Section 1.861 -9T(g)(1 )(iii) requires a taxpayer that elects to apportion its interest
expense using the fair market value method to establish the fair market value of its
assets to the satisfaction of the Commissioner for each taxable year. If a taxpayer fails
to establish the fair market value of an asset to the satisfaction of the Commissioner,
the Commissioner m a y determine the appropriate asset value. If a taxpayer fails to
establish the value of a substantial portion of its assets to the satisfaction of the
Commissioner, the Commissioner m a y require the taxpayer to use the tax book value
method. Section 1.861-9T(h) provides specific rules for valuing assets for taxpayers
that use the fair market value method of interest expense apportionment.
SECTION 3. DOCUMENT AND INFORMATION REQUIREMENTS
.01 If a taxpayer satisfies the requirements of sections 3.02 and 3.03 of this revenue
procedure regarding the preparation and production of documents and other information
relating to valuation of assets and the Commissioner determines that the taxpayer's
valuation of an asset is reasonable, then the taxpayer will have established the fair
market value of the asset to the satisfaction of the Commissioner pursuant to §1.861 9T(g)(1)(iii).
.02 A taxpayer satisfies the requirements of this section 3.02 if the taxpayer prepares
and makes available to the Service upon request a narrative statement describing the
apportionment of interest expense under the fair market value method in sufficient detail
such that the Service can reconcile the information on Schedule H of Form 1118 with
such apportionment methodology, which narrative statement incorporates or is
accompanied by the folowing information:
(a) A description of how the taxpayer calculated the aggregate value of the
taxpayer's assets on the last day of its taxable year. In the case of a publicly
2
traded corporation, the taxpayer must describe h o w the taxpayer calculated the
aggregate trading value of stock traded on established securities markets at
year-end and h o w the taxpayer calculated year-end liabilities to unrelated
persons and pro rata share of year-end liabilities of all related persons o w e d to
unrelated persons as required by §1.861-9T(h)(1)(i). In the case of a corporation
that is not publicly traded, the taxpayer must describe h o w the taxpayer
calculated the aggregate value of its assets by reference to the capitalization of
corporate earnings as required by §1.861 -9T(h)(1 )(i).
(b) A description, by entity, of tangible assets referred to in §1.861 -9T(h)(1 )(ii). With
respect to assets that have significant value or that generate significant income,
the description must include detailed information for the asset. For example, with
respect to real property, the description should include location, zoning, and
square footage.
(c) A n explanation of company structure and an identification of cost centers or other
reporting divisions or units to which assets are assigned.
(d) A description of the valuation techniques used to value tangible assets and the
reasons for selecting such valuation techniques over alternative techniques. A n y
valuation study relied upon by the taxpayer must include an explanation
describing the valuation of the tangible assets as set forth in §1.861 -9T(h)(1 )(ii) in
detail sufficient to enable the Service, upon examination, to duplicate the
methodology used to obtain those fair market values. The taxpayer must also
provide a description of all assumptions m a d e in applying the valuation
techniques used in the study, including but not limited to, discount rates,
obsolescence factors, and risk adjustments.
(e) A n explanation of the manner in which tangible assets were combined into
reasonable groupings and the reasons for such grouping.
(f) A n identification of any fungible property, such as commodities, that w a s valued
using statistical methods of valuation, and an explanation of such methods.
(g) A description of the apportionment of interest expense to intangible asset values
as computed under §1.861-9T(h)(1)(iii).
.03 If the taxpayer or a third party used any computer software to determine asset
values, characterize assets in accordance with §1.861-9T(g)(3), or calculate the
taxpayer's foreign tax credit limitation, the taxpayer satisfies the requirements of this
section 3.03 if the taxpayer m a k e s available to the Service upon request the following:
(a) Any computer software executable code used for such purposes, including an
executable copy of the version of the software used in the preparation of the
taxpayer's return (including any plug-ins, supplements, etc.), and a copy of all
related electronic data files. Thus, if software subsequently is upgraded or
supplemented, a separate executable copy of the version used in preparing the
taxpayer's return must be retained.
(b) Any related computer software source code acquired or developed by the
taxpayer or a related person, or primarily for internal use by the taxpayer or such
3
person rather than for commercial distribution.
(c) In the case of any spreadsheet software or similar software, any formulae or links
to supporting worksheets.
For these purposes, "software," "computer software executable code," and "computer
software source code" have the meanings provided for those terms under section
7612(d). For example, computer software executable code includes any related user
manuals or similar documentation. Finally, nothing in this revenue procedure shall
affect the limitations and protections applicable to s u m m o n s e s for software under
section 7612, or the authority of the Commissioner generally to issue a s u m m o n s for
information in accordance with subchapter A of Chapter 78 of the Code.
SECTION 4. USE OF FAIR MARKET VALUE METHOD
.01 A taxpayer may elect to use the fair market value method with respect to any
taxable year for which the statute of limitations has not closed. However, an election to
use the fair market value method that is not m a d e until an audit of the taxable year to
which the election relates has commenced, or a taxpayer's failure to provide timely the
documentation and other information supporting the valuation of the taxpayer's assets,
creates administrative difficulties for the Service. Accordingly, section 4 of this revenue
procedure sets forth the procedures the Service will follow in the case of taxpayers
using the fair market value method and the actions it will request of taxpayers.
.02 In the case of a taxpayer that has made an election to use the fair market value
method prior to the opening conference for the audit of the taxable year to which the
election relates or w h o makes such an election within 90 days of such opening
conference, if the Service issues a written information document request asking the
taxpayer to provide the documents and other information described in sections 3.02 and
3.03 of this revenue procedure and the taxpayer complies with such request within 30
days of the request, then the Service will complete its examination, if any, with respect
to the taxpayer's method of interest expense apportionment for that year as part of the
current examination cycle. If the taxpayer does not provide the documents and
information described in sections 3.02 and 3.03 within 30 days of the request, then the
procedures described in section 4.03 of this revenue procedure shall apply.
.03 If a taxpayer makes an election to use the fair market value method more than
90 days after the opening conference for the audit of the taxable year to which the
election relates or the taxpayer does not provide the documents and information as
requested in accordance with section 4.02 of this revenue procedure, then the Service
will in a separate cycle determine whether an examination of the taxpayer's method of
interest expense apportionment is warranted and complete any such examination. The
separate cycle will be worked as resources are available and m a y not have the s a m e
estimated completion date as the other issues under examination for the taxable year.
The Service m a y ask the taxpayer to agree to extend the statute of limitations on
4
assessment and collection for the taxable year to permit examination of the taxpayer's
method of interest expense apportionment, including an extension limited, where
appropriate, to the taxpayer's method of interest expense apportionment.
.04 For a taxable year for which the taxpayer and the Service have agreed to use the
Limited Issue Focused E x a m (LIFE) process announced in IR 2002-133 (December 4,
2002), the time periods agreed to in that process shall apply for purposes of both the
election to use the fair market value method and the provision of documents and other
information with respect to such method.
SECTION 5. EFFECTIVE DATE
Section 3 of this revenue procedure is effective for taxpayers using the fair market
value method for taxable years ending after M a y 7, 2003. Section 4 of this revenue
procedure is effective for fair market value method elections relating to taxable years for
which the opening conference of the audit occurs more than 30 days after M a y 7, 2003.
SECTION 6. PAPERWORK REDUCTION ACT
The collection of information contained in this revenue procedure has been reviewed
and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1833.
An agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection of information displays a valid O M B
control number.
The collection of information in this revenue procedure is in section 3, under which
taxpayers m a y prepare and m a k e available to the Commissioner upon request the
documents and other information described therein in order for the Commissioner to
make a determination regarding whether a taxpayer's valuation of an asset is
reasonable. This information will be used by revenue agents to assist in determining if
the taxpayer has established the fair market value of the taxpayer's assets to the
satisfaction of the Commissioner. The likely respondents are multinational businesses
or other for-profit institutions.
The estimated total annual reporting and/or recordkeeping burden is 625 hours. The
estimated annual burden per respondent/recordkeeper is an estimated average of 5
hours. The estimated number of respondents and/or recordkeepers is 125. The
estimated frequency of response is on occasion.
Books or records relating to a collection of information must be retained as long as
their contents m a y become material in the administration of any internal revenue law.
Generally tax returns and tax return information are confidential, as required by 26
5
U.S.C. 6103.
SECTION 7. DRAFTING INFORMATION
The principal author of this revenue procedure is Melissa Arndt of the Office of the
Associate Chief Counsel (International). For further information regarding this revenue
procedure contact Ms. Arndt on (202) 622-3850 (not a toll-free call).
6
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 CONTACT: Office of Financing
May 07, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 5-YEAR NOTES
Interest Rate: 2 5/8% Issue Date: May 15, 2003
Series:
F-2008
Dated Date:
CUSIP No:
912828AZ3
Maturity Date:
High Yield:
2.680%
Price:
May 15, 2003
May 15, 2008
99.744
All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 98.89%. All tenders at lower yields were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type Tendered Accepted
Competitive
Noncompetitive
FIMA (noncompetitive)
$
37,462,300
166,397
50,000
$
17,783,802
166,397
50,000
SUBTOTAL 37,678,697 18,000,199 1/
Federal Reserve 335,643 335,643
TOTAL $ 38,014,340 $ 18,335,842
Median yield 2.660%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
2.610%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 37,678,697 / 18,000,199 = 2.09
1/ Awards to TREASURY DIRECT = $106,646,000
http ://www.publicdebt.treas.go v
y,
3 GO
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 CONTACT: Office of Financing
May 07, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 5-DAY BILLS
Term: 5-Day Bill
Issue Date:
Maturity Date:
CUSIP Number:
May 08, 2003
May 13, 2003
912795MZ1
High Rate: 1.145% Investment Rate 1/: 1.171% Price: 99.984
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 51.36%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
Accepted
38,405, 000
0
0
$
10,000,160
0
0
38,405, 000
10,000,160
0
0
38,405, 000
$
10,000,160
Median rate 1.120%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.100%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 38,405,000 / 10,000,160 = 3.84
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
JS 3<W
Jb-362: Testimony of W a y n e A. Abernathy before the Subcommittee on Fmancial mstitut... rage i
PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 8, 2003
JS-362
Testimony of
W a y n e A. Abernathy
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
Good morning Chairman Bachus, Ranking Member Sanders, and members of the
subcommittee. It is an honor to appear before you today. There could hardly be a
more important subject to consider than the information infrastructure of our
financial system. So much of the economy, and the welfare of every participant in
the economy, is dependent on getting the legal structure of that system right.
In 1996, the Congress undertook an experiment, to determine whether uniform
national standards for financial information sharing was the right approach. These
uniform standards were embodied in the provisions of the Fair Credit Reporting Act
(FCRA). Those provisions are scheduled to sunset at the end of this year. It is
therefore appropriate now that Congress evaluate the results of that experiment.
W e are eager to participate in that evaluation as w e develop Administration policy.
To begin with, since the FCRA experience with uniform national standards began,
w e have witnessed significant increases in the availability of credit to Americans. It
is the impact of the legislation on Americans—consumers and businesses—that
should guide us in our considerations. W e should keep in mind that all Americans
have two interests at stake in this matter: an interest in access to credit and other
financial services, and an interest in the security of their personal financial
information. A s Congress reviews these uniform standards, these two interests
need to be weighed and taken together and accommodated, i believe that they can
be.
In this evaluation, we would suggest considering the following questions:
• Do uniform national standards facilitate or harm the fight against identity theft?
Can greater progress against the crime be made with or without uniform national
standards for information sharing?
• Do uniform national standards strengthen or undermine the security of personal
financial information?
• Do uniform national standards reduce or increase the costs to consumers of
financial services?
• D o uniform national standards bring more or fewer people into the mainstream of
financial services?
• To what extent do uniform national standards lead to an increase or decrease in
the variety of financial services offered to consumers?
• To what extent do uniform national standards help or hinder job creation?
• Is small business development helped or harmed by uniform national standards?
• What would be the impact on unwanted customer solicitations if the uniform
standards expired? To what extent are such solicitations facilitated by uniform
national standards?
• In short, what costs or benefits to the economy as a whole can be attributed to
uniform national standards for information sharing, and what would be the
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economic impact if they were allowed to expire?
Undoubtedly, there are other questions that should be examined.
At Treasury, one area that we have been particularly concerned about is the role
that F C R A uniform national standards play in the fight against identity theft. T h e
importance of this concern can be understood by a brief review of the nature of the
crime.
Identity theft is one of the fastest growing crimes in America. By some estimates,
there will be as m a n y as one million n e w victims this year, with m a n y times that
number already in the ranks of sufferers.
In a recent national survey of homeowners, 12% reported having been casualties of
identity theft, and 2 2 % reported knowing family, friends, or acquaintances w h o have
been. It is hard to think of another crime that has touched such a large portion of
Americans. In that s a m e survey, 9 0 % said that they were concerned that they
might be a target of identity theft. A separate survey recently found that Americans
are more concerned about becoming a victim of identity theft than they are of losing
their job. N o wonder that 8 3 % believe that the government should take steps to
fight the crime.
Many suffer from the unauthorized use of their own legitimate credit card. This is
one of the milder versions of the crime, and today perhaps the most c o m m o n .
Fortunately, it is also an aspect where great progress has been achieved in fighting
it. A s long as the consumer is diligent and promptly reports lost or stolen cards or
unauthorized charges, the direct liability to the card holder is zero.
The Truth in Lending Act sets the maximum loss at $50, but credit card companies
have found that there are great benefits in consumer confidence from eliminating all
liability for the innocent victim. The loss still occurs, though, and it adds up to
billions each year, ultimately born by all card users in higher prices and higher
interest rates.
Credit card companies also have elaborate and well-designed information-sharing
systems in place, neuronetworks, that monitor customers' accounts and quickly
notify them of charges that are out of the ordinary, such as purchases outside the
customers' normal buying patterns or far from home. This is an important deterrent
to this type of identity theft. Other financial sectors are working on deterrents
appropriate for their business. Much more needs to be done.
The crime occurs in great variety. As I speak, somewhere, someone is using
someone else's good n a m e to engage in fraud, to steal from a furniture store, rob a
bank account, engage in stock swindles, write bad checks, run up huge phone bills,
escape gambling debts, shield illegal drug deals, create false resumes,
impersonate doctors or other professionals, destroy reputations.
Do not look for patriotism among identity thieves. When our soldiers, sailors, and
airmen m o v e to the front lines to engage the enemy, the identity thieves are ready
to take advantage of their absence to steal their identities to commit fraud. I would
guess that the soldier in the Third Infantry Division in Baghdad is not giving much
thought to his bank account, or worrying about his credit cards, certainly not looking
at his financial statements. But the fraudster is paying attention, for he knows that
the fraud could go undetected for a long time, unless friends and family are vigilant,
on the watch here at h o m e over the financial affairs of the service m a n and w o m a n
overseas.
Not even the dead are immune from identity theft. Necrolarceny is one of the more
repulsive, but not uncommon, faces of the crime. Thieves scan the obituaries and
gather the information provided there to impersonate the deceased. From the
obituary, the thief harvests a wealth of knowledge: the full name, a maiden name,
age, n a m e s of family members, possibly education and charitable activities—all
types of information that the thief can draw from to impersonate the deceased and,
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possibly, other family members. And closing down financial accounts is not usually
high on the To Do List of bereaved family members. Yet there m a y be a tragic
surprise awaiting when a will reaches probate and the family members learn how
financially active their mother was in the days and weeks following her death.
No one sitting in this hearing room is immune from identity theft. Undoubtedly,
there are many here w h o have been victimized or know someone w h o has. There
may be some here w h o are being victimized right now and won't know of it for
several more weeks or months.
Perhaps someone is dumpster diving, going through your trash to get important bits
of information about you or your accounts. Perhaps someone will call,
impersonating a government employee, asking to "verify" some of your personal
data in order to continue to send you your Social Security check or veterans
benefits. Maybe you will be snared by a supposedly "free" service on the internet,
that only needs your name, address, date of birth, and so on, in order to provide
you with access to the free service.
Arguably, the most virulent form of identity theft occurs where the crook takes your
good n a m e and uses it to open new accounts that you know nothing of, with the
statements going to places you have never been, so that weeks and months pass
without your knowledge of the fraud. The crook may even keep up minimum
payments for a time until he can m a x out on the credit limits. Then he disappears,
the payments stop and the creditors come looking. But they don't find the crook.
They don't look for the crook. They look for you. And you discover the fraud when
you can't pay for your dinner because your charge will not clear. Your h o m e equity
loan is turned down because there already is a lien on your house. You lose your
job, because, though your boss is very sorry and thought you were an exemplary
employee, he can't have someone in such a sensitive job who has such a poor
credit history.
And then you will see perhaps the most painful face of all the many faces
associated with the crime of identity theft, the face of the victim. Where do you go?
H o w do you begin to clear your name? H o w do you convince creditors all around
the country that you never made those transactions, that there must be some
mistake? Do you turn to your local police department? They might fill out a police
report, but victims report that many do not. What can the local police do about it
anyway? The crime took place in Bigtown, not in your h o m e town. Will the Bigtown
police take up the case? Maybe, but you live in Virginia. W h o will handle a case
for a victim living in Charlottesville, for fraudulent transactions made in Miami,
Denver, and San Francisco, with money borrowed over the Internet from a bank
headquartered in Philadelphia? Crooks have long sought to exploit State lines to
avoid punishment.
The General Accounting Office reports that it can take victims as many as 175 man
hours to clear their name and their records. That would be the equivalent of more
than one full month of 8-hour days, five-day work weeks of full-time work. Of
course, that is spread out over time, over months and sometimes years, with
thousands of dollars of expenses.
What role have the uniform national standards in the FCRA played in the fight
against identity theft? What role might they play? Are they more likely to cause the
crime, or can they be enlisted in the fight against it?
The answer lies in information. Information is what the FCRA is all about. So, first
of all, w e need to consider the role of information in identity theft. Certainly the
crook uses information. He uses information to craft a mask, as much in the
likeness of his victim as he can make it. What steps can w e take, if any, to deny
the thief the information tools he needs to make his mask? In answering that
question, what tools can w e find to fight the crime?
But does it end there? In what way might we be able to put information to work to
fight the crime? If the merchant or banker knows more about his customer than the
thief does, can w e unmask the crook and prevent a loss from occurring? If
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information about the thief can cross state lines faster than he can, might w e enable
the sheriff to meet the thief at his next stop?
And what role does information play in restoring the records of victims? Are
uniform standards contributing to placing bad information on consumer records?
Can they be harnessed in the effort to eradicate the false information?
As we consider the uniform standards for information sharing under the FCRA, we
anticipate working with you to consider how this review can help in the crucial fight
against identity theft.
So, as I said in the beginning, whether considered from the impact on each family in
America, or on the economy as a whole, there could hardly be a more important
inquiry than the one you begin today. W e are eager to join with you in that review.
It is vitally important that w e get the answer right.
Thank you. I will now be pleased to answer your questions.
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F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 8, 2003
2003-5-8-18-32-10-27759
Treasury Department Applauds Defense Department Efforts to Improve
Financial Education of Armed Services and Civilian Employees
The Treasury Department's Office of Financial Education today formally recognized
the Department of Defense for its exemplary efforts to improve the financial
knowledge and skills of the U.S. armed services personnel and the Department's
civilian employees.
"The Defense Department's Financial Readiness Campaign is a model program for
financial education," said Treasury Deputy Assistant Secretary for Financial
Education Judy Chapa at a Treasury event launching the Defense Department's
campaign. "It contains the critical components necessary for a successful financial
education program and w e commend the Department for its efforts."
The Treasury Department's Office of Financial Education, established in 2002,
seeks to ensure that all Americans have access to financial education programs.
The Office works to ensure that people can gain the practical knowledge and skills
that they need to make informed financial choices throughout various life stages. It
focuses on four key areas: basic savings, credit management, homeownership and
retirement planning.
"A solid knowledge of financial management is one of the most important tools that
w e can give to all Americans, particularly our children, our retirees and our recent
immigrants," said Treasury Under Secretary for Domestic Finance Peter R. Fisher.
"A successful financial education program is one that will produce measurable
results, and ensure a better future for hard-working families."
The Office helps oversee Treasury's financial education policymaking and
coordinates financial education initiatives within the Department and all of its
bureaus. The Office also works with many federal government agencies involved in
financial education, and chairs the Federal Government Financial Education
Coordinating Group. The Office, part of Treasury's Office of Domestic Finance, is
headed up by Deputy Assistant Secretary Judy Chapa.
More information about Treasury's Office of Financial Education is available at
www.treasury.gov
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W PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 9, 2003
2003-5-9-7-43-22-6498
Remarks of Under Secretary for Domestic Finance Peter R. Fisher to The
Stanford Institute for Economic Policy Research's Conference on U.S. Budget
Policy and Practice Washington, D C
Tonight I am not going to try to expand your understanding of the federal
government's financial position. Many of you have spent all day, and s o m e
of you distinguished careers, refining our grasp of these issues. There is
little I can add. I a m , however, going to ask you to turn your attention to
practical solutions here in Washington, to help turn your insights into
action.
To put the federal government's finances on a sustainable, long-run path,
w e need to expand the economy more rapidly than w e increase future
federal outlays. This is easily said. A s everyone here this evening knows,
the particular challenge is that outlays are already scheduled to increase
rapidly in the coming decades to pay for the collective retirements and
health care of m y generation.
How to expand our economy is the subject of active political debate. Many
of us recommend that w e enhance incentives for private savings and
investment. After all, w e must pay for our collective retirements either by
saving and investing more than w e n o w do or by reaching lower standards
of living in the future than w e could have. Removing the current distortions
and biases of the tax code would be a good first step. Others see the
matter differently and have their o w n ideas. But at least the issue is joined.
How to constrain the growth of future federal outlays does not get equal
time in our national debate. M a n y condemn current budget deficits and
urge greater fiscal discipline. But w e rarely debate practical ideas for h o w
to create incentives to restrain future federal outlays.
Unfortunately, we do not simply need "stronger" or "better" incentives for
fiscal discipline; w e must overcome the current perverse incentives which
impede reforms that could m o v e us toward real fiscal balance.
I have previously tried to illustrate the perversity of the federal
government's reliance on cash accounting in a couple ways. You can think
of the federal government as a gigantic insurance company which only
does its accounting on a cash basis - only counting premiums and payouts
as they go in and out the door and ignoring its accrued liabilities to policy
holders. That's what might be called an accident waiting to happen.
Alternatively, one m a y think of guiding our w a y to fiscal balance by looking
only at debt and deficits as being like driving a car while looking only in the
rear-view mirror.
Permit me to try one more illustration of our problem. Imagine a family that
thinks only in terms of cash accounting. The family has a checking account
with overdraft protection which provides that unpaid balances at the end of
the month are swept into a h o m e equity loan. And they have a mortgage.
S o m e months they run no overdrafts but most months they do and these
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are added to the h o m e equity loan. Our family is at ease because even
though the h o m e equity loan tends to grow each month, it is still
reasonable compared to their income and the value of their home.
Unfortunately, this picture ignores many of their most important financial
commitments: their car lease, the promise to pay for the children's college
education, the expected bills for the orthodontist, a wedding or two, and
their commitments to charities. And it overlooks their retirement needs.
If our family ignores the totality of their future financial commitments, and
only recognizes them on a cash basis as they drain current monthly
income, they cannot understand their real financial position. With this
limited knowledge, they m a y even be tempted to try to improve their
monthly cash flow by adding to their future liabilities. Refinancing with a
larger mortgage, perhaps with "cash out," will improve monthly income on a
cash basis, but further leverage the family's real financial position.
Most of us would recognize that this family is in need of serious financial
advice. The federal government is not so different. Both need a forwardlooking understanding of their financial commitments. Both are caught in a
backward looking framework, focusing excessively on their deficit of current
income and the debt they incur to finance those deficits. Both ignore the
future obligations they have incurred which will eventually become current
expenses. Both need a good lesson in accrual accounting and net present
value.
Now, in fairness, the federal government is not as badly off because some
m e m b e r s of the federal family - and our friends in academia - have been
hard at work for m a n y years trying to bring greater insight and discipline to
bear.
Over the last twenty years, much has been done to frame demands for
future federal outlays with more rationality and foresight, beginning with
Gramm-Rudman-Hollings in 1985 and 1987, the Credit Reform Act of
1990, the Budget Enforcement Act of 1990, and the Government
Management Reform Act of 1994, which mandated accrual statements for
the government, reported in the annual Financial Report of the United
States Government. In addition, scholars have m a d e great advances in
measuring our true fiscal position - likely revenue sources, the scale of the
entitlement liabilities, and generational accounting - as your conference
today exemplifies.
Thanks to your work, we do not want for concepts and ideas about how to
value and measure the federal government's financial position. W e can all
n o w imagine better ways for the legislative and executive branches to
understand the government's liabilities and likely revenues.
Yet more needs to be done.
In 1862, President Lincoln succinctly articulated the challenge of
governance when he wrote Congress: "It is not 'can any of us imagine
better' but, 'can w e all do better?'"
It is not enough for us to imagine a better way of accounting for the federal
government's liabilities. Accrual accounting, net-present value analysis,
and generational accounting are powerful concepts and w e must continue
to refine them and m a k e more people aware of them. But w e n o w need to
find practical ways to inject these concepts into the political, legislative, and
administrative process, to re-shape the day-to-day incentives for
policymakers - to help us "all do better."
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W e need to devise a political process that forces demands for future
federal outlays to be prioritized under s o m e measure of forward-looking
resource constraints, while rewarding ideas that grow the economy. W e
need to find ways to provide members of Congress with coherent forwardlooking measures of the fiscal impact of legislative proposals - before they
have to vote.
Previously, I have suggested that we may need a total liability pay-go even
more than w e need a budget pay-go. This is a good turn of phrase, but I
c o m e up short in suggesting h o w w e might actually do this.
All of us, whether from the academy, the private sector, or the corridors of
Washington, are here tonight because w e recognize the importance of
tackling our fiscal challenge. You have articulated the defects of cash
accounting and the promise of forward-looking fiscal measures. Please
n o w help turn these concepts into the tools and incentives for better
decision making in Washington.
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F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 10,2003
2003-5-10-9-47-39-24249
Commencement Address by Treasury Secretary John W. Snow at the
University of Toledo, Toledo, Ohio
Good morning. Thank you, Joan (Browne, Chair of the Board of Trustees) for that
lovely introduction. It's great to be back at the University of Toledo, m y alma mater,
and it's great to be back in m y hometown, with such a warm welcome.
First of all, my heartiest congratulations to you the graduates. But I understand one
thing very clearly; a commencement speaker is the last thing to stand between you
and your degree, so I know m y duty well. At many commencements, speakers go
on and on with a result much like the winds of the desert that blow constantly
without doing any good. S o m e of m y graduations went like that, bringing to mind
the comment of a forlorn speaker who apparently went on too long too often as he
said "I don't mind people looking at their watches when I a m speaking, but I do take
strong exception when they start shaking them to make certain they are still
going." This is a great day for you the graduates, your friends, parents and loved
ones.
Some of you probably thought you would never make it here. You've worked hard
in class to earn your grades, and many have worked hard outside of class to earn a
living and support yourself. S o m e of you are supporting families as well, and
depending on your families for support. S o m e are the first in your family to go to
college.
I can see there are a lot of proud parents today. Some are looking up here with
mixed emotions: joy, relief, concern for the future.
I know how it is. One of the reasons I came to the University of Toledo was
because I was able to get a job here in Toledo, so I could pay for m y education.
And it was worth it.
It will be worth it for all of you. You've shown commitment and perseverance and
you've made it here. You've made it to your commencement. After all that, you've
made it to... the beginning.
It's a bit daunting, isn't it? All that work just to get to the beginning. And believe
me, this really is the beginning. You have so much ahead of you, and it doesn't get
any easier. But the good news is that it doesn't get harder either. Here's the
reason: the same values that got you to this commencement will get you anywhere
you want to go. Be sure to set your sights high.
V3^
I'm talking about hard work, perseverance, integrity, and commitment to your
goals. O n e of the great things about this country is that if you commit yourself to a
purpose, you can achieve it, no matter what your background. You've already
proven that. And all the education you have absorbed - it's not about showing a
degree on your resume, or your office wall - it's about learning how to solve
problems; learning how to learn. The learning never stops, for as long as you want
to move forward in life.
As an illustration of that, let me mention Alan Greenspan, the eminent chairman of
the Federal Reserve, a m a n noted for his deep erudition and mastery of financial
matters. In talking with Alan some years back, he told m e he had gone back to the
books, the mathematics books, and he would be working hard to master s o m e
elements of mathematical theory. H e explained that he felt compelled to do so
because of the development of the derivatives market, which had taken on far
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reaching significance in the financial world. Alan explained that derivatives were
becoming a bigger and bigger part of what the Federal Reserve System needed to
be concerned about. And derivative, which is really sophisticated hedging on risks,
is based on a system of underlying set of mathematical constructs. N o w think of
that, the Chairman of the Federal Reserve Board, w h o years ago got a P H D in
economics, and one of the leading financial figures in the world, going back to the
books. But that is the world w e are in, that is the world you are entering, so you
can never be satisfied with what you know, but rather must draw strength from what
you have learned about how to learn.
Let me put it this way: there's no roadmap for success. But you do have to know
how to drive. And it doesn't hurt to know how to change a flat tire once in a while.
You've earned your driver's license; you've gassed up the car. It's time to hit the
road.
Now, I know that road gets rough sometimes, so I want to talk to you about
commitment: commitment to your values, commitment to your family, and
commitment to your country.
All of you have shown a great capacity for commitment, graduating from college.
S o m e of you have completed advanced degrees as well. Think back on all the
work that went into that. Not only at Toledo, but also in the years before you started
here. H o w many times did you have to dust yourself off, overcome hardship, and
push ahead? Achievement requires commitment, and that starts with a
commitment to your values.
If you believe in yourself, you'll take intelligent risks. Success doesn't come from
avoiding failure; it comes from daring to succeed. Sometimes that means saying
"yes" when everyone else says "no." Take a chance, and confound the cynics.
Grab your opportunity. D o what you want to do, not just what you are supposed to
do.
Recently I had dinner with Donald Rumsfeld and his wife and we were talking about
this very subject. I asked Secretary Rumsfeld about his early interests and
inclinations, he said he had always tested well in math and science and w a s urged
on in those pursuits, but that his real interests were elsewhere in government,
politics and business. N o w there is a case of individuals following their interests
and talents to great advantage.
Other times it means saying "no" when everyone else says "yes." Stand up for what
you believe in, including yourself. Articulate your principles. You'll be surprised
how much people will respect you for it and what might happen as a result. I a m a
living example of that. After serving in the Ford Administration, I went to work for
the Chessie system railroad as their Washington Vice President. I w a s not really
inclined to go to Chessie, as m y career had been as a lawyer and m y first reaction
was to say "no" to the opportunity. The President of the company Hays Watkins
persisted and urged m e to join the company. I told him that I w a s close to joining a
major law firm and I could make Chessie m y first client. H e said no, you need to
work for the company to get the job done, and commented that if it doesn't work,
you can always go back to practice law. I took his counsel and joined the
company. Several years later, I w a s called to Cleveland, the headquarters of the
company, for a meeting of the senior management to review legislative proposals to
deregulate the railroad industry. Mr. Watkins asked m e to take the group through
the proposals outlining the various issues, which I did. At the end of m y
presentation and the discussion that ensued, he said to the group that it w a s time to
decide where w e wanted to go and he turned to m e first and said," John, should w e
support these deregulation proposals?" I said that it was important to modernize
the regulatory framework, I recognized there were risks, but thought they were
worth taking. H e went around the table, where I w a s the junior person. First, one
of the senior officers, and then another, voiced their criticism and voted no. Vote
after vote went no, until the vote w a s ten against one. I wondered if Mr. Watkins
remembered his commitment that I could leave and practice law if things didn't work
out. Mr. Watkins then said," I guess it's m y turn to vote, and I vote with John." S o
like Lincoln's cabinet, the vote carried two to ten. And about ten years later I
succeeded Mr. Watkins as C E O of the company.
Another level of commitment you can never forget is commitment to your family.
They got you here, and they'll support you the rest of the way. Make sure the
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people you love can depend on you the way you can depend on them. Another bit
of counsel I would give you is to cherish your friends and nurture those friendships.
W e all need people in our lives with w h o m w e can be genuine and truly sincere people with w h o m w e can think aloud and there m a y be no better definition of
friendship than that. And remember always Emerson's observation that the only
reward for virtue is virtue and the only way to have a friend is to be one.
Finally, make a commitment to your community. I grew up in Toledo, and I saw this
city go through s o m e hard times. The industries that built this city were hit hard and
w e lost a lot of jobs. But just like a person sometimes has to remake him or herself
through change and education, people remake their city, and this University has
been at the forefront of that revitalization in Toledo. University of Toledo programs
and Toledo graduates have m a d e a major contribution, and you are already a part
of that.
Remember that this city, or whatever community you choose to make your home in
the United States or even beyond our borders, is m a d e up of people like you.
Community dilemmas, national debates, even international conflicts are not about
other people. They are about you. S h o w s o m e interest and make a difference.
You don't have to be a politician to be a leader. Set an example of caring about
others, and others will follow your example.
As you do that, I would also suggest you remember those good souls who were
your professors here. If they were at all like m y professors, forty years ago, when I
attended the university, they were great people w h o gave their all, and cared about
their students deeply. Teaching is a noble calling. A teacher effects eternity and
no one can tell where their influence stops. It was through m y teachers here many
years ago, that I discovered a lifelong interest in economics, a field I have n o w
returned to after a long absence, holding a postion that would have been impossible
without them. I a m often asked what it is liked to be the treasury secretary, I a m
not sure I have a real good answer. The best 1 have been able to c o m e up with is
that it is like playing a violin, solo, in public, and learning the instrument as you go
along. I thank those university of Toledo professors from any years ago, w h o
helped put m e in the position many years ago to do that.
Now, before I let you go, I know you're hoping to hear about one more thing from
your Treasury Secretary: jobs. It's a tough market out there. We're working on it.
President Bush's team has been promoting a plan that w e think will create a lot of
new jobs in this country over the next few years, by giving businesses and
individuals greater incentives to invest. It's in Congress now, and we're hoping for
a successful resolution in the next few weeks.
But no matter what the government's policies, in America, you can always take
charge of your own future. I don't know anyone w h o hasn't faced rejection in his or
her life. It never goes according to plan. The biggest difference between the folks I
know w h o have succeeded and those w h o have not is that the successful ones
have stayed optimistic, stayed hopeful, and kept on driving.
In closing, I am reminded of the noble words of Alfred Lord Tennyson when he
talked about the human spirit, faced with challenged and adversity. W e are what
w e are, he said, m a d e weak by the struggles w e face, but remaining strong and
determined in the face of it all. S o that w e continue always "to strive, to seek, and
to find and not to yield" that is what you have done here at the University of Toledo
and I c o m m e n d you for your accomplishments and urge you on for the next set of
challenges and opportunities that lie ahead.
Again, congratulations to all of this year's University of Toledo
graduates, your families and your teachers. Y o u are ready for big
things. G o do them.
http ://www.treas. gov/press/releases/2003 5109473924249.htm
7/29/2003
2003-5-12-18-45-2-2515: Treasury Department N a m e s Becky Relic as Deputy Assistant... Page 1 ot 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 12,2003
2003-5-12-18-45-2-2515
Treasury Department Names Becky Relic as Deputy Assistant Secretary for
Public Liaison
The Treasury Department today announced that Becky Relic has been appointed
as Deputy Assistant Secretary for Public Liaison in the Office of Public Affairs.
In this position, Relic will direct Treasury Department outreach to the business,
advocacy and financial community - including Wall Street - advising Treasury
Secretary John Snow and the agency's leadership on issues and policies pertaining
to these key constituencies. She will elicit information, analysis, and opinions from
public and private organizations representing business and consumer interests, and
will communicate Treasury and the Bush administration views to these
organizations.
Relic has a wide range of federal public policy and liaison experience in
Washington, especially with regard to tax, labor and international policy issues.
Immediately prior to this appointment, Relic served as the Director of the
Washington, D C office of McDonald's Corporation, where she was responsible for
managing all federal political, legislative, and regulatory affairs for the company.
Previously, Relic managed federal relations for the National Association of
Wholesaler-Distributors, and before that the Society of American Florists. She has
also worked in the finance department of the National Republican Congressional
Committee, and for Congresswoman Nancy L. Johnson (R-CT).
Relic earned her degree in communications from DePauw University.
/ 5 3l>
http://wwwjreas.gov/Dress/releases/2003512184522515.htm
7/29/2003
2003-5-12-16-58-22-1021: Secretary Snow Statement Regarding Income Tax Convention... Page l
p*tr$$ ftooy
FROM THE OFFICE OF PUBLIC AFFAIRS
May 12, 2003
2003-5-12-16-58-22-1021
Treasury Secretary Snow Statement at the Ceremony for the Exchange of
Instruments of Ratification for the Protocol A m e n d i n g United States and
Australia Income Tax Convention
Today Treasury Secretary John Snow and Michael Thawley, Ambassador of
Australia, exchanged instruments of ratification for the Protocol amending the
United States - Australia Income Tax Convention. This exchange of instruments
will bring the Protocol into force today. The Protocol, which w a s signed in Canberra
in September 2001, amends the existing tax treaty between the United States and
Australia concluded in 1982.
At the ceremony, Treasury Secretary John Snow delivered the following remarks:
I would like to thank you all for being here today and to welcome our friends from
the Australia, especially Michael Thawley, Australia's Ambassador to the United
States.
Ambassador Thawley and I have the privilege today of exchanging the instruments
of ratification to bring into force a Protocol that amends the income tax treaty
between the United States and Australia. The U.S.-Australia tax treaty relationship
has served the intended purpose of eliminating tax barriers to cross-border trade
and investment. But w e can always m a k e improvements and this Protocol will
m a k e our treaty relationship even better. The provisions of this Protocol represent
significant advances that will further eliminate tax barriers and thus facilitate trade
and investment between our countries.
The Protocol that will enter into force today brings the existing treaty into greater
conformity with U.S. tax treaty policy, while also reflecting s o m e provisions found in
the Australian model tax treaty. The Protocol reflects the ever increasing
importance of international activity to both our economies.
This Protocol is only the second tax agreement of the United States that completely
eliminates cross-border withholding taxes on certain dividends paid by subsidiaries
to their parents. The Protocol also is notable for the substantial reductions in
source-country withholding tax it provides for royalties and for certain interest
payments. This broad reduction in the full range of withholding taxes will help
remove one of the remaining tax barriers to investment between the United States
and Australia.
Today's exchange of instruments of ratification marks the entry into force of the
Protocol amending the tax treaty between the United States and Australia. Thank
you, Ambassador Thawley, for your participation in this important event.
JS 3 ^
httpi/A1™"™*™gg ^v/nress/releases/20035121658221021 .htm
7/29/2003
2003-5-12-14-15-26-29074: Draft Legislation Submitted on Deposit Insurance Reform
Page 1 ot 1
IS ROOM
FROM THE OFFICE OF PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 12, 2003
2003-5-12-14-15-26-29074
Treasury and Banking Regulatory Agencies Submit Draft Legislative
Language on Deposit Insurance Reform to Senate Banking Committee
The Treasury Department, the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the Office of the Comptroller of the Currency and the Office
of Thrift Supervision today submitted draft legislative language on deposit insurance
reform to the U.S. Senate Banking Committee.
The five agencies drafted the legislative language in response to a request from
Senate Banking Committee Chairman Richard Shelby at a February 26, 2003
Committee hearing on deposit insurance reform. Chairman Shelby requested that
the five agencies work in cooperation to develop language that would best reflect
the consensus presented in the agencies' testimony.
Attached are the draft legislative language, a cover letter to Chairman Shelby, and
a summary of the draft proposal.
Related Documents:
• Legislative Proposal
• Cover Letter
• Summary of Proposal
JS 3 ^
http://www.treas.gov/Dress/releases/200351214152629074.htm
7/99/9 n m
RESPONSE TO REQUEST FROM CHAIRMAN SHELBY
APRIL 30,2003
A BILL
To reform the federal deposit insurance system and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled,
SECTION 1. SHORT TITLE
This Act may be cited as "The Federal Deposit Insurance Reform Act of 2003".
SEC. 2 MERGER OF DEPOSIT INSURANCE FUNDS
(a) IN GENERAL(1) E S T A B L I S H M E N T O F D E P O S I T I N S U R A N C E F U N D - Pursuant to
Section 11(a)(4)(A) of the Federal Deposit Insurance Act, as amended
by this Act, there is established a fund to be known as the Deposit
Insurance Fund.
(2) M E R G E R - The Federal Deposit Insurance Corporation shall merge the
Bank Insurance Fund and the Savings Association Insurance Fund into
the Deposit Insurance Fund.
(3) DISPOSITION O F A S S E T S A N D LIABILITIES - The Federal Deposit
Insurance Corporation shall transfer all assets and liabilities of the Bank
Insurance Fund and the Savings Association Insurance Fund to the
Deposit Insurance Fund.
(4) N O S E P A R A T E E X I S T E N C E - The separate existence of the Bank
Insurance Fund and the Savings Association Insurance Fund shall cease
upon establishment of the Deposit Insurance Fund.
(b) R E P E A L O F O U T D A T E D M E R G E R P R O V I S I O N - Section 2704 of P.L. 104-208 (the
Deposit Insurance Funds Act of 1996) (12 U.S.C. 1821 note) is repealed.
(c) E F F E C T I V E D A T E - This section shall be effective on the first day of the first calendar
quarter that begins after the end of the 90-day period beginning on the date of enactment
of this Act.
SEC. 3 ASSESSMENTS; DESIGNATED RESERVE RATIO
(a) Section 7(b)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)) is
amended as follows:
(1) By striking clause (i) and inserting the following:
(i) IN GENERAL.
(I)
S E N S E O F C O N G R E S S - It is the sense of the
Congress that the Corporation should assess each
RESPONSE TO REQUEST FROM CHAIRMAN SHELBY
APRIL 30,2003
insured depository institution for the benefits of
federal deposit insurance;
(II) ASSESSMENTS - After considering the factors in
clause (ii), the Board of Directors shall set assessments
for insured depository institutions in accordance with
this section "
(2) By striking clause (iii) "LIMITATION ON ASSESSMENT".
(3) By redesignating existing clause (iv) as clause (iii) and amending it as follows:
"(iii) DESIGNATED RESERVE RATIO DEFINED- (I) IN GENERAL-The designated reserve ratio of the Deposit Insurance Fund for each year
shall be(aa) 1.25 percent of estimated insured deposits; or
(bb) a percentage between 1.15 percent and 1.50 percent of
estimated insured deposits, as the Board of Directors
determines is justified for that year, taking into account the
factors in subclause (II).
(II) F A C T O R S - In establishing the designated reserve ratio
under subclause (I), the Board of Directors shall take into
account (aa) the risk of losses to the Deposit Insurance Fund
during that year and future years;
(bb)economic conditions generally affecting or
likely to affect insured depository institutions with
the goal of allowing the designated reserve ratio to
increase under more favorable economic conditions
and to decrease under less favorable economic
conditions;
(cc) the desirability of avoiding sharp swings in the
assessment rates of insured depository institutions;
and
(dd) other factors that the Board of Directors deems
appropriate."
(4) By adding the following new clause (iv) and striking existing clause (v):
"(iv) NOTICE AND COMMENT- The Board may determine the
designated reserve ratio pursuant to clause (iii) (I)(bb) of this subparagraph
only by regulation after notice and public comment and no more than once
annually."
(c) EFFECTIVE DATE - The amendments made by this section shall take effect on the date that
the final regulations required under section 6 of this Act become effective.
2
RESPONSE TO REQUEST FROM CHAIRMAN SHELBY
APRIL 30,2003
SEC. 4 RAISING THE RESERVE RATIO TO THE DESIGNATED RESERVE RATIO
(a) Section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended as
follows:
(1) By striking existing subparagraph (B) and redesignating existing subparagraph (C) as
subparagraph (B).
(2) By redesignating subparagraph (E) as subparagraph (C) and amending it as follows:
" (C) MINIMUM ASSESSMENTS - The Corporation shall design the risk-based
assessment system for the Deposit Insurance Fund so that, if the Corporation has borrowings
outstanding on behalf of the Fund under section 14(a) or (b) of the Federal Deposit Insurance Act
(12 U.S.C. § 1824(a) and (b)), or if the Board of Directors is required to set assessment rates
pursuant to paragraph (3)(A)(ii) of this subsection, the m i n i m u m assessment rate in the riskbased assessment system, after application of any assessment credits provided under section
7(e)(2), shall be no less than 5 basis points for each insured depository institution"
(3) By striking subparagraphs (F) and (G) and redesignating existing subparagraph (H) as
subparagraph (E).
(b) Section 7(b)(3)(A)-(C) of the Federal Deposit Insurance Act (12 U.S.C. § 1817(b)(3)(A)(C)) is amended to read as follows:
"(3) SPECIAL RULE FOR RECAPITALIZING UNDERCAPITALIZED FUND
(A) I N G E N E R A L - If the reserve ratio of the deposit insurance fund is less than
the lower bound of the range for the designated reserve ratio under paragraph
(2)(A)(iii)(I)(bb), the Board of Directors shall set assessment rates (i) that are sufficient to increase the reserve ratio for the Fund to
the lower bound of the range for the designated reserve ratio not
later than 1 year after such rates are set; or
(ii) in accordance with a recapitalization schedule promulgated by
the Corporation under subparagraph (B).
(B) RECAPITALIZATION SCHEDULES. For purposes of subparagraph (A)(ii),
the Corporation shall, by regulation, promulgate and implement a schedule that
specifies, at semiannual intervals, target reserve ratios for the Fund, culminating
in a reserve ratio equal to the lower bound of the range for the designated reserve
ratio not later than 6 years after the date on which the recapitalization schedule is
implemented."
(c) EFFECTIVE DATE - The amendments made by this section shall take effect on the date
that the final regulations required under section 6 of this Act become effective.
3
gs OF
April 30, 2003
The Honorable Richard C. Shelby
Chairman
Committee on Banking, Housing, and Urban Affairs
United States Senate
Washington, D.C. 20510
Dear Chairman Shelby:
During the recent hearing before your committee, you asked us to work in cooperation to develop
legislative language on deposit insurance reform that would best reflect the consensus presented in our
testimonies. The enclosed draft bill is the successful result of those efforts.
As you noted at the hearing, we began with a great deal of agreement on the important elements
of reform and also some less important differences. But in a strong cooperative spirit, each of us went to
some lengths to understand and accommodate each other's views.
The draft legislative language that we are submitting to you represents a consensus of the
interests and concerns expressed by the five agencies. A n d while w e each have our preferences as w e
presented in our testimony, each of us would be pleased to see the bill w e submit to you today enacted
into law.
Thank you for giving us the opportunity to advance the cause of real deposit insurance reform.
W e look forward to working with you and the Congress on this important matter in the days ahead.
Sincerely,
Alan Greenspan4
Chairman
Board of Governors of the
Federal Reserve System
Donald E. Powell
Chairman
Federal Deposit Insurance Corporation
ihn D. Hawke, Jr.
Comptroller
Office of the Comptroller of the
ames E. Gilleran
Director
Office of Thrift Supervision
^Ol*>&
£y
'4/L e.
v.
Peter R. Fisher
Under Secretary for Domestic Finance
Department of the Treasury
Enclosure
Section by Section S u m m a r y of the Consensus Proposal on
Deposit Insurance R e f o r m
Section 1. Short Title. "The Federal Deposit Insurance Reform Act of 2003."
Section 2. Merger of Deposit Insurance Funds.
Currently, the FDIC separately administers the Bank Insurance Fund (BIF) and the Savings
Association Insurance Fund (SAIF). Pursuant to this bill, the F D I C would merge BIF and SAIF
effective on the first day of the first calendar quarter that begins 90 days after enactment and
simultaneously establish a n e w federal deposit insurance fund. The n e w insurance fund formed from the
merger of BIF and SAIF would be k n o w n as the Deposit Insurance Fund (DIF).
Section 3. Assessments; Designated Reserve Ratio.
The bill retains the current statutory authority for the FDIC to establish a risk-based assessment
system and the current factors that F D I C must consider in setting assessments (operating expenses, case
resolution expenses and income, the effect of assessments on institution earnings and capital, and other
factors as F D I C deems appropriate).
Current law directs the FDIC to set assessments "when necessary, and only to the extent
necessary" to maintain, or restore the reserve ratio to, the designated reserve ratio ( D R R ) . hi general,
current law prohibits the F D I C from assessing institutions more than the amount needed to maintain the
reserve ratio at the current D R R or increase it in the event it falls below the D R R . There are exceptions
to this prohibition for institutions that exhibit financial, operational, or compliance weaknesses, or that are
not well capitalized. The bill would eliminate these limitations and prohibitions on F D I C assessment
authority, and would add a Sense of the Congress that the F D I C should assess each insured depository
institution a premium for the benefits of federal deposit insurance.
Current law defines the DRR as 1.25 percent of estimated insured deposits, or such higher
percentage as set by the F D I C by regulation, after notice and comment, for a particular year if the F D I C
finds a "significant risk of substantial future losses to the fund." The bill would define the D R R as 1.25
percent, or as another percentage between 1.15 percent and 1.50 percent that the F D I C determines is
justified after taking into account: (1) the risk of loss to the insurance fund, (2) economic conditions (with
the goal of allowing the D R R to rise under more favorable economic conditions and fall under less
favorable conditions), (3) the desirability of avoiding sharp swings in assessment rates, and (4) other
factors that the F D I C deems appropriate. The F D I C would have to act by regulation to adjust the D R R ,
after providing notice and seeking public comment, and could not adjust the D R R more than once per
year.
Section 4. Raising the Reserve Ratio to the Designated Reserve Ratio.
2
W h e n the reserve ratio is less than the D R R , current law requires the F D I C to set assessments as
necessary to increase the reserve ratio to the D R R within one year after such rates are set, or in
accordance with a recapitalization schedule established by F D I C regulation. Under a recapitalization
schedule established under current law, the F D I C would promulgate target reserve ratios at semiannual
intervals and must ultimately reach the D R R no later than 15 years after the schedule is implemented. If
an insurance fund's reserve ratio remains below the D R R for more than one year, or if an insurance fund
has borrowings outstanding (including Treasury and Federal Financing B a n k borrowings), current law
requires that F D I C charge an assessment rate of at least 23 basis points.
In place of these provisions in current law, the bill would give the FDIC broad discretion to
manage reserves within the range for the D R R established under Section 3. The bill would provide that if
the reserve ratio is below the lower bound of the range for the D R R , the F D I C shall set assessments that
are sufficient to increase the fund to the lower bound of the D R R range not later than: (1) one year after
such rates are set, or (2) in accordance with a recapitalization schedule established by regulation that
culminates in the fund reaching the lower bound of the D R R range within 6 years. If the F D I C has
borrowings outstanding from its lines of credit with the Treasury or Federal Financing Bank, or if a
recapitalization schedule is in effect, the m i n i m u m premium rate in the risk-based assessment system
would have to be no less than 5 basis points, after application of any assessment credits (as provided
under Section 5), for each insured depository institution
Section 5. Assessment Credits and Cash Rebates.
The bill would require that FDIC establish, by regulation, criteria and procedures for awarding
credits to offset an insured institution's prospective deposit insurance assessments.
The bill would authorize the FDIC to award transition assessment credits in an aggregate amount
equal to 9 basis points of the combined BIF and S A I F assessment base on December 31,2002, an
amount equal to approximately $4.4 billion. Institutions eligible for these transition credits are those
insured depository institutions that were in existence on December 31,1996, and that paid a deposit
insurance assessment prior to that date, as well as their successor institutions. The amount of credit to be
awarded to each eligible institution would be based on the assessment base of the institution on
December 31,1996 compared to the aggregate assessment base for all such institutions on that date,
and such other factors as the F D I C m a y determine to be appropriate.
Under the bill, the F D I C could also award additional assessment credits if the reserve ratio
exceeds the greater of the D R R or 1.25 percent. In estabhshing the amount of additional credits for
each individual institution and in the aggregate, the F D I C would have to take into account: (1) the factors
for setting assessments and the D R R , (2) the ratio of each institution's (including any predecessor's)
assessment base as of December 31,1996 compared to the aggregate assessment for all such institutions
on that date, (3) previous deposit insurance assessments levied with respect to the insured depository
institution (including any predecessor) on or after January 1,1997, (4) that portion of assessments levied
3
that reflects higher levels of risk assumed by such institution, and (5) other factors as the F D I C deems
appropriate.
In addition, the FDIC could, in its sole discretion, choose to provide cash rebates in lieu of all or
part of any additional assessment credits that would otherwise have been provided, but only if (1) the
reserve ratio exceeds the upper bound of the range for the D R R and (2) the reserve ratio would remain
above the upper bound after any such cash rebate.
Although transition or additional assessment credits awarded to an eligible insured institution
would remain available until exhausted, the F D I C could suspend or limit the use of such credits if the
reserve ratio is below the lower bound of the range for the D R R . Furthermore, under the bill, the amount
of any credit that the F D I C applied in an assessment period against the assessment on an insured
depository institution that exhibits financial, operational, or compliance weaknesses ranging from
moderately severe to unsatisfactory, or is not adequately capitalized, could not exceed the amount
calculated by applying to that depository institution the average assessment rate on all insured depository
institutions for such assessment period.
The bill requires FDIC regulations implementing assessment credits to include procedures
allowing an insured depository institution a reasonable opportunity to challenge administratively the
amount of its credit or cash rebate. The FDIC's determination of the amount of any credit or cash rebate
following any such challenge would be final and not subject to judicial review.
Section 6. Regulations Required
Under the bill, the FDIC is required to promulgate, after notice and comment, final regulations to
implement Sections 3,4 and 5 not later than 270 days after the date of enactment. Sections 3,4 and 5
would become effective w h e n the final regulations are effective.
Section 7. Assessment Base Study.
The bill would require the FDIC to study and report to Congress on the insurance fund
assessment base within one year of the date of enactment, hi conducting the study, the F D I C must
consult with the Treasury and Federal Reserve and take into account, a m o n g other factors, the risks
posed to the deposit insurance fund by the composition of insured depository institution habilities.
Section 8. Assessments-Related Record Retention and Statute of Limitations.
The bill would reduce the length of time that insured depository institutions must maintain all
records that the F D I C m a y require for verifying the accuracy of any assessment from 5 years to 3 years,
except in the case of disputed assessments w h e n records would have to be maintained until the dispute
4
has been resolved. Similarly, the statute of limitations on assessment disputes would be reduced from 5
years to 3 years.
Section 9. Late Payment Fees for Failure to Pay Assessments.
The bill would increase fees for late assessment payments from $100 per day under current law
to 1 percent of the required assessment for each day that the assessment continues to be late.
Section 10. Employee Benefit Plans.
The bill would provide that employee benefit plan deposits always receive pass-through
coverage from the FDIC. However, an insured institution could accept employee benefit plan deposits
only if the institution is well capitalized, or is adequately capitalized and has received a brokered-deposit
waiver from the FDIC.
Section 11. Technical and Conforming Amendments to the Federal Deposit Insurance Act
Relating to the Merger of the Deposit Insurance Funds.
The bill would make various technical amendments to the Federal Deposit Insurance Act to
ensure conformity with the provision of the bill merging BIF and SAIF.
Section 12. Additional Technical Amendments to the Federal Deposit Insurance Act to
Eliminate Requirement of Semiannual Assessments.
The bill would make technical amendments to the Federal Deposit Insurance Act to repeal the
requirement that the F D I C set premiums on a semi-annual basis.
Section 13. Other Technical and Conforming Amendments Relating to the Merger of the
Deposit Insurance Funds.
The bill would make various technical amendments to banking laws other than the Federal
Deposit Insurance Act, and to other laws, to ensure conformity with the provision of the bill merging BIF
and SAIF.
JS-369: Secretary S n o w Remarks U p o n Unveiling of N e w Twenty Dollar Bill Bureau ot... r*age i 01
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 13, 2003
JS-369
Secretary John W. Snow Remarks Upon Unveiling
of N e w Twenty Dollar Bill
Bureau of Engraving and Printing,
Washington, D C
A few months ago, I gave my signature to the Bureau engravers, so they could put
it on the plates used to print our currency. One of the highest honors bestowed on
the Treasury Secretary is the Secretary's signature on the currency. Our currency
is one of the most powerful symbols of our republic.
U.S. currency represents security and integrity around the world. The design we
are introducing today will help us keep it that way by protecting against
counterfeiting and making it easier for people to confirm the authenticity of their
hard-earned money.
The purpose of the new design is to stay ahead of anyone who would compromise
the security and integrity of the dollar through counterfeiting. Thanks to the
changes w e made to our currency in the late 1990s, aggressive law enforcement
efforts led by the Secret Service, and the help of an informed public, we've been
able to do just that.
Nonetheless, technology changes quickly and counterfeiters develop new tools, so
w e plan to introduce new designs for our currency every 7 to 10 years. In fact, as
soon as the current $20 note was introduced in 1998, work began on the new
design you're about to see.
This new $20 note will go into circulation later this year. New designs for the $50
and $100 notes will follow in 2004 and 2005.
The most distinctive change in the new currency design is the color. Different
colors for different denominations will make it easier to tell one note from another,
especially for those with visual impairments. Color also makes the currency more
difficult to counterfeit.
Even with the new colors and other features, the world will recognize the new notes
as distinctly American. Everyone who sees the note will know instantly what it is
and what it stands for.
I'm looking forward to the unveiling of the new currency design. I'm also looking
forward to the passage of President Bush's Jobs and Growth Plan, which will
enable Americans to keep more of these new bills in their own pockets. The plan
will stimulate the economy and create new jobs -- benefiting American businesses
and investors, workers and retirees. I urge Congress to act swiftly to enact the
plan, to keep economic recovery on track and ensure that families enjoy a lasting
prosperity.
Thank you very much.
httn ://www.treas. gov/press/releases/i s3 69 .htm
7/?Q/?nm
JS-369: Secretary S n o w Remarks U p o n Unveiling of N e w Twenty Dollar BUI Bureau 01... rage * ^
http://www.monevfactory.com/newmoney/
http -.//www.treas. gov/press/releases/j s3 69 .htm
7/29/2003
r*age i 01 i
U.S. Bureau of Engraving and Printing | N e w Money | Welcome
Choose a Language
it
Coming soon:
The M e w Cyrsrency
The New Color of Money
Safer, Smarter, More Secure
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Welcome to The New Color of Money
W e b site - your source for information about
the U.S. government's latest redesigns io
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Read the press release and review the
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Resources
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W e think you'll enjoy what
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S u b s c r i b e for E-mail U p d a t e s
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7/29/2003
JS-370: M E D I A A D V I S O R Y John Taylor, Under Secretary for International Affairs
Page 1 ot
F R O M THE OFFICE OF PUBLIC AFFAIRS
May 13, 2003
JS-370
MEDIA ADVISORY
John Taylor, Under Secretary for International Affairs
John Taylor, Under Secretary for International Affairs, will brief
for reporters in advance of Treasury Secretary John Snow's
participation in the G 8 Pre-Summit Finance Ministers meeting
to be held in Deauville, France this weekend. The briefing will
be held at 10:30 A M on Thursday, M a y 15, 2003 in the
Treasury Department Media Room. Under Secretary Taylor
will discuss Secretary Snow's agenda for the meetings and will
be available to answer questions.
Note that the Treasury Building is a secure facility. Members
of the media w h o do not posess Treasury or White House
press credentials should contact Frances Anderson at 202622-2960 or via email at Frances.Anderson@do.treas.gov for
clearance into the building no later than 4:00 P M on
Wednesday, M a y 14. Please provide full name, organization,
date of birth, social security number, and contact information.
http ://www.treas. eov/oress/releases/j s3 70.htm
7/29/2003
JS-371: Testimony of Secretary John W . Snow before the Committee on Financial Services Page 1 of 7
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 13, 2003
JS-371
Testimony of Treasury Secretary John W. Snow
before the Committee on Financial Services
U.S. House of Representatives
Chairman Oxley, Representative Frank and Members of the Committee, thank you
for inviting m e here today to discuss the Administration's international economic
agenda. I welcome the opportunity to describe where w e are today on advancing
that agenda and our priorities for the future.
These are challenging times for our country and for the world. Yet we must remain
focused on fundamental tasks. The Administration is working to strengthen our
economic recovery, expand growth, create jobs, and raise living standards for
Americans. So too are w e dedicated to promoting stronger global growth and
improving the lives of people throughout the world. There are no easy answers to
the dilemmas posed by the poverty and financial instability that persist around the
globe. Nonetheless, the Administration is determined to persevere and to work with
the international community to accomplish our shared goals.
Rebuilding Iraq and Afghanistan is clearly a key priority for the United States and
the international community, and I want to bring you up to date on Treasury's role in
the Administration's efforts in this area. I also want to focus today on vital longstanding policy objectives - promoting global growth, fostering growth and stability
in emerging markets and increasing growth in developing countries. And I want to
underscore the importance that the Administration attaches to the authorization
requests related to the Multilateral Development Banks (MDBs) that are pending
with this Committee.
Promoting Global Growth
Our first international economic priority should be getting economic policies right at
home. By strengthening economic growth in the United States, w e provide a
natural impetus for global growth. As the world's largest economy, when w e grow
faster w e provide a boost to the world as a whole. That is why President Bush's
jobs and growth package is so critical, not just for the U.S. economy, but for the
global economy as well.
I have emphasized in meetings with my colleagues from the Group of Seven (G-7)
countries how President Bush's economic growth proposals will build on the proven
strengths of the U.S. economy - generating jobs, encouraging savings and
investment, and promoting entrepreneurship.
The United States is doing its part in contributing to a healthy global economy. But
a healthy global economy needs multiple engines of growth. I have underscored
that our G-7 partners must immediately take their own steps, appropriate to their
own circumstances, to spur growth and contribute to global prosperity. W h e n
Finance Ministers convene this weekend in advance of the G-8 Summit, I will
continue to emphasize this point.
Trade liberalization is one of the most fundamental steps that countries around the
world can take together to achieve growth and reduce poverty. Spreading the
benefits of free trade is a key priority for the Administration. W e are pursuing this
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objective at a global level in the World Trade Organization, regionally through the
Free Trade Area of the Americas that is being negotiated, and bilaterally through
the recently signed agreement with Singapore, the recently concluded agreement
with Chile, and negotiations with the Southern Africa Customs Union, Morocco,
Australia and several Central American nations. Treasury is working as a key
m e m b e r of the inter-agency team to advance this agenda, focusing on financial
sector liberalization, investment, customs issues, trade-related capacity building,
and the revenue implications of tariff reduction.
Rebuilding Iraq and Afghanistan
The urgent reconstruction efforts in Iraq and Afghanistan are a primary focus of the
Administration's international economic policy. T o provide intensive attention to this
priority, the Treasury Department has formed a task force to help address key
financial and economic aspects of Iraq's reconstruction. This task force includes
broad representation from U S Government Agencies, including representatives of
the Federal Reserve, O C C , USAID, and the State Department. In conjunction with
State, the Department of Defense, and others, Treasury will be working closely with
Peter McPherson, w h o will be the lead advisor on financial matters on the ground in
Iraq. Treasury's Office of Technical Assistance already has deployed 14 advisors
to the Office of Reconstruction and Humanitarian Assistance (ORHA), and
additional personnel m a y be deployed as necessary to help staff O R H A , which is
expanding in conjunction with its m o v e to Baghdad.
Working in concert with USAID, State, and the emerging leadership of a free Iraq,
Treasury will assist in the formulation and execution of financial and economic
policies in post-war Iraq. W e start from the premise that our role is to help the Iraqi
people rather than to impose changes upon them. It will be a priority to restore
essential operations of the Finance Ministry, the Central Bank, commercial banks
and the stock market. Where elements of the existing system are corrupt,
ineffective, or inconsistent with a market-oriented economy, Treasury will work with
the Iraqi people to begin essential reform and restructuring efforts.
A crucial near-term challenge will be paying civil servants, teachers, and pensioners
in a fair, orderly and prompt manner - and transitioning to a wage/pension payment
process under Interim Iraqi Authority control. Near-term goals include assisting the
Iraqi people in the development of a fair and transparent federal budget, creation of
a responsible system of regulation and supervision for financial institutions, reform
of the tax and customs regimes, design of a strategy for the management of
domestic and external debt, and implementation of financial fraud, anti-money
laundering and anti-terrorist financing measures.
Development of a system of commercial law, founded on a base of private property
rights, is an essential element of developing a market-based economy in Iraq. For
this reason, w e believe there are several areas in which the Iraqi people will need to
focus, ranging from dealing with real estate and personal property to intellectual
property rights. These will also include establishing the legal framework for
corporations, the banking system, and capital markets. Given the reach of
commercial law, more than just Treasury will be involved in assisting this effort; it
will also include the Departments of State, Justice, Commerce, and USAID.
However, each of us recognizes the importance of creating a free market economy
in the country, and development of a sound framework of commercial law is key to
this goal.
We also expect the international financial institutions to play an important role in
supporting Iraq's reconstruction. The World Bank is already forming a team of
experts to conduct a needs assessment in Iraq, which will help focus attention on
assistance priorities and lay the groundwork for economic recovery and growth.
The World Bank has the authority to determine when the time is appropriate to send
a mission to Iraq for a field-based needs assessment. The IMF has provided
general advice on the currency and monetary policy, and has also signaled that it is
prepared to undertake a needs assessment at the appropriate time.
Shortly after the creation of the Interim Authority in Afghanistan in December 2001,
Treasury's Office of Technical Assistance (OTA) sent an advisor to Kabul to
conduct early assessments of budgetary, financial and economic conditions. O T A
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Budget Advisor Larry Seale has since been in Kabul for over a year working closely
with Finance Minister Ashraf Ghani in establishing modern budget mechanisms in
the country. Treasury consulted with the World Bank, the Asian Development Bank
and the U N Development Program during their development of the Needs
Assessment for Afghanistan, which w a s presented at the Tokyo donors' conference
in January 2002. Treasury provided advice and assistance on the creation of a
new, unified currency, which completely replaced the old afghani in January of this
year. Under Secretary Taylor has also played a key role in marshaling international
financial support for the Afghan government's day to day expenses through the
World Bank-administered Afghanistan Reconstruction Trust Fund
The MDBs are providing critical support for economic reform in Afghanistan. The
World Bank and the Asian Development Bank (AsDB), together with U N agencies
and international donors, are working closely with the Afghan government to
respond to the country's urgent reconstruction needs.
Last year, the World Bank extended grants totaling $100 million to support public
administration, infrastructure, education, and public works and provided a $108
million concessional loan in March this year to rebuild Kabul airport and a section of
the "ring" road. Last year, the A s D B moved quickly to offer grants assistance on
roads, energy, and capacity building and to date has provided about $40 million in
grant assistance. Additionally, Afghanistan has received an Asian Development
Fund post-conflict concessional loan of $150 million that is supporting urgent road
building and another $150 million in concessional resources are expected to be
approved for post-conflict reconstruction next month.
Fostering Growth and Stability in Emerging Markets
Financial crises in recent years have threatened the progress made by many
emerging markets in improving living standards for their people. Successive crises
have constrained global capital flows and helped leave growth well beiow its
potential, hurting both emerging markets and the global economy.
The Administration's fundamental goal is to increase economic growth and stability
in emerging market economies. Above all, this means providing strong support for
policy reforms. The choice to reform must be m a d e by countries themselves;
ownership is vital to successful implementation.
It also means reducing the frequency of crises and improving the access of
emerging market economies to private capital flows. To achieve these goals, the
Administration is pursuing several key steps. First, w e aim to prevent crises before
they erupt - by better understanding potential vulnerabilities and taking early action
to encourage countries to correct policies. Second, w e aim to reduce the spread of
crises from one country to others. Third, w e are working to m a k e clear that official
sector finance is limited - and not available in large s u m s to encourage excessive
risk taking by investors or to provide an escape for policy-makers from making
difficult choices. And finally, w e are seeking to create a more orderly and
predictable process for debt restructuring through introduction of collective action
clauses in sovereign bonds.
The International Monetary Fund (IMF) plays a central role in these areas, and over
the last year, w e have sought to ensure that the IMF is improving its focus on each
of the four objectives that I laid out above. In sum, the IMF is more transparent,
more focused on its core macroeconomic mission, and more intent on anticipating
events that could lead to crisis. (Greater detail on reforms is provided in Treasury's
Report to Congress on Implementation of Legislative Provisions Relating to the
IMF, October 2002.)
To enhance crisis prevention and limit contagion, we have worked with the IMF to
continue to strengthen its surveillance of economic conditions and performance in
m e m b e r economies. In this context it is gratifying to see private markets
increasingly discriminating on the basis of the credit quality of individual emerging
markets.
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W e strongly support ongoing work at the IMF to enhance its analyses of m e m b e r
economies, by focusing on core issues that are vital to macroeconomic
performance and by ensuring that its analysis and advice are of high quality,
objective and useful. This includes: paying closer attention to key areas of
potential vulnerability; more effectively assessing debt sustainability; and zeroing in
on potential weaknesses in regulatory frameworks and steps needed to strengthen
national financial systems and financial sector performance.
Providing better information to the public is key to crisis prevention. The IMF
cannot contribute in this respect if the results of its analyses are not widely
available. IMF analyses are already much more widely available to the public,
helping countries differentiate themselves to the community of investors and thus
helping protect against unwarranted contagion. The Administration continues to
press for more routine publication of IMF analyses, and w e strongly support
ongoing IMF work with countries to improve compliance with standards and codes
and publish the results, which will enhance the information available to foreign and
domestic investors.
To further strengthen incentives for strong policies and prudent risk-taking, the
United States has sought to m a k e clear the limits on official finance, both through
our actions in tackling recent crises and through introduction of n e w constraints on
the financial support that can be provided in future cases. The Administration has
emphasized and will continue to insist that the IMF must be the key source of
emergency support in the face of financial crises. Where exceptional, large scale
financing is needed from the IMF, it should be provided on shorter terms and at
higher interest rates than normal IMF lending. Within the IMF, w e have worked to
strengthen the requirements for access to exceptional amounts of financing, so that
IMF support in all but the most extreme cases falls below specific, pre-set levels.
The Administration gained the support of other members for this approach in
February, w h e n the IMF approved procedural changes that, a m o n g other things,
will require the IMF to prepare a separate report with detailed justification for any
exceptional access request.
Creating a more orderly and predictable process for debt restructuring has been a
particular priority in recent months. More broadly, there has been a wide ranging
debate in the international community about the potential for a centralized
sovereign debt restructuring mechanism analogous to a bankruptcy court. Given
the reactions of markets and emerging market countries, however, it is the United
States' strong view that collective action clauses offer a more practical vehicle.
There can at times be "collective action" problems that prevent a prompt, orderly
resolution of a sovereign debt crisis. The source of these problems lies in the
relationships and agreements of debtors and their creditors. It is these parties, not
an international organization, w h o must assume responsibility for the solution.
The United States continues to work in the IMF to strengthen the crisis resolution
framework through broad voluntary approaches. W e have seen excellent progress
m a d e in developing and incorporating collective action clauses in external
sovereign bond contracts. Mexico has shown strong leadership in issuing several
bonds that include such clauses and committing to include such clauses in all n e w
external bond issues. Brazil and South Africa have also had success with a global
bond issue including such clauses. W e urge other market borrowers to follow this
example.
W e have been working with the IMF on h o w best to promote more widespread
inclusion of collective action clauses and enhanced transparency and disclosure.
Emerging markets countries that regularly access international financial markets
need to assume rightful ownership of these issues and help assure a more stable
and orderly international financial system.
Increasing Growth in Developing Countries
The persistence of poverty is one of the most difficult challenges the world faces.
Yet w e are committed to tackling it. The Administration's strategy in developing
countries centers on increasing productivity growth, thereby raising living standards
and reducing poverty. Creating economic opportunities is vital not only to the daily
lives of individuals and the economic development of their countries but also to
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stability for all of the world's citizens.
The President's commitment to tackling poverty is exemplified by his proposed
Millennium Challenge Account (MCA), which represents a tremendous innovation in
the delivery of development assistance. The M C A brings together the lessons w e
have learned about development over the past 50 years: 1) Aid is more likely to
result in successful sustainable economic development in countries that are
pursuing sound political, economic and social policies. 2) Development plans
formulated by a broad range of stakeholders engender country ownership and are
more likely to succeed. 3) Integrating monitoring and evaluation into the design of
activities ensures that aid is going where it's most effective.
President Bush's vision of the MCA recognizes the importance of each of these
lessons. First, it rewards pro-growth policies. President Bush categorizes these
policies as ruling justly, investing in people and encouraging economic freedom.
These policies benefit developing countries by increasing growth, creating an
environment conducive to foreign and domestic investment, and making
development assistance more effective. The M C A provides a strong incentive for
countries to adopt these good policies. Second, the M C A establishes a true
partnership in which the developing country, with full participation of its citizens,
proposes its o w n priorities and plans. Finally, the M C A will place a clear focus on
results. Funds will only go to well designed programs that have clear objectives,
measure baseline data, and set benchmarks for both intermediate outputs and final
outcome goals.
The MCA's targeted mission reaffirms our development objectives and contributes
to an integrated strategy for achieving them. The M C A will focus on spurring
growth in the subset of developing countries that have policies in place to use such
assistance most effectively to achieve lasting results. USAID, State, and other
agencies will continue to deliver humanitarian and regional assistance, to address
complex emergencies, and to work with failed and failing states, all issues critical to
U.S. national interests. USAID will also work with countries that are M C A "near
misses" to encourage them to achieve the development-readiness essential for
receiving assistance under the M C A .
Over the past few years, the international community has worked at creating a set
of development goals. These goals include such ambitious targets as halving by
the year 2015 the proportion of people whose income is less than one dollar a day.
Last year, President Bush added another ambitious goal - "we ought to double the
size of the world's poorest economies within a decade." Such goals will require
developing countries to take vital policy steps to increase economic growth rates.
They will also require a serious commitment by the donor community and the
multilateral development institutions. If these ambitious goals are met, w e can add
another target that w e should all want to achieve, and that is for the development
institutions - bilateral and multilateral -- to start working themselves out of
business. While it m a y seem like a strange measure of success - think about it such an achievement would m e a n that countries are relying on investment, private
capital, and entrepreneurship instead of pledges, concessions, and debt relief. It
would m e a n that the people of developing countries will have governments that
deliver basic services and provide for the rule of law; it will m e a n that they will have
a chance to better their lives and see their children educated; and it will m e a n that
they will know freedom and human dignity.
This is a very ambitious and forward-looking goal. But President Bush has already
taken the initiative to begin working toward it. H e set out a new economic growth
agenda for the multilateral development banks that focuses these institutions on
raising productivity growth and measurable results by channeling more funds to
countries that follow pro-growth policies, and by structuring our contributions to
create incentives for specific outcomes. H e called on the development banks to
increase the use of grants, rather than loans, to the poorest countries, and the
banks are already responding to this call.
Raising productivity growth depends on developing the private sector in individual
countries, including by expanding small businesses' access to credit. The M D B s
can play a useful role in advancing this goal. In particular, the U.S. has proposed
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that the International Finance Corporation (IFC) - the private-sector arm of the
World Bank Group - work with the International Development Association (IDA) to
promote lending by financial sector institutions to small and medium-sized
enterprises (SMEs) in Africa. This is intended to build on a number of successful
programs already in place in s o m e of the M D B s for S M E s , including those at the
European Bank for Reconstruction and Development (EBRD) for Russia and
Eastern Europe. The IFC and IDA are now developing this program for African
SMEs.
Producing measurable results requires fundamental changes in operating style. As
a first step, systems must be put in place to measure outcomes and facilitate
accountability. T o drive this change, the U.S. will m a k e results-based contributions
to the most recent replenishment of IDA, the flagship of development assistance
institutions. The U.S. has proposed to provide an additional $300 million in
contributions if IDA produces a results measurement system, expands essential
diagnostics and achieves progress toward concrete health, education and private
sector goals. A similar results-based mechanism w a s established for the Global
Environment Facility (GEF), with the final $70 million of our contribution tied to the
GEF's achieving specified, quantifiable program goals.
The U.S. has also persuaded the MDBs to begin increasing the use of grants,
instead of loans, to fund priority development activities in the poorest and least
creditworthy countries. Grants help poor countries m a k e productive investments
without saddling them with ever larger debt burdens. Recipients perceive grants to
be more valuable than loans, permitting higher performance hurdles and thus
enhancing development effectiveness and results. With strong U.S. urging, both
the World Bank's concessional window - IDA - and the African Development Fund
have agreed to increase sharply the share of resources provided in the form of
grants to the poorest countries, so that 18-21 percent of total assistance over the
next three years will be provided in grant form. The poorest countries are eligible
for 1 0 0 % grant financing for efforts to counter HIV/AIDS. Donors likewise
committed to increase grants in the International Fund for Agricultural Development
to 10 percent of total assistance. This year w e will seek to expand the use of grants
at other M D B s , particularly the Asian Development Bank through its facility for the
poorest countries, the Asian Development Fund.
I strongly believe that U.S. participation in the MDBs is vital to achieving the goals
of increased growth and improved living standards in the developing world. I look
forward to working with this Committee and the Congress, to help m a k e the M D B s
strong and effective institutions. In this context, I want to underscore the
importance w e attach to transparency in the operations of the M D B s . The United
States has long been a leading force for increased openness in these institutions,
and the Administration will continue to press strongly for greater openness. For
example, w e are working to ensure that all the M D B s put in place transparent
systems for allocating resources to countries that can use them effectively.
Authorization Requests
As part of this year's budget, the Administration is seeking authorization for
additional commitments to the HIPC Trust Fund. The HIPC authorization request
supports the U.S. contribution for its share of additional HIPC financing agreed to
by the President and other G-7 leaders. W e appreciate recent passage by the
House of Representatives of legislation (HR 254) to help implement the President's
proposals to reform the North American Development Bank and Border
Environment Cooperation Commission, and are working with the Senate to achieve
enactment as soon as possible.
In addition, Treasury has resubmitted requests for Congressional authorization for
U.S. contributions to most recent replenishments of IDA, the African Development
Fund, and the Asian Development Fund. Each of these funds provides critical
development assistance to the poorest and most vulnerable peoples of the world.
In early 2001, President Bush requested the authorization for the seventh
replenishment of the Asian Development Fund (ADF-8). In early 2002, he further
requested the authorization for the thirteenth replenishments of IDA and the ninth
replenishment of the African Development Fund (AfDF-9). Most recently, the F Y
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2003 Consolidated Appropriations Resolution appropriated related funds but did not
include authorization legislation for U.S. participation in these replenishments. This
situation is undermining United States reform-minded institutional leadership.
If it continues, it also will threaten to slow the provision of critical assistance to the
poorest countries and peoples in Africa, Asia and Latin America. Without the U.S.
contribution to IDA-13, IDA will not have enough resources to m a k e its normal
lending and grant targets for its 2004 fiscal year, which begins on July 1, 2003.
As Treasury Secretary, I believe that it is critical that the Congress pass
authorization legislation for U.S. participation in these replenishments as soon as
possible. I look forward to working with you and other m e m b e r s of Congress in
achieving this end.
Legislative Mandates and Reports
Finally, I would like to raise, as I did with your colleagues on the Appropriations
Committee two weeks ago, the issue of legislative mandates. Currently, Treasury
carries out an extremely large number of specific legislative mandates relating to
U.S. participation in the international financial institutions that have built-up over
time. S o m e mandates go back 50 years. S o m e provisions overlap, or are
inconsistent. There are 37 directed vote mandates and over 100 policy mandates,
plus numerous reporting, certification and modification mandates. T h e proliferation
of these legislative mandates can be confusing and counterproductive to U.S.
efforts to develop international economic policy and to implement it effectively in
these institutions. T h e U.S. Government's ability to influence other shareholders
and the institutions themselves could be enhanced by consolidation of these
mandates. I would like to work with you to rationalize and focus our mandated
reports and requirements, so that Treasury can work as effectively as possible in
pursuit of U.S. policy goals.
Conclusion
I appreciate this opportunity to review the Administration's international economic
agenda - our recent achievements and our ambitions going forward. I look forward
to continuing to work with this Committee and the rest of the Congress on the
important goals of promoting growth and improving lives both in the United States
and beyond.
Thank you. I welcome your questions.
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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 CONTACT: Office of Financing
May 13, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
Term: 28-Day Bill
Issue Date:
Maturity Date:
CUSIP Number:
May 15, 2003
June 12, 2003
912795MR9
High Rate: 1.000% Investment Rate 1/: 1.020% Price: 99.922
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted
5.73%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
21,463,700
44,346
0
Accepted
$
5,955,795
44,346
0
21,508,046
6,000,141
4,534,931
4,534,931
26,042,977
$
10,535,072
Median rate
0.980%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
0.800%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 21,508,046 / 6,000,141 = 3.58
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
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PRESS RQOM
FROM THE OFFICE OF PUBLIC AFFAIRS
May 14, 2003
JS-373
Written Testimony of David D. Aufhauser General Counsel
Department of the Treasury before the H o u s e Financial Services
Subcommittee Oversight and Investigations
M a y 14, 2003 10:00 a.m.
The United States House of Representatives
Madame Chair and distinguished Members of the Subcommittee on Oversight and
Investigations, thank you for inviting m e to testify today about the Treasury
Department's efforts to track down, freeze, and repatriate to the people of Iraq
assets that have been systematically looted by S a d d a m Hussein, his family, and his
cronies. While major combat operations in Iraq are over and the Hussein regime
has been toppled, the search for assets continues. Our task is clear - identify and
repatriate all assets, whether they are held in the n a m e of the Iraqi government or
hidden in the international financial system behind a m a z e of front companies and
straw men. Whatever Hussein's legacy m a y be, it must not include successfully
stealing and hiding billions of dollars in the international financial system.
Today I will stress two overarching themes that help to put our task into perspective
- first, identifying and securing the repatriation of Hussein's assets is but one part of
this Administration's multifaceted effort to rebuild Iraq for the Iraqi people.
President Bush has m a d e it clear to the world that our liberation of the Iraqi people
did not end with the elimination of Hussein's regime. It is our obligation to alter the
economic conditions that permitted Hussein to thrive and repress the Iraqi people,
creating instead the opportunity for democracy and self-determination. Second,
while it is obvious, it bears repeating: the hunt for Hussein's assets is not solely a
Treasury initiative. The complex challenge of uncovering the trail of illicit money in
a country that has suffered under a Stalin-esque dictatorship for 25 years demands
that our government agencies work together in a coordinated manner. And that is
precisely what w e are doing. Working closely with the intelligence community and
the Departments of State, Defense, Justice, and Homeland Security, w e have
launched a comprehensive effort to hunt down these assets and enhance the
likelihood of their return to the Iraqi people.
I want to take a moment to emphasize why we are engaged in these efforts. First
and fundamentally, w e have an obligation to ensure that assets rightfully belonging
to the people of Iraq are located and returned. Second, wherever illicit assets m a y
be hidden, w e must not permit them to find their way into the hands of terrorists.
Third, global efforts to identify and repatriate assets stolen by Hussein will serve as
a strong deterrent against other tyrants and kleptocrats w h o seek to loot their
countries and then place those funds out of reach in the international financial
system. Finally, the exploitation of financial documents and the questioning of
individuals with knowledge of Hussein's financial w e b m a y well help us to track
down weapons of mass destruction, suppliers of those weapons, or agents of the
regime that m a y be hidden abroad.
In sum, our plan for recovering Iraqi assets has the following elements:
• Exploiting documents and key financial figures in Iraq to better understand fund
flows;
• Securing the cooperation of jurisdictions through which illicit funds have flowed so
that w e m a y exploit financial records and uncover the money trail;
• Securing the cooperation of jurisdictions in which illicit assets may reside to
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locate, freeze, and repatriate the assets;
• Engaging the financial community in the hunt for illicit assets generally, and
specifically secure the cooperation of financial institutions through which illicit funds
have flowed or m a y still reside;
• Developing a system to facilitate the fluid repatriation of funds; and
• Preparing for potential sanctions against uncooperative jurisdictions and financial
institutions.
I. The Systematic Looting of a Nation
We may never know the full extent to which the Hussein regime stole from the Iraqi
people, or h o w much money remains hidden in the international financial system.
Criminals rarely keep consolidated accounting records. What continues to emerge
from the rubble of Hussein's fallen regime is a disturbing tale of his ability to create
a w e b of deceit under a comprehensive international sanctions program; a w e b in
which he trapped and victimized his o w n people.
This we do know. Hussein's circumvention of the United Nations sanctions regime
to the financial benefit of his regime has been open, notorious, and welldocumented. Sanctions imposed by the U N Security Council beginning in 1990
were sweeping, barring virtually all commercial transactions with Iraq. T h e
international community moved quickly to implement these and subsequent U N
Security Council Resolutions.
In 1995, building upon previous humanitarian exceptions to the sanctions regime,
the international community further responded to the plight of the Iraqi people by
creating the oil-for-food (OFF) program: permitting the official sale of Iraqi oil and
placing the proceeds in a designated U N account to be used for humanitarian
purposes.
Despite the laudable goals of the OFF program and the best of intentions, Hussein
intentionally exploited the program to generate substantial illicit income. Hussein
not only survived under the U N sanctions regime, he flourished. The various ways
in which he subverted sanctions have been widely reported and include:
• Sales of oil outside of the OFF program - from the inception of the sanctions
program through the development of the O F F program, Iraq conducted illegal oil
sales to its neighbors by pipeline, tanker truck, and barge.
• Skimming and kickbacks on oil legitimately sold through the OFF program - price
manipulation and additional surcharges deposited to separate accounts provided a
significant revenue source within the otherwise legitimate oil sales program.
• Kickbacks and surcharges on humanitarian purchases under the OFF program
and other schemes.
Various estimates exist as to the money illegally generated outside of the OFF
program. In its M a y 2002 report, the G A O "conservatively" estimated that Hussein
regime amassed $6.6 billion in illegal revenue from oil smuggling and skimming on
U N sanctioned oil sales from 1997 to 2001.
Even more challenging is to estimate the amount of money Hussein and his family
personally amassed before the beginning of Operation Iraqi Freedom. While
estimates range from $2 billion to $40 billion, w e simply do not yet know h o w much
of this wealth still exists in accounts throughout the world.
II. Assets of the Iraqi Government
On March 20, one day after the military phase of the liberation of Iraq began,
President Bush vested in the United States Iraqi government assets frozen upon
the imposition of economic sanctions in 1990. Secretary S n o w and Treasury's
Office of Foreign Assets Control implemented the vesting order, directing that $1.7
billion be deposited in a special account at the Federal Reserve Bank of N e w York.
Vesting under the International Emergency Economic Powers Act, which is itself a
n e w authority given to the President in the U S A P A T R I O T Act, provides us with
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m a x i m u m flexibility to repatriate these assets. Secretary S n o w has already ordered
initial disbursements of those funds to meet the immediate humanitarian needs of
the Iraqi people.
Concurrent with the vesting of assets, we began working with the State Department
to engage other jurisdictions around the world to identify, freeze and m a k e available
Iraqi government assets for repatriation. These outreach efforts, which include
efforts to secure not only Iraqi government assets, but also illicit assets of Hussein
and his family, have taken place on m a n y fronts. For example, w e have sent out
cables and demarches to more than 50 countries seeking cooperation in our hunt
for assets. W e have had and continue to have extensive bilateral and multilateral
meetings with key jurisdictions. For example, w e took advantage of the IMF/World
Bank meetings held in Washington last month to hold several important bilateral
meetings to discuss the matter. Both Treasury and State officials have placed
telephone calls to their counterparts in key jurisdictions. A n d Secretary S n o w
brought this message to the meeting of the G 7 last month.
The response of other nations to our renewed call to locate illicit Iraqi assets has
been positive. T o date, w e believe that an additional $1.2 billion has been located
and held in "suspense" accounts pending further dialogue. Cooperation has c o m e
from m a n y jurisdictions. W e will continue this outreach process to engage other
jurisdictions to locate and freeze all additional Iraqi government assets.
III. Illicit Assets of Hussein, his Family, and his Cronies
The greatest challenge lies in identifying and tracing the flow of funds that Hussein
has stolen and injected into the international financial system. The funds m a y be
hidden in a w e b of front companies and straw men, spun to avoid detection. It is
therefore essential that w e assemble evidence from all sources, in Iraq as well as in
other jurisdictions.
Exploitation of documents and individuals in Iraq and transiting jurisdictions. The
obvious, but essential, first step in tracing the illicit assets is to locate evidence that
m a y exist, whether it be the financial audit trail or h u m a n intelligence. W e have
already begun assembling interagency teams of forensic investigators and sending
them to Iraq to assist the Department of Defense with the search for evidence.
These teams will also be available to assist jurisdictions used as conduits for illicit
funds with their o w n searches for relevant documents and evidence.
Enlisting the cooperation of transiting and nesting jurisdictions. We must have
cooperation all along the emerging money trails, from all the jurisdictions through
which funds transited, as well as jurisdictions in which funds m a y have ultimately
nested. The scope of this search is ever-expanding. International assistance is
needed to track the illicit assets of Hussein, his family, his cronies, and the front
companies and straw m e n they used. A s w e develop more specific information
about m o n e y flows, I expect the intensity of interaction and cooperation to increase.
Enlisting the cooperation of the private sector. The hunt for illicit assets will take us
through the doors and into the records of financial institutions worldwide. It is
therefore vital that financial institutions lend their assistance to our efforts. W e
expect financial institutions to be vigilant against accepting the proceeds of
corruption, and w e expect that w h e n w e develop specific information on m o n e y
trails, financial institutions will assist in the recovery effort.
Possible sanctions. Our message from outset has been clear - we expect that
jurisdictions and financial institutions will assist us in our efforts to recover the
plundered assets of the Iraqi people. Our experience thus far has been positive.
But in the event of recalcitrance, w e have available to us various tools to encourage
both jurisdictions and individual institutions to cooperate. For example, section 311
of the U S A P A T R I O T Act gives the Secretary of the Treasury, in consultation with
other agencies, the authority to require U.S. financial institutions to take appropriate
countermeasures against foreign jurisdictions or foreign financial institutions that
the Secretary finds to be of primary money laundering concern. This authority
includes the power to cut off access to the U.S. financial system. Should it be
necessary, a jurisdiction's or a foreign financial institution's refusal to search for and
eliminate accounts holding illicit proceeds m a y fall within the purview of this
provision.
Developing an International Mechanism to Secure the Repatriation of Iraqi Assets
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Our efforts to recover illicit Iraqi assets highlights the problem of securing the
repatriation of assets that are stolen by kleptocrats and placed in the international
financial system. Recent examples demonstrate that locating illicit assets is just the
beginning. T h e government of the Philippines located accounts throughout the
world where Ferdinand Marcos had stashed illicit funds under the n a m e s of real
and fictitious friends and accomplices, but the effort to repatriate those assets
through traditional m e a n s has taken over a decade.
Under the auspices of the United Nations, the United States has been participating
in the negotiation of an international convention that will strengthen international
mechanisms to locate, seize and return assets stolen by kleptocrats. These
negotiations are not scheduled to conclude until the end of 2003, and
implementation of such an agreement on a global basis is likely years away.
While the United Nations continues its efforts to devise a general mechanism to
facilitate recovery of illicit assets on a global scale, immediate arrangements must
be m a d e for the fluid repatriation of Iraqi assets, both those in the n a m e of the Iraqi
government as well as illicit Hussein assets. O n e possibility is a U N Security
Council Resolution related directly to the recovery of funds of the government of
Iraq that have been frozen pursuant to existing Resolutions. Another possibility is
consultations or arrangements among jurisdictions that have located illicit Iraqi
assets within their borders in order to facilitate resolution of third party claims, and
thus expedite the return of those assets to Iraq.
Separately, the hunt for illicit Iraqi assets reinforces the need for financial
institutions to take responsibility to ensure they do not become the haven for the
proceeds of corruption. Treasury is completing work on a regulation implementing
a provision of the U S A P A T R I O T Act, section 312, that will place renewed
emphasis on U.S. financial institutions to guard against accepting the proceeds of
foreign corruption from kleptocrats, their families, and other associated "politically
exposed persons" in the first place.
We are not alone in pursuing this type of regulatory requirement. In Switzerland, for
example, recent amendments to Swiss anti-money laundering laws and regulations
are designed to enhance protections against accepting the proceeds of foreign
corruption from politically exposed persons. Additionally, the Financial Action Task
Force, as well as groups of private financial institutions, have addressed the need
for financial institutions to guard against accepting funds looted by other countries'
political figures.
V. Results
Since March 20th, an additional $1.2 billion in Iraqi government assets have been
placed beyond the reach of the former regime, the United States vested $1.7 billion
in assets, the movement of those vested assets back to Iraq has begun, U.S.
financial investigators are in Iraq, and every day w e are learning more about the
m a z e of Hussein's money trails. This is a time-consuming, laborious, and
potentially dangerous task. This is a process that, by its very nature, will take time.
W e o w e a debt of gratitude to the civilians w h o are engaged in these efforts.
As you know, on April 20, 2003, our troops on the ground discovered nearly $900
million worth of currency. W e are n o w in the process of examining the authenticity
of the currency, checking for counterfeiting, and attempting to determine where it
c a m e from.
Beyond this, our success to date is measured in terms of commitments from other
jurisdictions to join in this effort, investigative teams assembled and inserted into
Iraq, and the review of evidence already obtained. Our purpose is clear and w e will
continue to provide this Committee with updates on our progress.
Madame Chair, we are engaged in an important task intended to have a significant
and tangible impact on the people of Iraq w h o have suffered for so m a n y years
under the repression of S a d d a m Hussein. Treasury will continue to work with our
sister departments and agencies to secure the cooperation of the international
community to locate, freeze, and repatriate Iraqi assets. This concludes m y formal
testimony and I would be pleased to answer any questions that you, or m e m b e r s of
the Committee, m a y have.
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Thank you.
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JS-374: D A S Michael Dawson's Remarks on the U S A PATRIOT Act Task Force
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F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 14, 2003
JS-374
Remarks by
Michael A. Dawson
Deputy Assistant Secretary for
Critical Infrastructure Protection and Compliance Policy
To
The Bank Secrecy Act Advisory Group
Washington, D.C.
"The U S A PATRIOT Act Task Force:
A Progress Report"
It is a great pleasure for me to speak to you today and to report on the progress of
the U S A PATRIOT Act Task Force.
It is a pleasure because so many of you are good friends. So many of you have
been generous with your time and helped m e to understand the nuances of your
agency, your industry, your priorities, your concerns. I have learned much from
many of you. I know that w e will continue to work together in the future.
It is also a pleasure to speak to you because of what I have to report: hard work, a
close public private partnership, a common commitment to maximizing the
effectiveness of the rules implementing the U S A PATRIOT Act, and a shared
understanding of how difficult are the challenges w e face together.
In a moment, I will review the origin and work of the Task Force. I will not be able
to report on the findings of the Task Force - they haven't been made yet. But I will
be able to discuss with you some common themes that have emerged during the
course of the Task Force's work. When I finish, I hope that you will share with m e
my belief that the Task Force will make a difference, that it will help improve the
effectiveness of the regulations implementing the U S A PATRIOT Act.
Before doing all that, however, I want to emphasize three important points.
First, the U.S. financial sector has in general done a remarkable job of complying
with the obligations of the U S A PATRIOT Act and its implementing regulations.
Never before have so many new anti-money laundering regulations been imposed
on so broad an array of financial institutions in so short a time. Financial institutions
have spent a lot of time and money implementing the Act. Many of you in this room
know this to be true. Indeed, many in this room are partly responsible for ensuring
that your institutions meet the letter and the spirit of their new obligations. I a m
proud of the record of compliance by the U.S. financial services industry. While
there are, of course, exceptions - rotten apples - they have not spoiled the whole
bunch. The record of compliance by the U.S. financial services industry is
commendable. And I thank you for it.
Second, you have shouldered your new obligations without complaint. Over the
past several months, the Task Force has met with scores of representatives of
financial institutions and their trade associations. Not once did a financial institution
complain to m e about the burdens they have shouldered to help us wage the
financial front of the war on terror. Not once. No financial institution has
complained to m e - or to m y knowledge any other participant in the Task Force about the time and money they are spending on this important area. This is
particularly remarkable in these times, when many financial services firms have
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faced significant pressure to cut costs and s o m e financial services firms have even
had to let employees go. I appreciate what you have done. Again, thank you.
No one should be surprised by the quiet commitment of the financial services
industry to fighting terror. W e , like you, remember September 11. W e remember
your friends and colleagues w h o m Al Qaeda murdered. W e remember the
employees of U.S. financial institutions w h o died trying to save others. W e
remember our o w n employees - from the IRS and from the United States Secret
Service - w h o lost their lives W e are constantly mindful that Al Qaeda targeted the
financial sector on September 11. W e are constantly mindful that terrorists
continue to look for ways to harm the U.S. economy in general and the financial
sector in particular.
The third point I wish to emphasize really gets to the heart of the challenge that lies
before us. While no one I met over the past several months complained about the
burden they are shouldering, virtually every person I met wanted to know whether
their hard work is making a difference. They pleaded with us for more information as specific as possible - that would indicate that their commitment of time and
resources is helping us win the war on terror.
Why? It's not because they are curious. It's because they want to make sure that
the time and resources they are devoting to this effort are well spent. There is a
limit to the amount of resources that financial services firms can devote to the
financial front of the war on terrorism -just as there are limits on the resources that
w e can devote to the physical war. All financial services firms, therefore, want to
use their resources for m a x i m u m impact. They want to be able to report to their
boards on the return on investment that the resources have generated - h o w the
time and money they've spent have helped us fight the war.
It is in the government's interest to provide financial institutions with this
information. The government, like you, wants to ensure that your resources are put
to their most productive use in the financial front of the war on terrorism. W e , quite
literally, want to maximize the bang w e get out of your bucks. W e want to sustain
your institutions' commitment to the financial front of the war on terror, by showing
you h o w valuable your efforts are. Of course, there are limits to what information
w e can share. W e can't compromise open investigations. W e can't compromise
sources and methods of collecting intelligence. There are also limits to the
information w e have. It is difficult to quantify the deterrent impact of the
regulations. It is also difficult to trace s o m e of the specific successes in the
financial front of the war on terror to the efforts of specific institutions to comply with
specific provisions of the U S A P A T R I O T Act. Our principal challenge is to work
together within these constraints to develop and share information that helps
maximize the effectiveness of the regulations and sustains the strong private sector
commitment to fighting terror.
I hope you will keep those three observations - your commendable record of
compliance, your patriotic commitment, and your legitimate need for information in mind as I review the origins and initial work of the Task Force.
Treasury created the Task Force in September of 2002 - one year after the attacks
and shortly before the one year anniversary of enactment in October of 2002 by
Congress and President Bush of the U S A P A T R I O T Act.
As you know, after Congress and the President enacted the USA PATRIOT Act,
Treasury promulgated many new regulations and revised existing regulations in a
hurry. Our haste w a s appropriate. Given the ongoing terrorist threat, w e wanted to
have these anti-terrorist finance measures into place as quickly as possible. In
addition to acting quickly, w e issued regulations governing types of financial
services firms that w e had not regulated before.
We believe that we did a good job. We had a lot of help from you, of course. We
also had a lot of help from the Congress and our sister regulatory agencies.
But we acted with imperfect information. We had only imperfect information about
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JS-374: D A S Michael Dawson's Remarks on the U S A PATRIOT Act Task Force
.rage ^oit
what the precise impact of the new regulations would be on financial institutions.
W e had only imperfect information about the terrorist financing behavior that w e are
trying to stop.
Treasury's idea, therefore, was to establish the USA PATRIOT Act Task Force to
take a second look at the regulations that w e had promulgated. Our idea w a s to
reach out to you, to the regulated community, to the regulators, to the law
enforcement agencies, and to consumer advocates for ideas on h o w to m a k e the
regulations better. Better. Not necessarily tougher or looser, but better. Better at
getting the most bang out of your buck. More effective at using your resources to
stop terrorist financing.
I wish to note that we limited the scope of the Task Force to a retrospective look
back at final regulations that w e had already promulgated. Pending or future
regulations were developed pursuant to the prescribed procedures under the
Administrative Procedures Act.
Subject to that limitation, Treasury created the Task Force with the purpose of
maximizing the effectiveness of the regulations implementing the U S A P A T R I O T
Act. The Task Force's members are the senior leaders of the Department: the
Under Secretaries for both Domestic Finance and International Affairs and the
General Counsel. Each policy arm of the Department has assigned a lead staff
person to do the leg work. I w a s that person for the Deputy Secretary when the
Task Force w a s first created. I a m that person now for the office of Domestic
Finance. As such, I a m personally familiar with the work of the Task Force.
Our research plan was relatively simple and straightforward. We have reached out
to representatives from numerous financial services companies and their trade
associations. The trade associations w e met with included the following: the
American Bankers Association, America's Community Bankers, the Independent
Community Bankers Association, the American Council of Life Insurers, the Credit
Union National Association, the American Financial Services Association, the
American Gaming Association, the Securities Industry Association, the Futures
Industry Association, the Non-Bank Money Transmitters Group, the Money Order
Sellers Group, and the Financial Services Roundtable.
We also met with many financial regulators including the following: the Federal
Reserve Board, the National Credit Union Administration, the Securities and
Exchange Commission, the Office of the Comptroller of the Currency, the Office of
Thrift Supervision, the Federal Deposit Insurance Corporation, and the Commodity
Futures Trading Commission.
In addition, we reached out to the several law enforcement agencies. And,
because many of the provisions have a direct impact on the privacy interests of
legitimate consumers of financial services, w e met with consumer advocacy
groups.
We refused no request for a meeting by any interested party.
Where possible, we held our meetings outside of Washington, in financial centers
like N e w York and Charlotte. W e met in Atlantic City with representatives of the
gaming industry.
This outreach led to many candid and open discussions. In addition, we have
received ten written submissions from industry groups.
Through this outreach and the written submissions, we received many constructive
suggestions for improving the U S A P A T R I O T Act, its implementing regulations, and
government practice in administering programs under the U S A P A T R I O T Act.
W e have taken the best of these suggestions and are in the process of presenting
them to our senior leadership for their review. W e expect the project to generate
several specific improvements to the Act and its implementing regulations and
practices. But it is too soon to tell you what they will be.
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While it is too soon to tell you what those specific improvements will be, I can report
on s o m e examples of themes that emerged during the course of the Task Force's
work.
• Better guidance. One recurring themes was a call for better guidance about how
the regulations would be applied in practice. W e received several suggestions for
h o w to improve guidance. For example, many suggested that Treasury and other
regulators issue staff commentary along with their regulations. A s another
example, several suggested that w e find a way to provide coordinated guidance in
response to specific questions when they arise as financial institutions apply the
regulations to specific, real-world circumstances. A s still another example, too
many people brought to our attention instances in which examiners applied the
regulations in the field in a way that w a s not consistent with the risk-based
approach w e have taken in writing the regulations. These people suggested that
w e find a way to improve the consistency of such in-the-field applications of our
regulations.
• Reliance on third parties. Several of the entities that we talked to asked for
guidance on when they could rely on the anti-money laundering programs of
qualified third parties. Many of the people w e talked to explained that numerous
financial transactions typically involve several different financial institutions. These
people asked us to consider the effectiveness of imposing requirements on every
institution in a transaction and whether certain institutions could rely on the
compliance efforts of others.
• Better feedback. Virtually all of the private sector representatives we talked to
called for better information about what works in the financial front of the war on
terror. They want to do more of what works, perhaps by shifting resources
allocated to programs that do not produce results. They also want to be able to
report to their senior leadership and their boards of directors how their investments
in anti-money laundering and anti-terrorist finance programs are contributing to the
war on terror.
These are some of the themes that have emerged as the Task Force has
conducted its research. There are other themes. In addition, there are m a n y
specific suggestions. W e are considering all of them. While it is too soon for m e to
tell you what specific improvement will result from the work of the Task Force, I
believe that w e have much constructive material to work with and that wellgrounded, specific improvements should c o m e out of this process.
I wish to close by emphasizing that we are in this together. The financial services
industry and the financial regulators have worked together to implement the U S A
P A T R I O T Act. W e have worked together to find ways to improve the effectiveness
of the Act and its implementing rules. The recent bombings in Saudi Arabia
demonstrate that the terrorist threat remains real. W e must remain vigilant. And
w e must also continuously strive to improve the effectiveness of the statute and
rules that are important to the financial front of the war on terror.
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JS-375: Oral Testimony of David D. Aufhauser: House Financial Services Subcommittee
Page 1 of 2
PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 14, 2003
JS-375
Oral Testimony of David D. Aufhauser
General Counsel
Department of the Treasury
Before the
House Financial Services Subcommittee
Oversight and Investigations
May 14, 2003,10:00 a.m.
The United States House of Representatives
A great deal of money will be required to put Iraq back on an even keel. But that is
not because of 25 days of war. It is because of 25 years of tyranny - a tyranny that
made prisoners of thought, criminals of honest enterprise, and widows of the
tortured brave. The long war with Iran, the unlawful invasion of Kuwait, the
elevation of public corruption to an art form, the decade of sanctions book-ended by
obscene palace extravagances while the c o m m o n m a n lined-up at one of 55,000
U N food distribution points, all bankrupted a rich country in everything except the
hunger for freedom.
Now that they have freedom, the Iraqi people deserve the return of their wealth: (i)
the inestimable wealth of the oil in their soil; (ii) $1.7 billion of vested assets in the
U.S.; (iii) $2.3 billion similarly held in blocked or frozen accounts in countries around
the globe; (iv) the recovery of the stolen assets of the Central Bank; (v) unallocated
UN-OFF money; (vi) a donor fund from the community of nations; and (vii) the
identification, capture and repatriation of the hidden money or previously
unaccounted for wealth of the nation.
This last tranche of money is expected to occupy much of this morning's testimony.
And it should - not because w e are Pollyannaish in the belief that much of it has not
been misspent in acts of unimagined profligacy; and not because it makes good
theater; and not because much of it may already have taken flight.
But rather, it is the right thing to do for so many reasons. Whatever unfound money
there is, ought to be returned to feed people. Whatever the hidden wealth, it needs
to be captured before it falls into the hands of purveyors of terror. And whatever
commerce took place by corrupting the U N Food for Oil Program, and by nakedly
gaming its economic sanctions program needs to be punished by denying profit to
illegal trade.
This last point is perhaps the most troubling. Some of the best of our kids perished
in Iraq because a significant part of the world did not effectively enforce the U N
economic sanctions program to keep arms from Saddam Hussein. O n e of the first
acts of the Bush Administration was to introduce a resolution in the U N to "smarten"
those sanctions, to accelerate the delivery of humanitarian goods, to close the
trafficking in smuggled oil, and to try to stem the holiday of corruption that Hussein
made of the Oil for Food Program. The former succeeded, the latter did not. And
the price has been the lengthened tenure for a tyrant and blood in the sand.
The search for the hidden wealth of Hussein and his regime is, therefore, more than
a search for assets. It is a reaffirmation of the rule of law and a necessary
reinforcement of the notion that while economic sanctions can be a powerful tool for
policing state sponsors of terror or the enemies of democracy, if casually enforced,
they can be a lethal tonic of false security.
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Ja-375: Oral Testimony of David D. Aufhauser: House Financial Services Subcommittee
Page 2 oil
So the search both in country and around the globe is an imperative. There are
promising advances both in process and in the capture of previously unknown
monies.
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JS-376: Treasury to Delay Announcement of Weekly Bills
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F R O M THE OFFICE OF PUBLIC AFFAIRS
May 15, 2003
JS-376
Treasury to Delay Announcement of Weekly Bills
The Treasury Department is postponing announcement of its weekly 13-week and
26-week bill auctions, scheduled to be announced May 15, 2003, until further
notice.
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JS-377: Statement by Treasury Secretary John W . Snow in Advance of the G 8 Finance M...
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PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 15, 2003
JS-377
Statement by Treasury Secretary John W. Snow
in Advance of the G 8 Finance Ministers Meeting
***Correct Copy***
I look forward to meeting with my fellow finance ministers in Deauville this weekend
in advance of the G-8 Summit in Evian.
Growth must remain our top priority. I underscored this at my first G7 meeting in
February, and when w e last met in April, noting that the world economy is falling far
short of its potential. This remains the case today. The United States is doing its
part by aggressive and timely monetary and fiscal action. The President's Jobs and
Growth program will further accelerate the U.S. recovery. But a healthy global
economy needs multiple engines of growth. Our G-7 partners must immediately
take their own steps, appropriate to their own circumstances, to spur growth, create
jobs and contribute to global prosperity. Structural reforms are particularly
important to unleash potential in some of our economies.
I also expect to engage my counterparts in a discussion of the needs in Iraq.
Coalition forces in Iraq are addressing the humanitarian needs of the country and
have begun the arduous but hopeful task of reconstructing Iraq and rebuilding its
economy after decades of misrule. I will continue a discussion initiated at our last
meeting regarding Iraqi debt. As w e previously agreed, debt discussions will take
place in the context of the Paris Club. In addition, I would like to explore a role for
the IMF in dealing with the issue as well. I believe that no one should expect Iraq to
begin to make debt payments for some time.
I commend the World Bank and the IMF for agreeing to begin assessment activity
in Iraq. This is good news. W e look forward to the full participation of the
international financial institutions to help Iraq to rebuild and to rejoin the
international economy. It will also be useful this weekend to begin discussions on a
process for individual countries to donate funds for ongoing reconstruction efforts in
Iraq. Finally, I will urge the ministers to do everything in their power to make seized
assets available to the Iraqi people and to aggressively continue the search for the
illegal assets of the corrupt regime of Saddam Hussein.
Our global efforts to track down, freeze, and repatriate to the people of Iraq assets
that have been systematically looted by Saddam Hussein, his family, and his
cronies are critical.
While major combat operations in Iraq are over and the Hussein regime has been
toppled, the search for assets continues. Our task is clear - identify and repatriate
all assets, whether they are held in the name of the former Iraqi government or
hidden in the international financial system behind a maze of front companies and
straw men. Whatever Hussein's legacy may be, it must not include successfully
stealing and hiding billions of dollars in the international financial system.
Improving investor confidence through strengthened corporate governance has
been a key focus of G-7 discussions this year. The essence of this effort is
reinforcing corporate governance practices, market discipline, transparency and
regulation in line with agreed principles. The United States has taken strong steps
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JS-377: Statement by Treasury Secretary John W . Snow in Advance of the G 8 Finance M...
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to punish wrongdoing and improve oversight through the President's Ten-Point Plan
and implementation of the Sarbanes-Oxley Act. I will m a k e clear to m y colleagues
the United States' ongoing commitment to be active in ensuring accountability and
promoting transparency.
Clear progress has been made in preventing financial crises and providing for
smoother resolution of those that occur. The United States applauds the increasing
use of collective action clauses in external debt, with Mexico, Brazil, Uruguay and
South Africa all having included these clauses in recent issues. With European
Union countries to be issuing soon with collective action clauses and other
emerging market countries seriously considering doing so, the m o m e n t u m is
building. Widespread use of these clauses will provide the basis for more orderly
debt workouts. W e will also discuss this weekend a n e w w a y for the Paris Club to
address countries' debt problems - tailoring relief to each country's particular debt
sustainabiiity situation while keeping debt restructuring as a last resort.
As time passes, it is important that we maintain focus and momentum in the
ongoing fight against terrorism financing. Finance Ministers will review this
weekend the significant progress m a d e in this effort, including the IMF and World
Bank's pilot project to assess countries' anti-money laundering and terrorist
financing regimes. W e look to the Financial Action Task Force to continue its work
and to cooperate more closely with the United Nations and the IFIs to achieve
widespread compliance with international standards.
The challenges of reducing poverty and promoting growth in the poorest countries
remain an important part of the G-8 agenda. Achieving results will depend on
countries' o w n commitments to reform, growth and good governance. T h e
President's proposed Millennium Challenge Account ( M C A ) takes the concepts of
rewarding performance and measuring results and turns it into an operational action
plan. A s reinforcement for the United States' strong commitment to help the
poorest countries achieve growth and reduce poverty, the President has requested
$1.3 billion for M C A this year, increasing to $5 billion by year three and thereafter.
He has also proposed $10 billion in new money to combat HIV/AIDS over the next
five years and $200 million in new money to address famine and food security
worldwide this year. Of course, strong global growth will help reduce poverty in the
world's poorest countries, which again underscores why growth must remain the
G8's top priority.
h t t p : / / v / w w tr^fls £?ov/nress/releases/js377.htm
7/29/2003
JS-378: Clarida Departs Treasury and Receives the Treasury Medal
Page 1 ot
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 15, 2003
JS-378
Clarida Departs Treasury and Receives the Treasury Medal
Today Treasury Assistant Secretary for Economic Policy Richard H. Clarida will
leave the Treasury Department to return to Columbia University as Professor of
Economics and International Affairs. He has served at the Treasury Department
since September 11, 2001.
On Monday May 12, 2003, Treasury Secretary John Snow presented Clarida with
the Treasury Medal, in recognition of his outstanding service. Secretary Snow
delivered the following Citation:
"As Assistant Secretary for Economic Policy, Richard H. Clarida's leadership in
implementing the Administration's economic program was invaluable during the
difficult and uncertain times following the terrorist attacks of September 11th. His
creativity and resourcefulness led to the development of a new real-time economic
model for forecasting current quarter G D P that satisfied a growing need for timely
and accurate data on the pace of economic activity, a model with a commendable
record. He set the standard for making economic information readily accessible to
Administration officials through electronic updates, weekly reviews, and special
reports, tailoring them to be succinct and relevant to policy-makers.
"Mr. Clarida also played a leading role in the development of the first complete
dynamic analysis of a major fiscal policy proposal, the President's Jobs and Growth
program, and tirelessly promoted the proposal in the financial community and to the
general public. Following the revelations of corporate scandals, his sound advice
and wise insight helped form critical corporate governance and financial accounting
reform proposals. Mr. Clarida also led major improvement efforts on Social
Security and Medicare Trustees Reports analyses to better document and explain
the extent of shortfalls facing those essential social insurance programs and the
need for reform.
"Mr. Clarida was bold in taking on tough issues not traditionally in the portfolio of
Economic Policy. On the domestic side, he furthered Treasury interests in
improving the understanding and ability to forecast Federal receipts. His
comprehensive, global vision helped clarify the interaction of domestic and foreign
economic developments.
He played a vital role in jumpstarting the U.S.--Mexico Partnership for Prosperity,
spearheading a plan to create a more efficient housing finance market in Mexico.
"In recognition of his intelligence and wisdom in service to the Treasury Department
and the Nation, his steadfast devotion to duty, and his lasting contributions, Richard
H. Clarida is awarded the Treasury Medal."
httn://www.treas.gov/pjess/releases/is378.htm
7/?Q/?nm
>RESS R O O M
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 14, 2003
JS-379
U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets
totaled $81,827 million as of the end of that week, compared to $80,770 million as of the end of the prior week.
I. Official U.S. Reserve Assets (in US millions)
TOTAL
M a v 2, 2003
Mav 9, 2003
80,770
81,827
1. Foreign Currency Reserves]
Euro
Yen
TOTAL
Euro
Yen
TOTAL
a. Securities
7,335
13,207
20,562
7,550
13,421
20,971
0
Of which, issuer headquartered in the U.S.
0
b. Total deposits with:
b.i. Other central banks and BIS
12,051
2,652
14,703
12,372
2,695
15,067
b.ii. Banks headquartered in the U.S.
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
b.iii. Of which, banks located in the U.S.
0
0
22,920
23,109
11,542
11,637
11,043
11,043
0
0
2. IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
3
4. Gold Stock
5. Other Reserve Assets
II. Predetermined Short-Term Drains on Foreign Currency Assets
M a v 2, 2003
Euro
1. Foreign currency loans and securities
Yen
M a y 9, 2003
TOTAL
Euro
0
2. Aggregate short and long positions in forwards and futures in foreign currencies vis-a-vis the U.S. dollar:
Yen
TOTAL
0
2. a. Short positions
0
0
2.b. Long positions
0
0
3. Other
0
0
III. Contingent Short-Term Net Drains on Foreign Currency Assets
M a v 2, 2003
Euro
1. Contingent liabilities in foreign currency
Yen
M a v 9, 2003
TOTAL
0
Euro
Yen
TOTAL
0
l.a. Collateral guarantees on debt due within 1
year
l.b. Other contingent liabilities
2. Foreign currency securities with embedded
options
0
3. Undrawn, unconditional credit lines
0
0
0
0
0
3. a. With other central banks
3.b. With banks and otherfinancialinstitutions
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.l. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.l. Bought calls
4.b.2. Written puts
Notes:
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. Foreign Currency Reserves for the latest week may be subject to revision. Foreign Currency
Reserves for the prior week are final.
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 SDR/dollar exchange rate for the reporting date. The entries for the latest week reflect any
necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. IMF data for the latest week m a y be
subject to revision. IMF data for the prior week are final.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
-HL5S R O O M
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 7. 2003
JS-380
U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets
totaled $80,770 million as of the end of that week, compared to $80,114 million as of the end of the prior week.
I. Official U.S. Reserve Assets (in US millions)
April 25, 2003
Mav 2, 2003
80,114
80,770
TOTAL
1. Foreign Currency Reserves1
Euro
Yen
TOTAL
Euro
Yen
TOTAL
a. Securities
7,267
13,081
20,348
7,355
13,207
20,562
0
Of which, issuer headquartered in the U.S.
0
b. Total deposits with:
b.i. Other central banks and BIS
11,890
2,626
14,516
12,051
2,652
14,703
b.ii. Banks headquartered in the U.S.
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
b.iii. Of which, banks located in the U.S.
0
0
22,838
22,920
11,309
11,542
11,043
11,043
0
0
2. IMF Reserve Position
2
3. Special Drawing Rights (SDRs)
2
4. Gold Stock3
5. Other Reserve Assets
II. Predetermined Short-Term Drains on Foreign Currency Assets
April 25, 2003
Euro
1. Foreign currency loans and securities
Yen
M a y 2, 2003
TOTAL
Euro
0
2. Aggregate short and long positions in forwards and futures in foreign currencies vis-a-vis the U.S. dollar:
Yen
TOTAL
0
2. a. Short positions
0
0
2.b. Long positions
0
0
13. Other
0
0
III. Contingent Short-Term Net Drains on Foreign Currency Assets
April 25, 2003
Euro
1. Contingent liabilities in foreign currency
Yen
M a v 2, 2003
TOTAL
0
Euro
Yen
TOTAL
0
l.a. Collateral guarantees on debt due within 1
year
l.b. Other contingent liabilities
2. Foreign currency securities with embedded
options
0
0
3. Undrawn, unconditional credit lines
0
0
0
0
3.a. With other central banks
3.b. With banks and other financial institutions
Headquartered in the U.S.
3.c. With banks and otherfinancialinstitutions
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.l. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.l. Bought calls
4.b.2. Written puts
Notes:
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. Foreign Currency Reserves for the latest week may be subject to revision. Foreign Currency
Reserves for the prior week are final.
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 SDR/dollar exchange rate for the reporting date. The entries for the latest week reflect any
necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. IMF data for the latest week m a y be
subject to revision. IMF data for the prior week are final.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
Page 1 o f 2
S-381: U.S. International Reserve Position
PRESS
HOQM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
April 30, 2003
JS-381
U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets
totaled $80,114 million as of the end of that week, compared to $79,889 million as of the end of the prior week.
I. Official U.S. Reserve Assets (in US millions)
TOTAL
April 18.2003
April 25, 2003
79,889
80,114
1. Foreign Currency Reserves 1
Euro
Yen
TOTAL
Euro
Yen
TOTAL
a. Securities
7,147
13,139
20,286
7,267
13,081
20,348
Of which, issuer headquartered in the U.S.
0
0
b. Total deposits with:
b.i. Other central banks and BIS
11,715
2,638
14,353
11,890
2,626
14,516
b.ii. Banks headquartered in the U.S.
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
b.iii. Of which, banks located in the U.S.
0
0
22,838
21,838
11,309
11,369
11,043
11,043
0
0
2. IMF Reserve Position
2
3. Special Drawing Rights (SDRs) 2
4. Gold Stock
3
5. Other Reserve Assets
II. Predetermined Short-Term Drains on Foreign Currency Assets
ApriM8, 2003
Euro
Yen
1. Foreign currency loans and securities
April 25, 2003
TOTAL
Euro
Yen
0
TOTAL
0
2. Aggregate short and long positions in forwards and futures in foreign currencies vis-a-vis the U.S. dollar:
2.a. Short positions
0
0
2.b. Long positions
0
0
3. Other
0
0
III. Contingent Short-Term Net Drains on Foreign Currency Assets
April 18, 2003
tittp://www.treas. eov/oress/releases/j s3 81 .htm
April 25, 2003
7/21/2003
^a2e 2
S-381: U.S. International Reserve Position
Euro
Yen
TOTAL
Euro
Yen
TOTAL
0
0
2. Foreign currency securities with e m b e d d e d
options
0
0
3. Undrawn, unconditional credit lines
0
0
0
0
1. Contingent liabilities in foreign currency
1.a. Collateral guarantees on debt due within 1
year
1.b. Other contingent liabilities
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
Notes:
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. Foreign Currency Reserves for the latest week m a y be subject to revision. Foreign Currency
Reserves for the prior week are final.
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 SDR/dollar exchange rate for the reporting date. The entries for the latest week reflect any
necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. IMF data for the latest week m a y be
subject to revision. IMF data for the prior week are final.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
tttp://www.treas.gov/press/releases/j s3 81 .htm
7/21/2003
Page 1 of2
S-382: U.S. International Reserve Position
PRE;
ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
April 23, 2003
JS-382
U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets
totaled $79,889 million as of the end of that week, compared to $79,379 million as of the end of the prior week.
1. Official U.S. Reserve Assets (in US millions)
TOTAL
April 11, 2003
April 18, 2003
79,379
79,889
1. Foreign Currency Reserves1
Euro
Yen
TOTAL
Euro
a. Securities
7,060
13,059
20,119
7,147
Of which, issuer headquartered in the U.S.
0
Yen
|| 13,139
TOTAL
20,286
0
|
b. Total deposits with:
b.i. Other central banks and BIS
11,568
2,622
14,190
b.ii. Banks headquartered in the U.S.
0
b.ii. Of which, banks located abroad
0
11,715
2,638
14,353
0
0
-
b.iii. Banks headquartered outside the U.S.
0
b.iii. Of which, banks located in the U.S.
0
0
22,718
21,838
11,309
11,369
11,043
11,043
0
0
2. IMF Reserve Position 2
3. Special Drawing Rights (SDRs)
4. Gold Stock
2
3
5. Other Reserve Assets
0
II. Predetermined Short-Term Drains on Foreign Currency Assets
April 11, 2003
Euro
Yen
1. Foreign currency loans and securities
April 18, 2003
TOTAL
Euro
Yen
0
TOTAL
0
2. Aggregate short and long positions in forwards and futures in foreign currencies vis-a-vis the U.S. dollar:
2. a. Short positions
0
0
2.b. Long positions
0
0
3. Other
0
0
ill. Contingent Short-Term Net Drains on Foreign Currency Assets
i
htty://www.tr M
s
cmv/nress/rel eases/j s3 82.htm
April 11, 2003
H
H
H
April 18,2003
II
II
1
7/21/2003
Page 2 o f 2
S-382: U.S. International Reserve Position
|
Euro
Yen
TOTAL
Euro
Yen
TOTAL
0
0
2. Foreign currency securities with e m b e d d e d
options
0
0
3. Undrawn, unconditional credit lines
0
0
0
0
1. Contingent liabilities in foreign currency
1 .a. Collateral guarantees on debt due within 1
year
1.b. Other contingent liabilities
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
Notes:
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. Foreign Currency Reserves for the latest week m a y be subject to revision. Foreign Currency
Reserves for the prior week are final.
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 SDR/dollar exchange rate for the reporting date. The entries for the latest week reflect any
necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. IMF data for the latest week m a y be
subject to revision. IMF data for the prior week are final.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
ittp://www.treas.gov/press/reJeases/j s3 82.htm
7/21/2003
JS-383: T R I P Director Jeffrey Bragg's Remarks on Terrorism Insurance
Page 1 ot 3
F R O M T H E OFFICE O F PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 15,2003
JS-383
Presentation of
Terrorism Risk Insurance Program
Executive Director Jeffrey Bragg
To the
National Council on Compensation Insurance's Annual Symposium
Orlando, Florida
(Slides are attached below)
Slide 1: Introduction
Slide 2:
Good morning and thank you for the opportunity to speak to you this morning on
Treasury's progress and plans for implementing the Terrorism Risk Insurance Act of
2002, otherwise referred to as TRIA.
On November 26, 2002, President Bush, in an effort to address the issues you see
on the screen before you, signed TRIA into law. The market for terrorism coverage
was severely disrupted after 9/11. In addition to wanting to address insurance
industry disruptions, the Congress and the President recognized that such
widespread dislocations in insurance markets also had a negative impact on
businesses' ability to finance economic activity and recovery.
Slide 3:
TRIA effectively places the federal government temporarily in the terrorism risk
reinsurance business:
• Providing coverage for commercial lines P & C losses, including workers'
compensation.
• Coverage is triggered when the Secretary of the Treasury, in consultation with the
Secretary of State and the Attorney General, certifies that an act of foreign terrorism
has occurred:
• Which loss is greater than $5 million dollars in the United States and the other
areas shown.
Slide 4:
Like any program there are restrictions.
• Deductibles increase over the three year term of the program and are expressed
as a percent of an insurer's direct earned premium.
• The federal governments share under the program is equal to 90% of that portion
of insured losses that exceed the insurer deductible.
http ://wwwJtreaia1£QxZrjress/releases/i s3 83 .htm
7/9Q/onm
JS-383: T R I P Director Jeffrey Bragg's Remarks on Terrorism Insurance
P a g e l 01.5
• While there is an annual cap on insured losses: if aggregate insured losses
exceed the cap, Congress will determine the procedures for and source of
payments for those excess losses.
• There are certain recoupment provisions and the program expires in 2005. (i.e.
Riot Reinsurance experience)
Slide 5:
The Terrorism Risk Insurance Program, or TRIP, is itself under the Treasury
Department's Office of Domestic Finance (headed by Under Secretary Peter
Fisher) and the Office of Financial Institutions (headed by Assistant Secretary
W a y n e Abernathy).
TRIP'S responsibilities include all of the operational functions necessary to
effectively implement and manage the program, including all claims management
and processing functions.
TRIP is in essence the insurance company created by the new law.
However, two additional Treasury offices play an important part in the program.
Treasury's Office of Economic Policy will be conducting certain studies to determine
if the program should be extended to other lines of insurance.
The Office of Financial Institutions Policy will take the lead in promulgating rules
and regulations.
TRIP will work closely with both offices as w e coordinate our activities.
Slide 6:
Already, substantial progress has been m a d e in implementing the program.
The Office of Financial Institutions Policy has been extremely active in
implementing the regulations necessary to support the n e w Act.
They have issued four interim guidance notices and two interim final rules.
This activity culminated last week in a final proposed rule, which is in its public
comment period as w e speak.
Among other things these proposed rules address:
• Disclosure to policy holder requirements
• A n interpretation of the "make available" provisions
• Guidance on the Lines of Insurance covered under the act
• Which entities are eligible for participation
• Timing of disclosures
• Compliance certification
The NCCI has been very helpful in representing your views to the Treasury
Department on these and other issues. However, I urge all of you to review these
proposed regulations and to comment on them directly or through your
Association. W e need your valuable council in implementing this program.
Slide 7:
htto ://www.treas.gov/press/releases/i s3 83 .htm
7/9Q/onm
JS-383: TRIP Director Jeffrey Bragg's Remarks on Terrorism Insurance
Page 3 0 1 3
Even though much has been accomplished, considerable work remains. Program
issues remain and many in our industry have expressed concern over such issues
as:
• Adverse selection
• Spotty state regulation (spotty state regulation has been around since Moses w a s
a baby)
• Continued Lack of reinsurance availability
• Huge exposures particularly in worker's compensation coverage
In fact, most of these issues have been volatile at various times in the past. And
TRIA w a s passed in part to address them. I believe that over time, the free market
will help solve these problems while TRIA contributes to help build capacity and
stabilize the market.
Right now, what keeps m e awake at night are operational issues.
W e need to accomplish all of the things you see before you, and more, in a very
short period of time.
Throughout my career, both in the private sector (with PMSC, IMSG and REM) and
with m y government service, I have been a strong advocate of outsourcing
functions that can best be handled by others with more experience and expertise.
I have also where possible created partnerships between the government and
private sector, which draws on the strengths of both entities to create a more
successful program.
Therefore it should come as no surprise that in implementing this program, we will
not be creating a huge infrastructure.
Rather, we will establish a virtual company that permits us to form new partnerships
with the private insurance sector, harnessing the insurance industry's talents and
skills to make this an effective, streamlined operation.
Once again, I look forward to working with you on this new venture and in closing,
thank you for future support and your time today.
Related Documents:
• Slides
http://www treas. $?ov/nress/releases/js383 .htm
7/29/2003
Terrorism Risk Insurance Program
Jeffrey S. Bragg
Executive Director
Terrorism Risk Insurance Program Office
5/15/2003
%
Terrorism Risk Insurance Program
Purpose
• Address Insurance Market Disruptions
• Ensure Availability Affordability Commercial P & C
Terrorism Coverage
• Provide Transition Period
• Stabilize Private Market
• Build Capacity in Private Market
5/15/2003
2
Terrorism Risk Insurance Program
Summary of Program
SECRETARY OF
TREASURY
SECRETARY
OF STATE
5/15/2003
ATTORNEY
GENERAL
Certifies Act of Foreign Terrorism
Resulting in Damage >$5M
IN
United States
U.S. Missions
U.S. Air Carriers
U.S. Vessels
FOR
Commercial Lines P & C
Workers Compensation
Terrorism Risk Insurance Program
Restrictions
Temporary Program
Expires 2005
Company Deductible
2003 7% DEP
+ 1 0 % Insured Loss
2004 10% DEP
2005 15% DEP
$100 Billion Annual Cap on Insured Losses
Recoupment Provisions
5/15/2003
4
Terrorism Risk Insurance Program
Treasury Offices
T.R.I.P.
O.E.P
Group Life
Studies individual Life
Personal Lines
2005 make available extension
5/15/2003
Implementation
Program M a n a g e m e n t
Program Operations
Claims M a n a g e m e n t /Processing
Financial/Operational Efficiency
F.I.P. Interim
Rules
Program
Regulations
5
Terrorism Risk Insurance Program
Progress to Date
• 4 Interim Guidance Notices
• 2 Interim Final Rules
• Proposed Rule
• State Residual Markets
• State Worker's C o m p Funds
• Hire Executive Director
5/15/2003
6
Terrorism Risk Insurance Program
The Future
Recruit/Hire TRIP Staff
Establish/Implement Claims Procedures
Establish Audit /Enforcement Procedures
Policy Surcharge Recoupment Procedures
Final Rules
Establish "Virtual" C o m p a n y
5/15/2003
7
JS-384: Treasury Secretary John S n o w Statement on Senate Passage of the Jobs & Growt... Page 1 ot 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 15, 2003
JS-384
Treasury Secretary John Snow Statement on Senate Passage of the Jobs &
Growth Package
Tonight, with Senate passage of a bipartisan Jobs & Growth Package, we are one
step closer to giving the economy the boost it needs to grow so that millions of
Americans can be more secure and confident, both now and in the future.
The Senate bill contains all the elements of the President's plan. American families
will benefit from speeding up the income tax rate reductions, increasing the child
credit, and providing marriage penalty relief. Small businesses will get help by
reducing tax rates on owners and entrepreneurs, and by dramatically increasing the
amount they can deduct when buying new equipment. This will create and secure
jobs.
I applaud the Senate for taking the bold step of eliminating the unfair double tax on
dividends. Enactment of this proposal will have a profoundly positive effect on job
creation, corporate governance, and the well being of all Americans. It removes a
barrier to higher economic growth; it is an investment in the American people and
their prosperity.
Americans are anxiously awaiting the outcome. I urge Congress to quickly get the
most robust possible jobs and growth package to the President's desk.
http ://www.treas. eov/nress/releases/j s3 84.htm
7/29/2003
reau of the Public Debt: Treasury's Inflation-Indexed Securities Reference CPI Numbers and Daily In... Page 1 of 1
PUBLIC DEBT NEWS f(&)'
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20L'39
FOR IMMEDIATE RELEASE
May 16, 2003
^&Tic'v'i^y
Contact: Office of Financing
(202) 691-3550
TREASURY'S INFLATION-INDEXED SECURITIES
JUNE 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 June for the following
Treasury inflation-indexed securities:
(1) 3-3/8% 10-year notes due January 15, 2007
(2) 3-5/8% 10-year notes due January 15, 2008
(3) 3-5/8% 30-year bonds due April 15, 2028
(4) 3.-7/8% 10-year notes due January 15, 200 9
(5) 3-7/8% 3 0-year bonds due April 15, 2 02 9
(6) 4-1/4% 10-year notes due January 15, 2010
(7) 3-1/2% 10-year notes due January 15, 2011
(8) 3-3/8% 30-1/2-year bonds due April 15, 2032
(9) 3-3/8% 10-year notes due January 15, 2012
(10) 3 % 10-year notes due Ju1y 15, 2012
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 threemonth period.
The information for July is expected to be
released on June 17, 2003.
oOo
fune Reference CPI Numbers and Daily Index Ratios Table PDF format (file size-16KB, uploaded-05/16/03)
Intellectual Property | Privacy & Security Notices | Terms & Conditions | Accessibility | Data Quality
U.S. Department of the Treasury, Bureau of the Public Debt
Last Updated January 12, 2005
3 S 3 85
ittp://www.public4ebt.treas.gov/of/ofcDi062003Dr.htm
5/10/2005
Bureau of the Public Debt: 3-3/8% T R E A S U R Y 10-YEAR INFLATION-INDEXED N O T E S
Page 1 of2
3-3/8% TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due January 15, 2007
Ref CPI and Index Ratios for June 2003
: Office of Financing
202--691-3550
DESCRIPTION :
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH: OF:
NUMBER OF DAYS IN MONTH :
Series A -2007
9128272M3
January 15, 1997
February 6, 1997
April 15 , 1997
January 15, 2007
158.,43548
June 2003
30
CPI-U (NSA) Feb ruary 2003
CPI-U (NSA) Mar ch 2003
CPI-U (NSA) April 2003
183.,1
184. 2
183. 8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184,.13333
184,.12000
184,.10667
184,.09333
184,.08000
184,.06667
184,.05333
184,.04000
184,.02667
184..01333
184..00000
183.,98667
183.,97333
183..96000
183.,94667
183.,93333
183.,92000
183.,90667
183. 89333
183.,88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
htro://www.pjjyiiiiiihtitre«g^ov/of/ofl 0a062003 .htm
I:ndex Ratio
1.16262
1.16253
1.16245
1.16237
1.16228
1.16220
1.16211
1.16203
1.16195
1.16186
1.16178
1.16169
1.16161
1.16152
1.16144
1.16136
1.16127
1.16119
1.16110
1.16102
1.16094
1.16085
1.16077
1.16068
1.16060
1.16051
1.16043
1.16035
1.16026
1.16018
5/10/2005
Bureau of the Public Debt: 3-5/8% T R E A S U R Y 10-YEAR I N F L A T I O N - I N D E X E D N O T E S
Page 1 of2
3-5/8% TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due January 15, 2008
Ref CPI and Index Ratios for June 2003
: Office of Financing
202- -691-3550
DESCRIPTION
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH OF:
NUMBER OF DAYS IN MONTH
Series A-2008
9128273T7
January 15, 1998
January 15, 1998
October 15, 1998
January 15, 2008
161. ,55484
June 2003
30
CPI-U (NSA) Feb ruary 2003
CPI-U (NSA) Mar ch 2003
CPI-U (NSA) April 2003
183. 1
184. 2
183. 8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184 .12000
184,.10667
184,.09333
184,.08000
184,.06667
184,.05333
184,.04000
184. .02667
184. ,01333
184. ,00000
183. ,98667
183. ,97333
183. ,96000
183. ,94667
183. ,93333
183. ,92000
183. ,90667
183. ,89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
tittD://www.p*ifelicdgbtrlreaafRov/of/ofl 0b062003 .htm
Iindex Ratio
1.14017
1.14009
1.14001
1.13992
1.13984
1.13976
1.13967
1.13959
1.13951
1.13943
1.13934
1.13926
1.13918
1.13910
1.13901
1.13893
1.13885
1.13877
1.13868
1.13860
1.13852
1.13844
1.13835
1.13827
1.13819
1.13811
1.13802
1.13794
1.13786
1.13778
5/10/2005
Bureau of the Public Debt: 3-5/8% T R E A S U R Y 30-YEAR INFLATION-INDEXED B O N D S
Page 1 of2
3-5/8% TREASURY 30-YEAR INFLATION-INDEXED BONDS
Due April 15, 2028
Ref CPI and Index Ratios for June 2003
Office of Financing
202--691-:3550
DESCRIPTION :
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH OF:
NUMBER OF DAYS IN MONTH
Bonds of April 202
912810FD5
April 15, 1998
April 15, 1998
July ;L5, 1998
April 15, 2028
161.74000
June 2003
30
CPI-U (NSA) Feb ruary 2003
CPI-U (NSA) Mar ch 2003
CPI-U (NSA) April 2003
183.1
184.2
183.8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184,.17333
184,.16000
184,.14667
184,.13333
184,.12000
184,.10667
184,.09333
184,.08000
184,.06667
184,.05333
184,.04000
184..02667
184,.01333
184,.00000
183,.98667
183..97333
183.,96000
183.,94667
183.,93333
183..92000
183..90667
183.,89333
183.,88000
183.,86667
183..85333
183.,84000
183.,82667
183.,81333
'www.Dubl in4#bk^sS£fftQv/of/of30a062003 .htm
Index Ratio
1.13886
1.13878
1.13870
1.13862
1.13854
1.13845
1.13837
1.13829
1.13821
1.13812
1.13804
1.13796
1.13788
1.13779
1.13771
1.13763
1.13755
1.13746
1.13738
1.13730
1.13722
1.13713
1.13705
1.13697
1.13689
1.13680
1.13672
1.13664
1.13656
1.13647
5/10/2005
3ureau of the Public Debt: 3-7/8% T R E A S U R Y 10-YEAR INFLATION-INDEXED N O T E S
Page 1 of2
3-7/8% TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due January 15, 2009
Ref CPI and Index Ratios for June 2003
: Office of Financing
202 -691-3550
DESCRIPTION :
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH: OF:
NUMBER OF DAYS IN MONTH :
Series .A-2009
9128274Y5
January 15, 1999
January 15, 1999
July 15 , 1999
January 15, 2009
164.00000
June 2003
30
CPI-U (NSA) Feb•ruary 2003
CPI-U (NSA) Mar ch 2003
CPI-U (NSA) April 2003
183.1
184.2
183.8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184 .12000
184,.10667
184,.09333
184,.08000
184,.06667
184,.05333
184,.04000
184,.02667
184,.01333
184..00000
183.,98667
183.,97333
183.,96000
183.,94667
183.,93333
183.,92000
183.,90667
183. 89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
itto://www.DukJ##dekfcif£aSxSOv/of/ofl 0c0620fH htm
Index Ratio
1.12317
1.12309
1.12301
1.12293
1.12285
1.12276
1.12268
1.12260
1.12252
1.12244
1.12236
1.12228
1.12220
1.12211
1.12203
1.12195
1.12187
1.12179
1.12171
1.12163
1.12154
1.12146
1.12138
1.12130
1.12122
1.12114
1.12106
1.12098
1.12089
1.12081
5/10/2005
Bureau of the Public Debt: 3-7/8% T R E A S U R Y 30-YEAR I N F L A T I O N - I N D E X E D B O N D S
Page 1 of2
3-7/8% TREASURY 30-YEAR INFLATION-INDEXED BONDS
Due April 15, 2029
Ref CPI and Index Ratios for June 2003
Contact: Office of Financing
202-691-3550
DESCR]IPTION
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH OF:
NUMBER OF DAYS IN MONTH
Bonds of April 202
912810FH6
April 15, 1999
April 15, 1999
October 15, 1999
October 15, 2000
April 15, 2029
164.,39333
June 2003
30
CPI-U (NSA) Feb ruary 2003
CPI-U (NSA) March 2003
CPI-U (NSA) April 2003
183. 1
184. 2
183. 8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184,.14667
184,.13333
184,.12000
184,.10667
184,.09333
184,.08000
184,.06667
184..05333
184,.04000
184..02667
184.,01333
184.,00000
183.,98667
183.,97333
183.,96000
183.,94667
183.,93333
183.,92000
183. 90667
183. 89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
ittD://www.nubii»4sfet.tr«aS:SQv/of/of30b062003 htm
Index Ratio
1.12048
1.12040
1.12032
1.12024
1.12016
1.12008
1.12000
1.11992
1.11983
1.11975
1.11967
1.11959
1.11951
1.11943
1.11935
1.11927
1.11919
1.11910
1.11902
1.11894
1.11886
1.11878
1.11870
1.11862
1.11854
1.11846
1.11837
1.11829
1.11821
1.11813
5/10/2005
Bureau of the Public Debt: 4-1/4% T R E A S U R Y 10-YEAR I N F L A T I O N - I N D E X E D N O T E S
Page 1 of2
4-1/4% TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due January 15, 2010
Ref C P I and Index Ratios for June 2003
: Office of Financing
DESCRIPTION
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH[ OF:
NUMBER OF DAYS IN MONTHr •
Series A-2010
9128275W8
January 15, 2000
January 18, 2000
July 17 , 2000
January 15, 2010
168.24516
June 2003
30
CPI-U (NSA) Febiruary 2003
CPI-U (NSA) March 2003
CPI-U (NSA) April 2003
183.1
184.2
183.8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
ttD://www.Di
202- -691-3550
Cal enda r Day
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
Year
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
rfsov/of/ofl0d0620m htr
Ref CPI
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184 .12000
184 .10667
184,.09333
184,.08000
184,.06667
184,.05333
184,.04000
184,,02667
184.,01333
184.,00000
183.,98667
183.,97333
183.,96000
183. 94667
183. 93333
183. 92000
183. 90667
183. 89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
I:ndex Ratio
1-09483
1.09475
1.09467
1.09459
1.09451
1.09443
1.09436
1.09428
1.09420
1.09412
1.09404
1.09396
1.09388
1.09380
1.09372
1.09364
1.09356
1.09348
1.09340
1.09333
1.09325
1.09317
1.09309
1.09301
1.09293
1.09285
1.09277
1.09269
1.09261
1.09253
5/10/2005
Bureau of the Public Debt: 3-1/2% T R E A S U R Y 10-YEAR I N F L A T I O N - I N D E X E D N O T E S
Page 1 of2
3-1/2% TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due January 15, 2011
Ref CPI and Index Ratios for June 2003
: Office of Financing
202--691-3550
DESCRIPTION
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH: OF:
NUMBER OF DAYS IN MONTH
Series A-2011
9128276R8
Janelary 15, 2001
Janelary 16, 2001
Jul^' 16, 2001
Janelary 15, 2011
174. 04516
June; 2003
30
CPI-U (NSA) Feb ruary 2003
CPI-U (NSA) March 2003
CPI-U (NSA) April 2003
183. 1
184. 2
183. 8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184 .12000
184,.10667
184,.09333
184,.08000
184,.06667
184,.05333
184..04000
184.,02667
184..01333
184.,00000
183.,98667
183.,97333
183.,96000
183.,94667
183. 93333
183. 92000
183. 90667
183. 89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
httD://www.nubliedebt:freas.eov/of/ofl0e062003 htm
Iindex Ratio
1.05835
1.05827
1.05819
1.05812
1.05804
1.05796
1.05789
1.05781
1.05773
1.05766
1.05758
1.05750
1.05743
1.05735
1.05727
1.05720
1.05712
1.05704
1.05697
1.05689
1.05681
1.05674
1.05666
1.05658
1.05651
1.05643
1.05635
1.05628
1.05620
1.05612
5/10/2005
Bureau of the Public Debt: 3-3/8% T R E A S U R Y 30-1/2-YEAR INFLATION-INDEXED B O N D S
Page 1 of2
3-3/8% TREASURY 30-1/2-YEAR INFLATION-INDEXED BONDS
Due April 15, 2032
Ref CPI and Index Ratios for June 2003
Contact: Office of Financing
202-691-3550
DESCR]:PTION
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH[ OF:
NUMBER OF DAYS IN MONTH[ :
April 15, 2032
177,,50000
June 2003
30
CPI-U (NSA) Feb>ruary 2003
CPI-U (NSA) Mar ch 2003
CPI-U (NSA) April 2003
183.,1
184. 2
183..8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Bonds of April 2032
912810FQ6
Octob*3r 15, 2001
October 15, 2001
Year
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
httD://www.DuW*tisfetr#©a6:g9y/of/of30c062003 htm
Ref CPI
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184 .12000
184 .10667
184 .09333
184 .08000
184 .06667
184,.05333
184,.04000
184,.02667
184,.01333
184.,00000
183.,98667
183.,97333
183.,96000
183.,94667
183.,93333
183. 92000
183. 90667
183. 89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
Index Ratio
1.03775
1.03767
1.03760
1.03752
1.03745
1.03737
1.03730
1.03722
1.03715
1.03707
1.03700
1.03692
1.03685
1.03677
1.03669
1.03662
1.03654
1.03647
1.03639
1.03632
1.03624
1.03617
1.03609
1.03602
1.03594
1.03587
1.03579
1.03572
1.03564
1.03557
5/10/2005
bureau of the Public Debt: 3-3/8% T R E A S U R Y 10-YEAR INFLATION-INDEXED N O T E S
Page 1 of2
3-3/8% TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due January 15, 2012
Ref CPI and Index Ratios for June 2003
Contact: Office of Financing
202-691-3550
DESCRIPTION :
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH OF:
NUMBER OF DAYS IN MONTH :
Janelary 15, 2012
177. 56452
June; 2003
30
CPI-U (NSA) Feb ruary 2003
CPI-U (NSA) Mar ch 2003
CPI-U (NSA) April 2003
183. 1
184. 2
183. 8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Calenda r Day
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
Series .A-2012
9128277J5
Janelary 15, 2002
Janelary 15, 2002
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184,.12000
184,.10667
184,.09333
184,.08000
184,.06667
184,.05333
184,.04000
184,.02667
184..01333
184..00000
183,,98667
183.,97333
183.,96000
183.,94667
183.,93333
183.,92000
183.,90667
183.,89333
183.,88000
183.,86667
183.,85333
183.,84000
183.,82667
183.,81333
httn.7/\vww.nul4*airiifatmaffiT8>y/of/ofl 0fl)62001 h t m
Iiadex Ratio
1.03737
1.03729
1.03722
1.03714
1.03707
1.03699
1.03692
1.03684
1.03677
1.03669
1.03662
1.03654
1.03647
1.03639
1.03632
1.03624
1.03617
1.03609
1.03602
1.03594
1.03587
1.03579
1.03572
1.03564
1.03557
1.03549
1.03542
1.03534
1.03527
1.03519
5/10/2005
Bureau of the Public Debt: 3 % T R E A S U R Y 10-YEAR INFLATION-INDEXED N O T E S
Page 1 of2
3 % TREASURY 10-YEAR INFLATION-INDEXED NOTES
Due July 15, 2012
Ref CPI and Index Ratios for June 2003
Contact : Office of Financing
202--691- 3550
DESCRIPTION
CUSIP NUMBER:
DATED DATE:
ORIGINAL ISSUE DATE:
ADDITIONAL ISSUE DATE:
MATURITY DATE:
Ref CPI on DATED DATE:
TABLE FOR MONTH: OF:
NUMBER OF DAYS IN MONTH
Series C-2012
912828AF7
July 15 , 2002
July 15 , 2002
October 15, 2002
January 15, 2003
July 15 , 2012
179.80000
June 2003
30
CPI-U (NSA) Feb'ruary 2003
CPI-U (NSA) March 2003
CPI-U (NSA) April 2003
183.1
184.2
183.8
Month
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
June
Cal enda r Day
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
Year
Ref CPI
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
184 .20000
184 .18667
184 .17333
184 .16000
184 .14667
184 .13333
184 .12000
184 .10667
184 .09333
184 .08000
184,.06667
184,.05333
184,.04000
184,.02667
184,.01333
184,,00000
183,.98667
183.,97333
183.,96000
183.,94667
183.,93333
183.,92000
183.,90667
183. 89333
183. 88000
183. 86667
183. 85333
183. 84000
183. 82667
183. 81333
httD://www.Dubikd^fefe^«98re»y/of/ofl0g062003 htm
Index Ratio
1.02447
1.02440
1.02432
1.02425
1.02418
1.02410
1.02403
1.02395
1.02388
1.02380
1.02373
1.02366
1.02358
1.02351
1.02343
1.02336
1.02329
1.02321
1.02314
1.02306
1.02299
1.02291
1.02284
1.02277
1.02269
1.02262
1.02254
1.02247
1.02240
1.02232
5/10/2005
JS-386: Letter by Treasury Secretary S n o w regarding the debt ceiling
Page 1 of 1
PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 19, 2003
JS-386
Letter by Treasury Secretary Snow regarding the debt ceiling
Debt Ceiling
Related Documents:
• Letter by Treasury Secretary Snovy_regarding the debt ceiljng
DEPARTMENT OF THE; TREASURY
W A S H I N G T O N , n.Cft o : "I IF T 5 F 4 ? ,B»
May 10. 2003
Tl 10 ISonorub 1 c .1. Denuis Haslcrl
S pc i ik e r o f1 h c House
U.S. 1 louse ol'Rc-jJ recent el ices
Washineion. D O 2>b':5
Henr .Mr. Speaker:
] ^i11 nohfyin? \ou. :i.s rcv|iiiretl under S U.S.C. jj S?.-\-6 ('.)['-•). d:at il is my determination
dial by reason of the stal;:lov\ debl lii'iiil I -.sill coniinuc lo be unable :o n:\cst III IK- Lhe ponion of
the Civil Service lie:irornen: nnol Disability Ihinu (CSRDI-) uoi :;':n:ec:.i:ih:'y reauhed :o p:-.y
beneficiaries.. For _:JLII:K"J&»:S of the C S R . D F statute.! have determined ll::il a "debt issa:mcc.'
suspension period"', previously determined to last until T.iiy I ls ?0<o : VMI' asm until D c c e m b o ]'/, JiJD.v fherefote. duinig lhi> debt issuance suspension period the Treasury Department v. ill
continue lo suspend additional Investments of amount:* credited lo the C S R D F and ivtieerr cm
f»dc.:iio:::il por:io:i of rie uivcsi'r.ciiis held by the CSRDF, as a..ih; :i/ed by law. B e n e lie lyrics
will be fully prolec:cu cird will s'jITcr r.o :ui\t:rse consequents, 'i be O S R D b >1a:me rcuu.-Ch
dial the Treusuiy restore all due inccres: and principal to ihe CSR_-J)F as soen as this can be done
wltiiiM.l c\ced:u:> ll:e pubhe deb: limil.
Tlrs UC'.IO" IS necessary because I he Unilcd S-ales Sanale bas \ei In lake up legislation to
.ncreasc ihe public debt l::r.il. "ihe Treasury hiees ;xiym-e::l oblidalior.s m laic M a y liuil cannol
bo met vvitbou: an increase in the statutory cieb; limit. Dirin^ tbe a':cv half of M a y and ibrc-u^-i
thefirs:w e e k of June, projected incoming receipts will be insufficient to cover govcrnmen:
expenditures. Such expciuikires. Include individual and I.UIS:")L>ST:..\ refunds of approximate".y
$/. I billio". p:iymc"ils of over $5 billion lo ae:i\e «n'd retired inil'.ary personnel, paynicuis of
over S12 billion lo defense vendors, and Social Security and Med;:aie benellis of over S-KJ
billon.
This "Inal ae:icv; by die Treasury will provide room .inder ibe deb: ceiling ;.nti* or or
about M a y 28. 2iJi).V T b e Treasui> has no v. -lakci: all pruden: aik. legd steps, to avoid roL.ching
the statinory debt limit, inducing reducing f-.c si/e of our reyulai bill auctions Liid drawing duwn
available cash. A n immediate pcniiurieni mcrci^c in die <:c:>t limi" id crucial :o preserve i\yj
confidence in [he I S Government and to pi LA e m uncertainly lb:-.l A O U M adversely ulTeei o u
ee<v)i!iivli: recovery. I lhc:"cf»n'e, slrms'.ly uriy: '.be Senale '.o inmiciliale-ly pass ll.e dob I !ii::i
increase thai lias already been Iraiisnniled by the House.
Si::cerely.
.IOIIJI Vv. Snou
0~^~
OFFICE OF PUBLIC AFFAIRS • 1500 PGNNSVT.VAN'I \ AN I'M I., N.W, • W A S H I N G ! l)V D.< • 2022(1 • (21)2: <i2 2-2<>Ml
FOR IMMEDIATE RELEASE
May 19, 2003
CONTACT: Office of Financing
202/691-3550
TREASURY OFFERS CASH MANAGEMENT BILLS
The Treasury will auction approximately $4,000 million of 6-day
Treasury cash management bills to be issued May 21, 2003.
Tenders for Treasury cash management bills to be held on the book-entry
records of Treasury-Direct will not be accepted.
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 $100 million
per account and will be accepted in the order of smallest to largest, up
to the aggregate award limit of $1,000 million.
Note: The closing times for receipt of noncompetitive and competitive
tenders will be at 11:00 a.m. and 11:30 a.m. eastern daylight saving time,
respectively.
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%.
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.
oOo
Attachment
J5 -3*7
HIGHLIGHTS OF TREASURY OFFERING
OF 6-DAY CASH MANAGEMENT BILLS
May 19, 2003
Offering Amount $ 4,000 million
Maximum Award (35% of Offering Amount) . . $ 1,400 million
Maximum Recognized Bid at a Single Rate . $ 1,400 million
NLP Reporting Threshold
$ 1,400 million
Description of Offering:
Term and type of security
6-day Cash Management Bill
CUSIP number
912795 NA 5
Auction date
May 20, 2003
Issue date
May 21, 2003
Maturity date
May 27, 2003
Original issue date
May 21, 2003
Currently outstanding
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 $100
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 (NLP) for each bidder must be reported when the sum of the
total bid amount, at all discount rates, and the net long position equals or
exceeds the NLP reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the
closing time for receipt of competitive tenders.
Receipt of Tenders:
Noncompetitive tenders:
Prior to 11:00 a.m. eastern daylight saving time on auction day
Competitive tenders:
Prior to 11:30 a.m. eastern daylight saving time on auction day
Payment Terms: By charge to a funds account at a Federal Reserve Bank on issue
date.
FOR IMMEDIATE RELEASE
May 19, 2003
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK, 13-WEEK, AND 26-WEEK BILLS
The Treasury will auction three series of Treasury bills totaling $54,000
million to refund an estimated $44,296 million of publicly held Treasury bills
maturing May 22, 2003, and to raise new cash of approximately $9,704 million.
The announcement of the 13-week and 26-week offerings, originally scheduled for
May 15, 2003, was postponed on that date.
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 $15,283 million of the Treasury bills maturing
on May 22, 2003, in the System Open Market Account (SOMA). This amount may be
refunded at the highest discount rate of accepted competitive tenders in these
auctions. 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 $100 million per account and will be accepted
in the order of smallest to largest, up to the aggregate award limit of $1,000
million.
Please note that the auctions of the 13-week and 26-week bills will be held on
Tuesday, May 20, 2003, and the auction of the 4-week bills will be held on Wednesday,
May 21, 2003.
TreasuryDirect customers have requested that we reinvest their maturing holdings
of approximately $1,058 million into the 13-week bill and $762 million into the 26week 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.
oOo
JS-3%*
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED MAY 22, 2003
May 19, 2003
Offering Amount
Maximum Award (35% of Offering Amount)
Maximum Recognized Bid at a Single Rate
NLP Reporting Threshold
NLP Exclusion Amount
Description of Offering:
Term and type of security
CUSIP number
Auction date
Issue date
Maturity date
Original issue date
Currently outstanding
Minimum bid amount and multiples
$22,000
$ 7,700
$ 7,700
$ 7,700
$11,400
million
million
million
million
million
28-day bill
912795 MS 7
May 21, 2003
May 22, 2003
j u n e 19, 2003
December 19, 2002
$43,455 million
$1,000
$16,000
$ 5,600
$ 5,600
$ 5,600
$ 5,300
million
million
million
million
million
91-day bill
912795 NJ 6
May 20, 2003
May 22, 2003
August 21, 2003
February 20, 2003
$21,672 million
$1,000
$16,000
$ 5,600
$ 5,600
$ 5,600
None
million
million
million
million
182-day bill
912795 NX 5
May 20, 2003
May 22, 2003
November 20, 2003
May 22, 2003
$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 $100
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 (NLP) for each bidder must be reported when the sum of the total bid amount, at all
discount rates, and the net long position equals or exceeds the NLP reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of
competitive tenders.
Receipt of Tenders:
4-week bill:
Noncompetitive tenders. Prior to 12:00 noon eastern daylight saving time on May 21, 2003
Competitive tenders.... Prior to 1:00 p.m. eastern daylight saving time on May 21, 2003
13-week and 26-week bills:
Noncompetitive tenders. Prior to 12:00 noon eastern daylight saving time on May 20, 2003
Competitive tenders.... Prior to 1:00 p.m. eastern daylight saving time on May 20, 2003
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.
JS-389: U.S. Treasury Secretary John W . S n o w Remarks to the Hispanic Business Round... Page 1 of 2
PRESS ROOM
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 19, 2003
JS-389
U.S. Treasury Secretary John W. Snow
Remarks to the Hispanic Business Roundtable
May 19,2003
Loy Henderson Auditorium, U.S. State Dept.
Good morning. It is a pleasure to address the State Department's first Hispanic
Business Roundtable, and to join Secretaries Powell and Evans, Ambassador
Zoellick, S B A Administrator Baretto and Judge Gonzales for this historic event. It is
even more exciting to see so many prominent business leaders in the room - so
many engaged in realizing the economic potential of the United States, and our
neighbors in Latin America.
Last month, I made one of my first international trips as Treasury Secretary to three
Latin American nations: Brazil, Ecuador and Colombia. I went to emphasize the
importance of the region to American economic interests, and to say that w e are
making trade, growth and stability in Latin America one of our top priorities. It is
clear to m e that Brazilian and Ecuadorian leaders are on the right track, and
Colombia, which has struggled with security issues, has leadership committed to
making progress on economic development.
In each of these countries, and in other Latin American nations whose leaders I've
met, it seems there is an understanding that the private sector, especially small
business, must serve as the engine of economic growth and job creation, while the
government's role is to promote a stable, investment-oriented policy environment.
That's a wonderful development, and w e are looking to build on that understanding
with major free trade pacts that will encourage economic cooperation and
international investment.
That is also the understanding we have here in the United States, and it is
embodied in the President's Jobs & Growth plan, which I a m pleased to say has
significantly cleared both the House and Senate, and is now headed for
negotiations between the two houses.
The plan will help all of the business leaders in this room to invest in this country,
create new jobs, and through that growth expand trade with our Spanish speaking
neighbors.
Consider a few of the major components. The elimination of the double taxation of
dividends, passed in the Senate, will reduce the cost of capital in our economy,
allowing businesses like yours to invest more easily in expansion and hiring. Stock
values are likely to rise, as a result of the higher tax-effective return on equity, and
those stock values will stimulate investment and consumer demand through the
wealth effect.
Another part of the plan, the immediate reduction in marginal income tax rates, will
put more money in the hands of consumers - every taxpaying American - right
away, boosting your sales. Just as valuable, those reduced marginal rates apply
directly to the incomes of the small businesses which w e know drive so much of our
economic activity. Lower marginal income tax rates, passed in both the House and
Senate, will free up money for new jobs and equipment in those small businesses.
http://^w¥fftpe«S:go>fp¥Qss/releases/js389.htm
4/25/2005
JS-389: U.S. Treasury Secretary John W . S n o w Remarks to the Hispanic Business Round... Page 2 of 2
Another outstanding element of the President's plan for small business is the
increased expensing of n e w business equipment. In the House and Senate plans,
that amount has been raised to $100,000 of n e w equipment annually. That's a real
incentive to accelerate investment plans and m a k e n e w jobs for every business,
and it will especially help equipment and technology manufacturers.
We are certainly eager to see the final law come out of committee and onto the
President's desk as soon as possible, with all the President's key initiatives in
force. The sooner he can sign the bill, the sooner America's families and
entrepreneurs can begin to take advantage of the enhanced incentives for growth it
provides.
Hispanic-American business leaders, such as those in this room today, represent a
strong entrepreneurial culture in the American economy, and you stand to benefit
from the President's plan. You also represent a strong voice in favor of the
President's plan, and w e thank you for that. Keep up the good work, and let your
legislators know h o w you feel.
While your companies do business with all Americans, of every background, it is
interesting to note that America's Spanish-speaking population represents the fifthlargest such population in the world. Clearly, that c o m m o n culture is going to
strengthen our relations with our Latin American neighbors, and provides a natural
basis for our partnerships. I encourage all of you to look for opportunities for trade
and investment in Latin America, as well as here at home.
Just as this administrations policies are designed to make it easier to do business
within the United States, w e have a number of initiatives aimed at making it easier
for you to invest and trade abroad. The Free Trade Area of the Americas
agreement is a key initiative for strengthening business-to-business ties in our
hemisphere. Negotiations for that agreement are well underway, as I'm sure
Ambassador Zoellick will detail. Within the domain of free trade, Treasury is
focused on liberalization of trade in financial services, which is essential for
strengthening developing economies, and creating credit for growth.
I also want to applaud two of my favorite Hispanic-American government leaders,
Rosario Marin, the Treasurer of the United States, and Jose Fourquet, Executive
Director of the Inter-American Development Bank. They are two of our most
valuable players at Treasury. Rosario's a great spokesperson for our department
and this administration, and I hope everyone here has a chance to meet her and
hear her story. Jose will be speaking to you later today, and I can't think of anyone
w h o has greater insight into the development challenges facing Latin America
today, or the way w e can work together to make progress.
This administration highly values our economic ties to Latin America, and we value
our ties to Latino business and community leaders in the United States. I a m
confident that with events like today's roundtable, w e can set our priorities for
investment and development together, and create the greatest gains for job
creation and prosperity throughout this country, and throughout our hemisphere.
Thank you.
http://,^fTW.tren3.rov/nress/releases/js389.htm
4/25/2005
JS-390: D A S T i m Bitsberger's Presentations to Fixed Income and Credit Risk S y m p o s i u m
Page 1 of 1
PRESS ROOM
FROM THE OFFICE OF PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 20, 2003
JS-390
DAS Tim Bitsberger's Presentations to Fixed Income and Credit Risk
Symposium
Treasury Debt Management
Related Documents:
• Presentation on Debt Management
• Presentation on Inflation-Indexed Securities
httD://www.trcaf;-ffO?/DPess/releases/is390.htm
4/25/2005
Treasury Debt Management
Timothy Bitsberger
Deputy Assistant Secretary
U.S. Treasury Department
C a s h balance volatility declines
$Bil
$Bil.
FY 2002
70
70
FY 2003
60
50
40
30
20
10
0
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Ju I
Aug
Sep
Treasury Daily Operating Cash Balance
Source: Daily Treasury Statement, data through January 29.
Department of the Treasury
Office of Market Finance
February 3, 2003-2
Average Absolute Federal Budget Forecast Errors
1997-2002
$ billions
180
$ billions
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
14 months
Office of Market Finance
Department of the Treasury
11 months
8 months
5 months
months until end of fiscal year
2 months
Source: Primary Dealer forecasts provided to Treasury at quarterly dealer interviews
O M B - U.S. Budget and Mid-Session Review
C B O - Budget Outlook and Update
FINANCING RESIDUALS GIVEN C U R R E N T ISSUANCE
$ billions
600
Deficits plus 1 St. Dev.
Deficit Forecasts (FY04 Budget)
300 200
-400
400
2003
2004
2005
2006
Fiscal Year
2007
2008
Borrowing Needs Uncertainty
Inflow or Outflow
=
Comment
Revenues
Day-to-day volatility adequate
predictability, quarterly filings less so
Expenditures
Good short-term predictability, poor
longer-term predictability
Data Volatility*
Headline Surplus or Deficit
Other M e a n s of Financing
Generally a small number
= Fiscal Needs
- Maturing Debt
Known
+ Non-Marketable Borrowing
S L G S issuance not well-modeled, other
factors not significant
= Marketable Financing
* Ideally, this column would show the volatility in prediction error, but the forecast of financing components are not currently decomposed.
Refinancing dominates new financing
—
1,000
— -200
-400
1961
'64
'67
70
73
76
79
'82
'85
'88
'91
'94
'97
'00
-400
'03
Quarterly Financial Obligations
Department of the Treasury
Office of Market Finance
February 3, 2003-9
Treasury Financing Requirements
($ Billions)
January - March 2003
(Projected)
(Actuals)
Net Marketable Issuance*
110
Bills
Nominal Notes
IIS
Bonds (20-yr)
111
April -June 2003
(Projected)
79
66
42
6
-3
Financinq
110
111
79
Deficit Funding **
Compensating Balances
Net Non-Marketable Financing
Change in Cash Balance
116
-3
8
143
14
-2
20
23
-18
-5
-32
33
25
33
13
13
45
Notes:
Starting Cash Balance
Ending Cash Balance
* Previously released coupon issuance pattern would raise $214 billion in FY03
** Includes budget results, direct loan activity, changes in accrued interest and checks outstanding and minor miscellaneous transactions.
Note: Totals m a y not add due to rounding
Department of the Treasury
Office of Market Finance
April 28, 2003
BILLS AS A PERCENTAGE OF MARKETABLE DEBT
AND DEFICIT AS A PERCENTAGE OF GDP1
Deficit/GDP
Bills/Debt
2%
29%
1%
27%
0%
25%
•1%
-2%
23%
-3%
21%
-4%
- 19%
-5%
Deficit/GDP
3-Yr/Monthly 5s/Reopen 10s
-6%
1985
17%
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
1/ The projected deficits as a percentage of GDP for 2003 to 2008 are from Administration's FY04 Budget.
Hypothetical auction sizes for the 3yr, 5yr, 10yr, and 10yr reopening are 18, 15, 16, and 10, respectively.
2007
AVERAGE MATURITY OF TOTAL OUTSTANDING MARKETABLE DEBT AND
1-YEAR MOVING AVERAGE OF CONSTANT ISSUANCE MEASURE1
Months
1980
Months
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
1/ The constant issuance measure is the ultimate average maturity achieved if nominal issuance in any given quarter is held constant goin
Maturity Distribution of Outstanding Debt
Percent of Total Marketable Debt Maturing
50%
T
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Fiscal Year
0-1 yr
•*—1-5
•5-10
•e—10-20
>20
2006
2008
50%
Distribution of Outstanding Debt by Security
as of December 31, 2002
Percent
30%
Percent
30%
25%
25%
20%
20%
15%
15%
10% -
10%
5%
5%
0%
0%
Bills
2YR
5YR
10YR
10YRiis
Security Type
Office of Market Finance
Department of the Treasury
20YR
30YR
30YR iis
Comparison of Realized 10-Year Borrowing Cost1/
Percent
16
1953
Percent
16
1957
1961
1
1-year
Office of Market Finance
Department of the Treasury
1965
2-year
1969
1973
3-year
1977
5-year
1981
1985
7-year
1989
1993
' 10-year
1997
2001
1994-2002 includes
forecasts of future rates
1/ Interest cost for a given term to maturity averaged over a rolling 10-year period,
using Treasury constant maturity yields.
Quarterly Shares of Treasury Issuance
Percent
Percent
100 i
T
100
90
- 90
60
60
50
-- 50
40
40
30
30
-- 20
10
1980Q1
1982Q1
1984Q1
1986Q1
•Bills
Office of Market Finance
Department of the Treasury
1988Q1
•2-4YR
1990Q1
1992Q1
•5-7YR
1994Q1
•10YR
1996Q1
1998Q1
Over 10 YR
2000Q1
2002Q1
Shares of Constant Issuance Maturity 1/
Rolling Twelve Month Averages
1980Q1
1982Q1
1984Q1
Office of Market Finance
Department of the Treasury
1986Q1
1988Q1
1990Q1
1992Q1
1994Q1
1996Q1
1998Q1
2000Q1
1/ Constant issuance maturity assumes the distribution of issuance in any
given quarter is held constant going forward.
2002Q1
High Debt Issuance Periods
LO
CN
CO
LO
CN
CN
00
CN
CN
00
CN
CJ>
CN
O)
o
o
CN
o
CD
CN
1^
CD
CN
CD
CN
CN
CD
CN
CN
CD
CN
Marginal Cost of, and Returns to, Issuance
1980Q1 1982Q1 1984Q1 1986Q1 1988Q1 1990Q1 1992Q1 1994Q1 1996Q1 1998Q1 2000Q1 2002Q1
Treasury Debt Management
Timothy Bitsberger
Deputy Assistant Secretary
U.S. Treasury Department
DAILY PRIMARY DEALER TRADING VOLUMES
3-MONTH MOVING AVERAGES
TIIS Volume
($billions)
Nominal Volume
(Sbillions)
350
300
250
200
150
100
Apr-98
Sep-98
Feb-99
Jul-99
Dec-99
May-00
Oct-00
Mar-01
Aug-01
Jan-02
Jun-02
Nov-02
TURNOVER RATIOS FOR NOMINAL AND INFLATION-INDEXED TREASURIES1
3-MONTH MOVING AVERAGES
TIIS
Volume/Outstanding
Nominal
Volume/Outstanding
18%
- 2.5%
16%
14%
2.0%
12%
1.5%
10%
8%
-- 1.0%
6%
4% A
Apr-98 Sep-98 Feb-99
0.5%
Jul-99
Dec-99 May-00 Oct-00 Mar-01 Aug-01
1/ Average daily primary dealer trading volume divided by outstanding amount.
Jan-02 Jun-02 Nov-02
4.5%
PRIMARY DEALER TIIS POSITIONS AS A PERCENTAGE OF OUTSTANDING TIIS
3-MONTH MOVING AVERAGE
T
4.5%
4.0%
4.0%
3.5%
3.5%
3.0%
3.0%
2.5%
2.5%
2.0%
2.0%
1.5%
1.5%
1.0%
1.0%
0.5%
Apr-98 Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Nov-02
0.5%
10-year TIIS Issuance Represents M o r e Than a
Quarter of Treasury's Total 10-year Note Issuance
Sbillions
70
60
50
40
30
20
10
0
1997
1998
1999
2000
2001
D 10-yr TIIS Issuance • 10-yr Nominal Issuance
2002
Outstanding Treasury Inflation-Indexed Securities
1997
Source: US Treasury
1998
1999
2000
2001
2002
Feb 2003
SIZE OF GLOBAL INFLATION-INDEXED
BOND MARKET VS. OTHER ASSET CLASSES
500 T
400 -
300 C
#o
S
v
200 -
100 -
0
J
'
•
Global Inflation Indexed
'
'
Global High Yield
'
'
'
Emerging M arket Bonds
Asset Class
Source: Bridgewater
'
•-
— '
Emerging M arket Equities
1
'
'—
Europ ean Corp orates
Distribution of Competitive Auction Awards of 10-Year Treasury Notes
10-Year Inflation-Indexed Notes
10-Year Fixed-Rate Notes
July 2002, October 2002 & January 2003
August 2002, November 2002 & February 2003
Financial Insts.,
1%
Other, 4 %
Financial Insts.,
3%
*., ~0/
Other, 2 %
Return Profiles
1997 - 2002
Lehman
Index
10-Year
Treasury
10-Year
TIIS
S&P 500 Index
w/dividends
2002 Returns
12.0%
14.9%
16.4%
-22.1%
Annualized Return
8.3%
8.9%
7.5%
3.3%
Monthly Volatility
1.3%
1.9%
1.1%
5.4%
Annual Volatility
5.7%
8.2%
6.1%
22.0%
Source: Barclays Capital
STRATEGIC ROLE
I/I BOND CORRELATION TO OTHER ASSETS AND INFLATION
Correlation of TIPS (10 Yr Duration) to
Equities
Nominal Bonds
CPI
S & P 500
10 Yr Duration
1 Month
0.18
0.11
0.57
3 Month
0.27
0.02
0.64
1 Year
0.51
-0.18
0.29
3 Year
0.84
-0.47
-0.33
5 Year
0.91
-0.53
-0.35
1970 to Present
10-Year TIIS and Nominal Yields
TIIS Yield
Nominal Yield
7.0
4.5
6.5
4.0
6.0
3.5
5.5
5.0
3.0
4.5
2.5
4.0
2.0
3.5
3.0
Jan-97
1.5
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
10-yr Constant Maturity
Jul-00
Jan-01
On-The-Run 10-yr TIIS
Jul-01
Jan-02
Jul-02
Jan-03
Summary
Treasury is committed because TIIS reduce cost
Closest thing to a risk free asset for long-term investors.
Highest credit quality
Improve portfolio diversification
Better match to inflation than real estate, commodities, or
other real assets
TIIS market is young but growing fast
TIIS Characteristics
Fixed real coupon, paid semi-annually on inflation
adjusted principal
•=-> • Deflation-protected principal at maturity
Principal adjusted for inflation daily, but paid at maturity
Inflation accretion is referenced to the CPI-U N S A , set
with a 3-month lag
First issue January 1997; 10 issues ranging from 2007 to
2032
$150 billion market capitalization; total Treasury market
capitalization $3.3 trillion
Three 10-year TIIS auctions this year, increased issuance
Average daily trading volume over $3 billion
Structure
• Principal value is adjusted for inflation by multiplying the
value at issuance by an index ratio which changes daily.
Inflation adjustment is paid at maturity.
• Coupon payments are a fixed percentage, determined at
auction, of the inflation- adjusted value of the principal on
the semiannual interest payment dates.
• The index ratio for a particular valuation date is the index
number for that date divided by the index number for the
issue date.
• Index Ratio Date =
Index number for value date
Index number for dated date
JS-391: Treasury Official Visits Chicago Tomorrow to Meet with Financial Industry on C... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 20, 2003
JS-391
MEDIA ADVISORY
Treasury Official Visits Chicago Tomorrow
to Meet with Financial industry on Cyber Security Issues
A Treasury Department official on Wednesday, May 21, 2003, will be in Chicago to
participate in a joint public-private sector symposium for representatives of financial
institutions on security issues and protecting the financial industry from cyber
attack.
Deputy Assistant Secretary for Critical Infrastructure Protection and Compliance
Policy Michael A. Dawson will speak at Protecting the Financial Sector - A Public
and Private Partnership, a symposium scheduled from 8:30 a m - 12:30 p m on May
21. Mr. Dawson will speak at 9:10 a m at the James R. Thompson Center, 100 W .
Randolph St., Chicago, IL.
Sponsored by the Federal Deposit Insurance Corporation, the symposium
represents an outreach effort by the government's Financial and Banking
Information Infrastructure Committee (FBIIC) and the private sector's Financial
Services Sector Coordinating Council (FSSCC) to private sector financial firms in
the Chicago metropolitan area.
At the Treasury Department, Mr. Dawson heads up the Office of Critical
Infrastructure Protection, which was established after September 11, 2001 to
strengthen the nation's safeguards against terrorist activities and financial crime.
The Office plays a key role in coordinating public and private efforts to protect the
critical infrastructure of the financial services industry from attack.
http://www freas Pov/nress/releases/js391 .htm
7/29/2003
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
May 20, 2003
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 6-DAY BILLS
6-Day Bill
May 21, 2003
May 27, 2003
912795NA5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.150%
Investment Rate 1/:
1.159%
Price:
99.981
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 44.89%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
20,270,000
0
0
$
$
4,000,025
0
0
20,270,000
4,000,025
0
0
Federal Reserve
TOTAL
Accepted
20,270,000
$
4,000,025
Median rate
1.140%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.100%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 20,270,000 / 4,000,025 = 5.07
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
~J
3°l^
Bureau of the Public Debt - Office of Financing
Addendum to Press Release dated May 20, 2003
6-day Cash Management Bill
CUSIP: 912795NA5
(amounts in thousands)
Tender Type
Primary Dealer1
Direct Bidder2
Indirect Bidder3
Total Competitive
Tendered
18,495,000
0
1,775,000
$ 20,270,000
Accepted
3,800,025
0
200,000
$ 4,000,025
Notes:
1: Primary dealers as submitters bidding for their o w n house accounts.
2: Non-Primary dealer submitters bidding for their o w n house accounts.
3: Customers placing competitive bids through a direct submitter, including foreign and
international monetary authorities placing bids through the N e w York Federal Reserve Bank.
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE CONTACT: Office of Financing
May 20, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Term: 91-Day Bill
Issue Date:
Maturity Date:
CUSIP Number:
May 22, 2003
August 21, 2 003
912795NJ6
High Rate: 1.020% Investment Rate 1/: 1.040% Price: 99.742
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 80.13%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type Tendered Accepted
Competitive
Noncompetitive
FIMA (noncompetitive)
$
33,935,760
1,376,376
165,000
$
14,458,848
1,376,376
165,000
SUBTOTAL 35,477,136 16,000,224 2/
Federal Reserve 4,956,146 4,956,146
TOTAL $ 40,433,282 $ 20,956,370
Median rate 1.010%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
0.990%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 35,477,136 / 16,000,224 = 2.22
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,178,980,000
http ://www.publicdebt.tr eas.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
FOR IMMEDIATE RELEASE CONTACT: Office of Financing
May 20, 2003
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Term: 182-Day Bill
Issue Date:
Maturity Date:
CUSIP Number:
May 22, 2003
November 20, 2 003
912795NX5
High Rate: 1.020% Investment Rate 1/: 1.043% Price: 99.484
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 34.15%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type Tendered Accepted
Competitive
Noncompetitive
FIMA (noncompetitive)
$
34,412,551
1,010,654
25,000
$
14,964,656
1,010,654
25,000
SUBTOTAL 35,448,205 16,000,310 2/
Federal Reserve 5,929,468 5,929,468
TOTAL $ 41,377,673 $ 21,929.778
Median rate 1.010%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.000%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 35,448,205 / 16,000,310 = 2.22
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $829,330,000
S-3
http ://www.publicdebt.tr eas.gov
JS-395: M E D I A A D V I S O R Y : Treasury and Federal Reserve Board Host Credit Manage...
Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 21, 2003
JS-395
MEDIA ADVISORY:
Treasury and Federal Reserve Board Host Credit Management Panel This
Week
Treasury Assistant Secretary for Financial Institutions Wayne A. Abernathy and
Federal Reserve Board Governor Edward M. Gramlich on Thursday, May 22, will
host a panel discussion on credit management with representatives of financial
services organizations and companies. Treasury Deputy Assistant Secretary for
Financial Education Judy Chapa will moderate the meeting and discussion.
The meeting will begin at 10:00 a.m. EDT in the Treasury Department's Cash
Room, 1500 Pennsylvania Ave., N.W. The opening remarks portion of the meeting
will be open to the media.
Participants in the panel discussion will include representatives from National
Foundation for Credit Counseling, Association for Financial Counseling and
Planning Education, In-Charge Institute, American Bankers Association, America's
Community Bankers, Credit Union National Foundation, Fannie M a e Foundation,
Freddie Mac, American Express, MasterCard, Visa, Community Financial Services
Association of America, Consumer Federation of America, National Council of La
Raza, A A R P , and College Parents of America.
The room will be available for pre-set at 9:00 a.m. on Thursday. Media without
Treasury or White House press credentials planning to attend should contact
Frances Anderson at Treasury's Office of Public Affairs at (202) 622-2960 or e-mail
frances.anderson@do.treas.gov by 5:00 p.m. on Wednesday with the following
information: name, social security number and date of birth. This information may
also be faxed to (202) 622-1999.
http://www.treas.gov/press/releases/js395.htm
7/29/2003
JS-396: Strengthening Remittance Channels to the Philippines
Page
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 20, 2003
JS-396
Strengthening Remittance Channels to the Philippines
The U.S. Treasury Department and the Philippines Ministry of Finance today
agreed to work together to improve mechanisms for overseas remittances services
to the Philippines. In the presence of Philippine President Gloria Arroyo, U.S.
Treasury Under Secretary John Taylor and Philippine Finance Secretary Jose
Camacho signed a Memorandum of Intent to work toward that end.
The primary goals of the initiative are to reduce costs through greater competition
and increased efficiency, enhance access to remittance services in the formal
financial system, and ensure compliance with counter-terrorist financing and antimoney laundering standards.
In welcoming the initiative, Under Secretary Taylor noted that: "Achieving these
goals will benefit the Filipino overseas workers, the Philippine economy and the
global financial system."
According to government statistics, over seven million overseas Filipino workers
sent over US$6 billion in remittances to the Philippines in 2001. Of this,
approximately 7 0 % was sent through banks and wire transfer services, with fees
reaching as high as 1 5 % of the value of the remittances. Experience has shown
that competition and improved technology can enhance access to remittance
services via the banking sector and significantly reduce the fees for such services
The Treasury Department in collaboration with the Federal Deposit Insurance
Corporation and the Federal Reserve will work with their Philippines counterparts to
identify deficiencies in currently available channels to send remittances to the
Philippines; jointly understand the role of the private sector in this area; strengthen
the critical financial infrastructure that supports remittances and minimize any
vulnerabilities that may exist; promote financial literacy among those w h o do not
use traditional banking channels; and ensure proper implementation and full
compliance with international anti-money laundering and counter-terrorist financing
standards.
http ://www.treas. eov/oress/releases/j s396.htm
7/29/2003
JS-397: D A S Michael Dawson's Remarks on Financial Sector Security
Page 1 of4
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 21, 2003
JS-397
Remarks by
Michael A. Dawson
Deputy Assistant Secretary for
Critical Infrastructure Protection and Compliance Policy
To
Protecting the Financial Sector - A Public and Private Partnership
Chicago, Illinois
Protecting Critical Financial Infrastructure
I would like to begin by thanking the Federal Deposit Insurance Corporation for its
leadership in helping to organize this event. The turnout has been tremendous. In
the weeks leading up to this event, I a m told, w e had to abandon plans to hold the
meeting in a room that would hold a mere 200 people. W e had to accommodate
more. That is a testament to the fine job that the FDIC has done in putting this
event together. Thank you, Chairman Powell, Michael Zamorski, and Karl
Krichbaum, for your leadership.
It is also, of course, a testament to all of you in the audience today. All of you took
time out of busy schedules to come learn more about what the government and the
private sector are doing to protect our critical financial infrastructure. I appreciate
your commitment. I know that you have work to do, customers to serve. Our job is
to make sure that w e share enough information during these sessions to make your
investment of time worthwhile. W e will do our best.
Needless to say, the strong turnout is no surprise. Chicago's leadership in
homeland security is well known. Just last week, Chicago and Seattle showed
great leadership by hosting exercises simulating terrorist attacks and testing
government and private sector responses to those tasks. I participated in exercises
for the Treasury Department in Washington, and was impressed by what I saw
Chicago do, learn, and teach other Americans.
I wish to highlight two other examples of Chicago's leadership. The first is the fine
work done by Chicago Office of Emergency Management and Communications
Executive Director Cortez Trotter. During m y last trip to Chicago, I met with
Director Trotter. I saw the hard work he and his team are accomplishing at
Chicago's emergency coordination center. Recently, Director Trotter established a
desk within that center for representatives of Chicago's financial community. That
means that during emergencies, Chicago's financial community will be able to
share information on a real-time basis with first-responders, government officials,
utility officials, and others. This can be crucial to protecting the employees of
Chicago's financial institutions, protecting the institutions' customers, and to
speeding recovery efforts in the event of a disruption. Thank you, Director Trotter,
for your leadership. You have made Chicago's financial infrastructure safer.
I also wish to thank the Options Clearing Corporation for the leadership it has
shown. The O C C has been generous with its time and information - not just with
me, but with others in the Chicago financial community. Vice Chairman Hender,
you and your team have led by example, and done important work to protect your
employees and your customers. R o Kumar has generously committed his time and
expertise to the Financial Services Sector Coordinating Council - more about that
later. And, lest you need any assurance, you are extremely well-represented in
Washington by Susan Milligan. Thank you for your leadership.
http : / / w w w treas. eov/nress/releases/j s3 9 7 .htm
JS-397: D A S Michael Dawson's Remarks on Financial Sector Security
Page 2 ot 4
I will focus m y remarks on s o m e of the principles that guided the Department of the
Treasury during and after the attacks of September 11. These principles continue
to guide us as w e work to prevent future attacks; to minimize vulnerabilities to
attacks; and to prepare to recover from attacks, should they occur. I will explain
what these principles m e a n for national-regional cooperation, focusing on our
efforts to improve information sharing.
Guiding Principles
Every thing that w e do at Treasury to protect the critical financial infrastructure is
guided by a few important principles. I will talk about three, although there are
others.
First, as the President has said, the highest responsibility of government is the
protection of its citizens. W e are devoted to protecting the critical financial
infrastructure, because it is essential to meeting that responsibility.
For one thing, the most important component of our financial infrastructure is the
people w h o m a k e it work. W e must protect the safety of the tellers, loan officers,
traders, and technicians that m a k e up our financial infrastructure. Americans trust
these employees with their money. Financial services employees, in turn, trust us
with their lives. W e have a profound obligation to keep these employees safe.
For another thing, Americans depend on the critical financial infrastructure to make
the economy work and grow. A s Treasury Secretary S n o w has said, the financial
system is the engine of our free enterprise economy.
W e have to protect this engine so that it can continue to support growth in the
American economy, so that it can continue to create jobs for American workers.
It is hard to overstate our dependence on the financial infrastructure. We depend
on it to receive our paychecks; to withdraw cash from an A T M ; to pay for our
groceries with cash, check, debit cards, or credit cards; to finance the purchase of a
house or a car; to save for our children's education; to plan for a secure retirement.
Americans have confidence in our financial infrastructure. And they should. Our
financial infrastructure is the most resilient in the world. Our job is to keep it that
way, to ensure the resiliency of the infrastructure in the face of evolving threats.
Second, we are committed to ensuring that our financial institutions continue to
function even during - especially during - times of stress. Of course, the physical
safety of your employees and customers comes first. But absent a specific and
credible threat to physical safety, it is important for financial institutions and markets
to continue to operate as close to business-as-usual as possible. There are several
important reasons for this. O n e is that it is precisely during times of stress that
Americans need the financial system most. A s I mentioned earlier, just last w e e k
Chicago participated in an exercise involving a hypothetical biological attack. Think
about what the public response to that would be. Think about h o w m u c h worse it
would be if people could not withdraw cash from A T M machines, if hospitals could
not pay employees or suppliers. The s a m e is true of our markets. During times of
stress, investors need to price the impact of that disruption on assets. The longer
they are prevented from pricing the impact, the more anxiety builds and the worse
the consequences will be, w e believe, w h e n markets eventually re-open.
A third guiding principle is that we want to promote decentralized decision-making
and problem-solving, both as w e prepare for disruptions and as w e weather them.
W e favor a cooperative, public-private partnership as w e work together to protect
our financial infrastructure. In the event of a disruption to the payment system, for
example, w e want the subject matter experts in payments systems to fix it. W e
don't want them to wait for guidance from Treasury on h o w to fix it. Just fix it. Y o u
are in the best position to determine what steps you should take to protect your
employees and your customers. W e will help where w e can, but w e intend to stand
out of the w a y and let the financial institutions and the regulators that are closest to
the problems find the solutions.
These principles have important implications for national-regional cooperation.
http://www.treas.eov/Dress/releases/js397.htm
7/29/2003
JS-397: D A S Michael Dawson's Remarks on Financial Sector Security
I*age 5 014
State and local governments are, of course, right here, right now. Financial
institutions are closer to their employees and customers than w e are in
Washington. W e often think of state and local officials as first responders rescuing and treating victims after an attack. I suggest to you that in m a n y
instances, state and local authorities and private financial institutions m a y be first
protectors as well. It m a y be a local policeman w h o notices something suspicious
about a truck.
It m a y be state and local police w h o are the first on the scene to protect a
component of our critical infrastructure after w e learn of a specific and credible
threat against it. It m a y be - indeed, it almost certainly is - the private financial
institution that is in the best position to correct vulnerabilities in its systems before
worms, viruses, or bugs infect.
I saw this first hand yesterday. Several weeks ago, a critical financial institution
approached Treasury with a simple question. What's the plan? What is the plan for
a coordinated federal, state, and local response to protect the critical institution if a
specific and credible threat against it were to emerge? I had to confess to this
important institution that there w a s no specific plan for coordinating a federal, state,
and local response, despite its importance. A s later b e c a m e clear, m a n y of
agencies w h o would be involved in protecting the institution did, in fact, have a plan
for what they would do. But this w a s not always the case. And those agencies that
had a plan had not coordinated that plan with all of the agencies that they needed
to.
Treasury made this institution a deal. We agreed to jointly host an all day exercise
where w e would outline a coordinated plan. W e brought everyone together, every
agency that would likely have a role in protecting the institution. W e had the local
police department, the county sheriff, the state police, the governor's office, the
state attorney general's office, the Federal Bureau of Investigations, the Bureau of
Alcohol, Tobacco and Firearms, the United States Secret Service, the Homeland
Security Council, the Homeland Security Department, appropriate financial
regulators, representatives from the intelligence community, and m a n y others. W e
hired a first rate consulting firm to conduct a "war g a m e " - an exercise in which this
collection of protectors w a s presented with a hypothetical specific and credible
threat. W e reacted to this hypothetical threat and documented our reactions. From
this exercise, w e will develop a plan and answer the institutions request.
One thing that was clear from the exercise was that the state and local authorities
would be the first protectors on the scene. They would be the ones with detailed
knowledge about the institution and its environs: where the nearest airports are,
not just the big ones, but the smaller regional and municipal airports; where the
nearest railroad tracks are; where the water and sewer accesses are; where the
central offices are through which the institution's telecommunications lines are
routed; where the electrical substations are; and so forth. It w a s also clear that the
institution would have to actively participate in its o w n protection, working with local
authorities to help them identify vulnerabilities and to find ways of carrying on their
business despite the increase in physical security.
Given their important role as first protectors, the federal government should work to
share timely threat information with state and local law enforcement authorities and,
where possible, with the private sector. O n e of m y responsibilities is to help m a k e
sure this happens for information relating to the critical financial infrastructure.
There are several ways that we are trying to improve information sharing between
the federal government and first protectors - state and local authorities and the
private sector.
For example, the President established the Financial and Banking Information
Infrastructure Committee, the FBIIC. This Committee is n o w sponsored by the
President's Working Group on Financial Markets - an interagency task force lead
by Secretary Snow, Chairman Greenspan, Chairman Donaldson, and Chairman
N e w s o m e -Treasury chairs the FBIIC. Its m e m b e r s include the Federal Reserve
Board, the Securities and Exchange Commission, the Commodity Futures Trading
http://www.treas.eov/nress/releases/js397.htm
7/29/2003
JS-397: D A S Michael Dawson's Remarks on Financial Sector Security
Page 4 0 1 4
Commission, the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, the Office of Thrift Supervision, the National Credit
Union Administration, and the Office of Federal Housing Enterprise Oversight. It
includes state authorities as well - the Conference of State Banking Supervisors,
and the National Association of Insurance Commissioners.
One of the things that we use the FBIIC for is as a mechanism to evaluate and
share available threat information. For example, Treasury has installed secure
telecommunications equipment and arranged for appropriate security clearances for
personnel in the members of FBIIC, so that w e can effectively share sensitive and
even classified information. Where appropriate, w e can share information with an
individual institution, in the case of a specific and credible threat against a specific
institution, or with the financial sector more generally.
Another important mechanism for sharing information is the Financial Services
Sector Coordinating Council. The Council is led by Rhonda MacLean, a senior
executive with Bank of America. Treasury appointed Ms. MacLean last June. S h e
has done an outstanding job. Over two dozen financial services trade associations
have joined the council. A m o n g many other things, the Council has worked to
collect and disseminate considerations for private institutions to bear in mind in the
event that the threat advisory level is at s o m e point in the future raised to red. T h e
Council is also working to construct a repository of table-top exercises, war-games,
and tests. This repository will provide a central source for the industry to learn what
is happening in the critical financial protection area. In the future, the repository will
be a useful tool as w e m o v e to more coordinated, inter-institutional testing and
planning. Our hope is that w e can improve from the situation w e have today, in
which m a n y well-intentioned exercises are taking place, but without much
coordination between exercises. W e need to improve coordination so that the
exercises build on each other and, overtime, systematically improve the resiliency
of the industry as a whole. The government and the private sector did a good job of
coordinating the planning, preparation, and testing for Y2K. W e hope w e can
replicate that experience in this context.
A third mechanism for sharing information is the Financial Services Information
Sharing and Analysis Center, the FS/ISAC. Under the leadership of Suzanne
Gorman, a senior executive at the Securities Industry Automation Corporation, the
FS/ISAC has emerged as a leader in information sharing. For example, m a n y of
you will remember that in January of this year a w o r m called Slammer rocketed
around the internet.
The FS/ISAC w a s instrumental in alerting the financial services sector to this
threat. W e believe that the FS/ISAC w a s largely responsible for the fact that the
financial sector experienced relatively low disruption from the worm.
Each sector has an ISAC, and I am proud of the fact that the Financial Services
ISAC w a s both the first and the best. I a m even more proud of the vision that M s .
Gorman has shown to enhance the value proposition of the FS/ISAC by expanding
its membership base; improving cross-sectoral information sharing; and working to
encourage members to contribute more information, not just receive it. Treasury
w a s pleased to devote resource to the FS/ISAC as it planned these improvements.
W e look forward to supporting the FS/ISAC as it implements its next phase.
Already, I a m told by Homeland Security officials that they regard the FS/ISAC's
vision as a model that other ISACs can look to and learn from.
These are some of the ways that we work to share information among the federal
government, state and local government, and the private sector, it is our biggest
challenge. Without effective information sharing, state and local authorities can be
only first responders - arriving on the scene after attacks. W e cannot afford that.
W e must ensure that state and local authorities and the private sector have the
opportunity to serve as first protectors, disrupting and preventing attacks before
they occur.
http ://www.treas. eov/nress/releases/j s397.htm
7/29/2003
JS-398: Treasury to Delay Announcement of Weekly Bills
Page
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-398
Treasury to Delay Announcement of Weekly Bills
The Treasury Department is postponing announcement of its weekly 13-week and
26-week bill auctions and its monthly 2-year note auction, scheduled to be
announced May 22, 2003, until further notice. This postponement is due to the
statutory debt limit.
http://wwwjreas.gov/press/releases/js398.htm
7/29/2003
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
May 21, 2003
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
May 22, 2003
June 19, 2003
912795MS7
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.090%
Investment Rate 1/:
1.112%
Price:
99.915
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 42.42%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tendered
Tender Type
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
35,018,400
50,439
0
Accepted
$
21,950,150
50,439
0
35,068,839
22,000,589
4,397,327
4,397,327
39,466,166
$
26,397,916
Median rate
1.070%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.050%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 35,068,839 / 22,000,589 = 1.59
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
91
JS-400: Treasury Department Announces Marin's Plan to Leave Treasury
Page 1 of 2
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-400
Treasury Department Announces Marin's Plan to Leave Treasury
The Treasury Department today announced that United States Treasurer Rosario
Marin will resign effective June 30, 2003.
"Rosario Marin has been an outstanding United States Treasurer. We will miss her
leadership, commitment, energy and dedication," said Treasury Secretary John
Snow.
Marin played an essential role at the Treasury Department over the last two years
and has been at the forefront of several key policy debates ranging from financial
literacy to the Partnership for Prosperity, and from reducing counterfeiting of our
currency to issuing the Patriot Savings Bond. Marin also served on the President's
Commission on Excellence in Education for Hispanic Americans.
Among other duties, Marin has been one of the Administration's top officials tasked
with communicating President Bush's efforts to keep America's economy strong
and to spread prosperity around the world.
"Marin brought invaluable experience to her position and with that background and
perspective, she played an important role in shaping many of the public policy
debates within the Administration and on Capitol Hill," Snow concluded.
(Attachment: Marin Letter)
May 22, 2003
The Honorable John W. Snow
Secretary
Department of the Treasury
1500 Pennsylvania Ave
Washington, D C . 20220
Dear Mr. Secretary Snow:
it has been my distinct privilege and great honor to serve our nation as a member of
President George W . Bush administration. Words could not begin to describe m y
profound gratitude for the opportunity to serve along with the best and the brightest
in the federal government during these historic times in our nation.
During my tenure, I was fortunate to have been part of Treasury's efforts on issues
that are very dear to me: from financial literacy to Partnership for Prosperity, from
reducing counterfeiting of our currency to issuing the Patriot Savings Bond, while
also serving on the President's Commission on Excellence in Education for
Hispanic Americans. I have been so lucky!
After a long and thoughtful consideration, my family and I have decided to go back
home to California, thus I submit m y resignation effective June 30, 2003.
Mr. Secretary, America indeed is the greatest country in the world and the land of
opportunity; where for the first time in its history, an immigrant became its 41st
Treasurer, i will always treasure the honor and will be indebted to our President for
such distinction. May God Bless you and all m y colleagues as you continue to set
http ://wwwJiesa,£OY/press/releases/i s400.htm
JS-400: Treasury Department A n n o u n c e s Marin's Plan to Leave Treasury
Page 2 ot
policies that will guide our nation's economic prosperity.
Sincerely,
Rosario Marin
http://www.treas.gov/press/release
7/29/2003
JS-401: Assistant Secretary Abernathy's Remarks to Treasury-Fed Credit Management Pa... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-401
Remarks of
W a y n e A. Abernathy
Assistant Secretary of the Treasury for Financial Institutions
To the Treasury-Federal Reserve Discussion Panel on Credit Management
Washington, D.C.
In the fast several years, due to technology, a favorable legal structure under the
Fair Credit Reporting Act, and innovation in the financial services industry, America
has offered a wider variety of credit products, to more people, at lower costs than
ever before in our history, and w e do it better than anywhere else in the world.
Millions of Americans derive great benefits from that, to build a home, start a
business, finance an education, buy a car, and meet the every day needs of every
day life.
They derive these benefits, that is, if they handle their credit wisely. When they do
not, this great blessing of available credit can become a nagging curse that can
break up a home, bankrupt a business, destroy the dream of an education, lead to
repossession of the car, and make it a struggle to meet the everyday needs of
everyday life.
Financial distress is no more in the interests of America's financial institutions than
it is in the interests of her people. Fortunately, there are prudent rules or principles
that if followed can help keep the wolves of financial distress away from the door.
Today we have invited people from many walks of life to meet together here to
discuss what those basic principles of credit management are and how w e can help
spread the word. W e hope to see these principles applied more widely so that the
benefits of ready credit can be enjoyed more widely. Many have been engaged in
this effort, at many levels, and from many venues. There is a lot of wisdom
gathered here today, and w e propose to make good use of it.
We are especially grateful for the leadership role taken by the Federal Reserve in
promoting wise credit management, along with other vitally important elements of
financial education. And w e are particularly grateful for the presence of Governor
Gramlich this morning, who knows as much about educating people in the wise
ways of basic, sound economics as anyone i know.
We thank each of you for your participation, for what you have done to help educate
people about wise credit management, and for what w e can all do together to
extend this effort even more.
http ://www.treas.gov/press/releases/i s401 .htm
7/29/2003
JS-402: Testimony of Peter R. Fisher on Senate Committee on Banking, Housing, and Ur... Page 1 of 2
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-402
Testimony of Peter R. Fisher
Under Secretary of Treasury for Domestic Finance
Senate Committee on Banking, Housing, and Urban Affairs
Subcommittee on Economic Policy
Chairman Bunning, Ranking Member Schumer, and other members of this
subcommittee, I a m pleased that you have chosen to hold this hearing on a top
economic priority for our nation, both now and for decades to come: increasing
investment.
For the immediate future, our challenge is to rebuild business appetite for taking
risks on the future and thus for creating jobs. Looking farther into the 21st century,
a major challenge for our society is to pay for the collective retirements of m y
generation and those that follow, while keeping commitments to current retirees and
those near retirement. Over both horizons, the central task for government and for
the private sector is boosting savings and investment. First, government must
examine and remove legal and regulatory obstructions to savings and investment.
The President has focused our attention on the need to reduce the biases against
equity investment. Second, to bolster investor confidence, shareholders should
demand and firms should do a better job of disclosing their key indicators of
business and financial performance and prospects - the ones they actually use in
managing their businesses.
Our key macroeconomic challenge today is to face the aftermath of the
extraordinary events of the 1990s. Federal Reserve monetary policy, global
economic integration, and telecommunications advances combined to fuel real
prosperity and higher productivity, but investors' overestimation of their impact
contributed to a stock market bubble. W e continue to live with the consequences of
these events and the destruction of trillions in household wealth as the bubble
burst.
Business investment began slowing in 2000, causing demand for labor to soften.
Let's be clear where jobs come from. N e w jobs come from investment - the
willingness of investors and entrepreneurs to put capital at risk in a business
venture. The President has focused us precisely on that point: sharpening the
incentives for investors and entrepreneurs to invest in the most productive
ventures. And higher productivity means higher wages and a stronger economy for
everyone.
The task before us is much the same throughout this new century: to enhance
incentives for private sector savings and investment. W e are going to pay for the
retirement and health care of the baby boom generation one way or another. W e
can increase private savings and investment, or w e will reach lower standards of
living in the future than w e would otherwise.
How can government and business achieve these goals now and in the future?
The President has clarified the main task for us in government: to remove the legal,
tax, and regulatory distortions that discourage savings and investment.
There is no better example than the current double taxation of corporate dividends.
http ://www.treas. gov/press/releases/i s402 .htm
JS-402: Testimony of Peter R. Fisher on Senate Committee on Banking, Housing, and Ur... Page 2 of 2
N o one defends this bias from first principles; and no other major industrial nation
taxes profits at such a punitive effective rate. By taxing dividends twice, our tax
code encourages companies to retain earnings instead of paying them to
shareholders; to raise excessive levels of debt; and to dedicate s o m e of America's
leading minds to tax minimization instead of job creation. A n d by imposing a high
marginal rate on profit, our tax code thins the vital blood of economic growth: risk
capital.
We are encouraged by the good progress being made on the President's Jobs and
Growth proposal, including progress toward lowering tax barriers to savings and
investment. W e are working with Congress to obtain the best package possible, as
quickly as possible. T h e President has m a d e clear that the sooner w e get this
done, the sooner w e can create jobs and put people back to work.
Boosting savings and investment in America will also require restoring investor
confidence. Congress passed Sarbanes-Oxley, and the S E C and Justice
Department are successfully implementing its provisions to improve corporate
governance. But companies too have responsibilities to lead - to provide investors
with meaningful, high quality information. This is not principally a task for the
government to achieve.
Our securities markets are extremely efficient at pricing and allocating capital on the
basis of ail available information. Unfortunately, important information is too often
not available to shareholders. W e will not restore our investor confidence until
shareholders truly can see the companies in which they invest through the eyes of
their agents in management, until they can see the real, economic leverage and the
key indicators of business value that insiders can.
When investors have a picture of the real, economic leverage employed, regardless
of the distractions of off- vs. on-balance sheet distinctions, attention will naturally
turn to cash flow: to h o w management expects to pay down the leverage and still
have s o m e income left over for the shareholders. Exposing true leverage contractually obligated net present value - is the only w a y that shareholders and
creditors can judge true performance and can distinguish profit from business
operations and from financial engineering.
Private sector leaders must transform the practice of corporate disclosure, to set a
n e w class of best practices that will genuinely inform investors about the risk/reward
prospects of the firms in which they invest.
I wish that government could set best practices by fiat; I don't think it can. Only the
private sector - corporate executives, lawyers, accountants, bankers, analysts, and
m o n e y managers - can m a k e it happen.
The President has urged us to focus on this top national economic priority:
encouraging investment. Sharpening the tax incentives and improving corporate
disclosure are crucial steps toward that goal - both to create jobs n o w and to
generate the wealth later to pay for our collective retirement.
http://www.treas.gov/press/releases/js402.htm
7/29/2003
JS-403: Treasury and Federal Reserve Host Meeting to Discuss Credit Management
Page 1 of
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-403
Treasury and Federal Reserve Host Meeting to Discuss Credit Management
Treasury Assistant Secretary for Financial Institutions Wayne A. Abernathy and
Federal Reserve Board Governor Edward M. Gramlich today hosted a panel
discussion on credit management with representatives of financial services
organizations and companies. Treasury Deputy Assistant Secretary for Financial
Education Judy Chapa moderated the meeting and discussion.
"We must take steps to educate all Americans about the importance of responsible
credit management," said Assistant Secretary Abernathy. "A good credit rating is
critical to the American family - opening the door to homeownership,
entrepreneurial business loans, assistance with higher education costs and many
other goals. W e welcome this exchange of ideas on how to best focus our efforts."
"Credit must be managed wisely," said Governor Gramlich. "People who
understand the fundamentals of money management are more likely to make
decisions that promote their own well-being and, on a broader scale, foster a more
efficient economy. I a m hopeful that today's initiative will inspire additional research
into the most effective credit management
techniques and educational tools."
During the meeting, the participants plan to gain consensus on core principles that
they would like to focus on as they work to strengthen American's understanding of
credit management.
Participants in the panel discussion included representatives from National
Foundation for Credit Counseling, Association for Financial Counseling and
Planning Education, In-Charge Institute, American Bankers Association, America's
Community Bankers, Credit Union National Foundation, Fannie M a e Foundation,
Freddie Mac, American Express, MasterCard, Visa, Community Financial Services
Association of America, Consumer Federation of America, National Council of La
Raza, A A R P , and College Parents of America.
The issue of credit management is one of four areas of focus by the Treasury
Department's Office of Financial Education (OFE), established in 2002 and headed
up by Deputy Assistant Secretary Chapa. The O F E works to ensure that Americans
have access to financial education programs and that they obtain the practical
knowledge and skill sets that will enable them to make informed financial choices
throughout various life stages. The O F E chairs the Federal Government Financial
Education Coordinating Group.
As the agency with responsibility for the Truth in Lending Act regulations, the
Federal Reserve has worked to promote access to credit and fair lending for underserved consumers and communities. In 2000, the Federal Reserve hosted a
discussion on best practices in consumer credit education; and through its w e b site
and consumer education materials is working to make sure consumers know their
rights and responsibilities in credit transactions.
http:/7"™™ tr^c,c anWnrpcc/ releases/j s403.htm
7/29/2003
PRESS ROOM
FROM THE OFFICE OF PUBLIC AFFAIRS
May 22, 2003
is-404
U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. A s indicated in this table, U.S. reserve assets
totaled $82,182 million as of the end of that week, compared to $81,827 million as of the end of the prior week.
I. Official U.S. Reserve Assets (in US millions)
M a v 9, 2003
M a v 16, 2003
81,827
81,182
TOTAL
1. Foreign Currency Reserves
Euro
Yen
TOTAL
Euro
Yen
TOTAL
a. Securities
7,550
13,421
20,971
7,638
13,559
21,197
0
0
Of which, issue?' headquartered in the U.S.
b. Total deposits with:
b.i. Other central banks and BIS
12,372
15,067
2,695
12,448
2,722
15,170
b.ii. Banks headquartered in the US.
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the US.
0
0
b.iii. Of which, banks located in the U.S.
0
0
2. IMF Reserve Position
23,109
23,126
3. Special Drawing Rights (SDRs)
11,637
11,646
4. Gold Stock3
11,043
11,043
0
0
5. Other Reserve Assets
II. Predetermined Short-Term Drains on Foreign Currency Assets
M a v 9, 2003
Euro
1. Foreign currency loans and securities
Yen
M a y 16, 2003
TOTAL
Euro
0
2. Aggregate short and long positions in forwards and futures in foreign currencies vis-a-vis the U.S. dollar:
Yen
TOTAL
0
2. a. Short positions
0
0
2.b. Long positions
0
0
3. Other-
0
0
HI. Contingent Short-Term Net Drains on Foreign Currency Assets
M a v 9, 2003
Euro
1. Contingent liabilities in foreign currency
Yen
M a v 16, 2003
TOTAL
0
Euro
Yen
TOTAL
0
l.a. Collateral guarantees on debt due within 1
year
l.b. Other contingent liabilities
2. Foreign currency securities with embedded
options
0
3. Undrawn, unconditional credit lines
0
0
0
0
0
3. a. With other central banks
3.b. With banks and otherfinancialinstitutions
Headquartered in the U.S.
3.c. With banks and otherfinancialinstitutions
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.l. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.l. Bought calls
4.b.2. Written puts
Notes:
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. Foreign Currency Reserves for the latest week may be subject to revision. Foreign Currency
Reserves for the prior week are final.
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 SDR/dollar exchange rate for the reporting date. The entries for the latest week reflect any
necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. IMF data for the latest week m a y be
subject to revision. IMF data for the prior w e e k are final.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
JS-405: Treasury Secretary Snow Statement on the N e w IRS Management Team
Page 1 of
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-405
Treasury Secretary Snow Statement on the New IRS Management Team
On behalf of the hardworking taxpayer, I'm asking the IRS to improve service,
respect taxpayer rights, and ensure that everyone pays their fair share. The
changes announced today by Commissioner Everson are designed to support
these important goals.
http://www treas gov/nress/releases/js405.htm
7/29/2003
JS-406: United States Treasury Secretary John Snow Post G-8 Statement Deauville, France Page 1 of 2
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 17, 2003
JS-406
United States Treasury Secretary John Snow
Post G-8 Statement
Deauville, France
Saturday, M a y 17, 2003
I enjoyed the opportunity to meet - for the third time since being sworn in as U.S.
Treasury Secretary - with m y fellow finance ministers in Deauville this weekend to
help prepare for our Leaders' meeting in Evian.
Strengthening global growth must be the top priority for the G-8. I delivered that
strong message today. Growth in the major economies is simply not what it could
be. W e need to do more to ensure a robust recovery. I provided an update on the
actions taken by the United States. The President's Jobs and Growth plan will
accelerate the U.S. recovery. I made clear that the United States expects others to
take bold actions themselves - including fundamental structural reforms where
necessary - to spur growth, create jobs and contribute to global prosperity.
My colleagues and I commend the World Bank and the IMF for agreeing to expedite
their needs assessment activity in Iraq. W e discussed the need to obtain the full
participation of the international financial institutions to help Iraq to rebuild and to
rejoin the international economy. W e stressed the importance of beginning a
process for countries to donate funds for reconstruction in Iraq. W e discussed the
problem of Iraq's large debt. W e formally asked the IMF to assess the debt
situation for countries outside the Paris Club. There was recognition that w e
cannot expect Iraq to make any service payments on that debt at least through the
end of 2004.
I urged my fellow ministers to make seized assets available to the Iraqi people and
to aggressively continue the search for the illegal assets of the corrupt regime of
Saddam Hussein. Our task is clear - identify and repatriate all assets for the
betterment of the Iraqi people. More generally, I also spoke about terrorism
financing, reminding m y colleagues that w e need to maintain focus and momentum
in this ongoing fight.
Turning to corporate governance, we all voiced our support for steps to help ensure
accountability and promote transparency. I assured m y colleagues that the United
States would continue to take actions necessary to implement the provisions of
Sarbanes-Oxley. W e remain committed to seeing these reforms fully implemented
in order to bolster investor confidence. I was also pleased to see that the issue of
the high costs of litigation was reviewed as a burden on economic growth.
On crisis prevention and resolution, we reflected on the extremely positive recent
developments on collective action clauses. I believe that the actions taken, most
recently by South Africa, represent a very significant and concrete step toward
improved performance and increased capital flow to emerging markets. W e all
encourage other countries to follow this lead, so that collective action clauses
become routine. Of note, w e welcome the successful outcomes in Uruguay. W e
support Uruguay's co-operative approach with creditors and their responsible
efforts to achieve debt sustainability and implement essential economic reforms.
Raising economic growth in our own economies is the most important thing we can
do to improve the prospects for developing economies at this time. Higher growth
http://www trfifls pov/nress/releases/js406.htm
7/29/2003
JS-406: United States Treasury Secretary John Snow Post G-8 Statement Deauville, France Page 2 of 2
in the G-8 leads directly to better economic results for the developing economies
particularly as it creates the opportunity for more trade with rising exports from the
developing countries. The G-8 needs to be more focused on measurable results
and rewarding countries that deliver on economic reform. The President's
Millennium Challenge Account initiative is designed to provide incentives, offering
substantial additional assistance to reward strong policies. And I discussed with m y
colleagues the remarkable increase in development assistance proposed by
President Bush, including the M C A , new money to combat HIV/AIDs and new
money to address famine and food security worldwide.
Finance Ministers Statement
http:/Ax™™trRaQ
tfnv/nrpss/releases/js406.htm
7/29/2003
FINAL
For Immediate Release
Saturday, M a y 17, 2003
Contact: Tony Fratto
(202) 622-2960
Finance Ministers' Statement
Deauville, M a y 17th, 2003
We met today ahead of the Evian Summit. While major downside risks have receded, our economies
continue to face m a n y challenges. W e are nonetheless confident in the potential for stronger growth. Our
task is to realise this potential. W e will therefore continue to cooperate to achieve higher growth in all of
our economies, while ensuring domestic and external sustainability, and thereby to contribute to global
economic growth. W e are strengthening our commitments to structural reforms and sound macroeconomic
policies.
As we face a common challenge of ageing, our contribution to higher worldwide growth should rely more
strongly on a good system of education and life-long learning, research and development, innovation and
entrepreneurship, on the foundation of a sustainable fiscal and monetary framework. Europe will continue
to foster innovation and to accelerate labour, product and capital market reforms so as to achieve a more
flexible economy. The U S will act to create jobs and to encourage savings and investment by the private
sector. Japan will continue its structural reforms, including in its financial and corporate sectors, and
intensify its efforts to combat deflation. Canada will maintain monetary prudence and fiscal balance, while
investing in productivity. Russia, which has greatly improved its performance, will pursue structural
reforms, in particular in the financial sector.
To bolster investor confidence, we will continue to reinforce corporate governance practices, market
discipline, transparency and regulation in line with the principles agreed in February. W e welcome the
work program agreed by the Financial Stability Forum in Berlin on potential financial vulnerabilities and
corporate governance and related matters, including rating agencies and financial analysts, and will review
the results of this work in September. W e have agreed to appoint Roger Ferguson as F S F Chair. W e favour
the emergence, through open and public processes involving the private sector, of high-quality
internationally recognized accounting standards that are applied, interpreted and enforced, with due regard
to financial stability concerns. W e will closely monitor the on-going work on Basel II and will review the
issue at our next meeting in September. W e also encourage voluntary private sector initiatives that foster
and complement such international efforts to promote corporate social and environmental responsibility as
the O E C D guidelines for Multinational Enterprises and the U N Global Compact principles.
We reaffirm our strong commitment to combat terrorist financing. We call on the Financial Action Task
Force to deepen its engagement with the U N and the International Financial Institutions, to foster
worldwide compliance with international standards against terrorist financing and delivery of related
technical assistance. W e look forward to further work on the misuse of alternative remittance systems and
non-profit organisations and to developing more effective freezing regimes. W e welcome the progress
achieved by the I M F , the World Bank and the F A T F on the pilot program of assessments and look forward
to its evaluation. W e look forward to revised F A T F recommendations by June, establishing an enhanced
standard in thefightagainst money laundering andfinancialcrime.
JS-419
FINAL
W e urge all O E C D countries to implement the standards set out in the O E C D ' s 2000 report on access to
bank information and to ensure effective exchange of information for tax purposes.
We reaffirm our commitment to strengthen our crisis prevention and resolution measures through
improved I M F surveillance, greater transparency and more orderly, timely and predictable workouts of
unsustainable debt. W e welcome Brazil. South Africa and Uruguay's decisions to adopt collective action
clauses following on Mexico's lead, and w e encourage countries to adopt C A C s with terms that facilitate
debt restructuring. While keeping debt restructuring a last resort, w e have agreed on a n e w Paris Club
approach, as set out in the annex, for non-HDLFC low- and middle-income countries ready to follow an exit
strategy and to seek comparable treatment. W e welcome initiatives being taken, including issuers, private
sector and ourselves, on the development of a code of conduct. W e look forward to reviewing progress in
September.
We are at a turning point on development as on trade issues. We owe it to developing countries to take up
our responsibilities. First, w e need to raise economic growth in our o w n economies. Second, within a
predictable medium-term framework, w e need to provide the developing countries the resources necessary
to support their commitment to implement structural and governance reforms, so as to accelerate their
growth and social progress. Third, w e are determined to achieve the objectives and overall timetable set
out in the D o h a Development Agenda and to ensure that the Cancun ministerial takes the decisions
necessary to reach these goals. Commitments taken must be fulfilled. It is our duty as m u c h as it is to the
benefit of all. W e ask Francis M e r to report to the Heads of States and Government in advance of the Evian
summit on these issues, with a view to delivering on these commitments in order to meet the Millenium
Development Goals.
We reaffirm our commitment to achieve these Goals, including health, education and water, to support the
Global Health Fund and to complete the Heavily-Indebted Poor Countries initiative. The fight against
global poverty calls for increased resources. Building on our recent announcements of increased resources
and on our discussions to date on financing instruments, including facilities, w e call for a report by
September. Equally, as set out in the document made public today, w e stress the importance of improving
the effectiveness of our bilateral and multilateral aid. including by focusing on poor countries committed to
reforms, setting and achieving measurable objectives, adopting growth-oriented policies and reducing
transaction costs of assistance. W e are also committed to promoting good governance, improved
transparency and publicfinancialmanagement and thefightagainst corruption. W e will review progress
next year. W e recognize the importance of rules-based trade in driving economic growth and poverty
reduction. Building on Nepad, w e agree that Africa must become more integrated into the global economy
and w e will leverage the benefits for Africa of our trade commitments. W e look forward to the results of
LFIs" study of market-based mechanisms to reduce the impact of short-term commodity price volatility.
FINAL
A n n e x to the Deauville c o m m u n i q u e
A new Paris Club approach to debt restructuring
The Paris Club of official creditors is a central element of the existing framework for crisis resolution. In
the context of the current efforts to m a k e the resolution of crises more orderly, timely and predictable, the
Paris Club can m a k e a contribution.
The debt of heavily indebted poor countries is already addressed under an existing international initiative
For other countries experiencing serious debt problems, Finance Ministers encourage the Paris Club to
improve its methods. They endorse appropriate action to achieve lasting debt sustainability, while ensuring
that debt restructuring remains the last resort. Given the need to preserve access to private capital, the Paris
Club should tailor its response to the specific financial situation of each country rather than defining
standard terms under this n e w approach.
When a country approaches the Paris Club, the sustainability of its debt would be reviewed and analysed in
coordination with the IMF. For a country, which has unsustainable debt and is committed to policies that
will avoid a return to the Paris Club, as well as to seeking comparable treatment from its other external
creditors, including the private sector, the Paris Club would define a process to provide debt relief in
stages. These stages would be designed to have a strong link with economic performance and public debt
management. A satisfactory track record in implementing an I M F program and in paying Paris Club
creditors would be needed, after which the debt restructuring would be carried out in several steps linked to
I M F conditionality.
Under this approach, the Paris Club could draw on a wide range of options to facilitate the return to debt
sustainability, including:
• debt reduction in exceptional cases when its need is clearly demonstrated,
• an active policy of adjusting the "cut-off date" (claims contracted after that date are not
eligible for restructuring in the Paris Club),
• over time, use of flexible instruments such as debt buybacks and swaps.
In this context, coordination between official and other creditors, notably private creditors, is particular
important. The Paris Club has taken a number of steps to increase transparency of its procedures over the
past years notably through meetings with private sector representatives and the information provided on its
web site. This dialogue should continue and could take the form of early discussions with the private sector
on the issue of the comparability of treatment of their respective claims.
Finance Ministers urge the Paris Club to adopt such an approach in future restructuring cases and will
review its implementation in Spring 2004.
JS-407: Secretary John Snow Statement on the House-Senate Conference agreementon th... Page 1 of
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-407
Treasury Secretary John Snow Statement
on the House-Senate Conference agreement
on the Jobs & Growth Package
The historic agreement between the House and the Senate on the President's Jobs
and Growth Plan is a great victory for hardworking Americans. The Agreement will
give the economy the boost it needs to grow and create jobs so that millions of
Americans can be more secure and confident, both now and in the future.
It contains all the elements of the President's plan. American families wilJ benefit
from speeding up the income tax rate reductions, increasing the child credit, and
providing marriage penalty relief. Small businesses will get help by reducing tax
rates on owners and entrepreneurs, and by dramatically increasing the amount they
can deduct when buying new equipment. This will create and secure jobs.
It dramatically reduces the tax on dividends and investment. This will have a
profoundly positive effect on job creation, corporate accountability, and the well
being of all Americans. It removes barriers to higher economic growth, and
represents an investment in the American people and their prosperity.
This bill is good for American workers, it is good for American families, it is good for
American investors and it is good for American entrepreneurs and small business
owners.
With agreement on President Bush's Jobs and Growth plan, the elements are there
for the economy to continue its recovery in the second half of the year.
I urge Congress to send this bill to the President's desk as quickly as possible. The
economy can't wait another day to get the boost it needs.
http ://www.treas. eov/nress/releases/j s 4 0 7 .htm
7/29/2003
JS-408: Tax Provisions of the Jobs and Growth Tax Relief Reconciliation Act of 2003
Page 1 ot
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-408
Tax Provisions of the Jobs and Growth
Tax Relief Reconciliation Act of 2003
Accelerated 10-Percent Bracket Expansion: The expansion of the 10-percent
bracket scheduled for 2008 is accelerated to apply in 2003 and 2004. The endpoint
of the 10-percent tax bracket increases from $12,000 of taxable income to $14,000
for married couples (and from $6,000 to $7,000 for single taxpayers). This
expansion benefits married taxpayers with taxable income over $12,000 and single
taxpayers with taxable income over $6,000. Tax Relief: C Y 2003: $5 billion.
Accelerated Reduction in Income Tax Rates: The reductions in income tax rates in
excess of 15-percent scheduled for 2004 and 2006 are accelerated to 2003,
resulting in new rates of 2 5 % , 2 8 % , 3 3 % and 3 5 % (from 2 7 % , 3 0 % , 3 5 % and
38.6%). These reductions benefit married couples with taxable income greater than
$47,450 and single taxpayers with taxable income greater than $28,400. Tax
Relief: C Y 2003: $29 billion.
Accelerated Reduction of Marriage Penalty: The standard deduction for married
couples is increased to double the amount of the standard deduction for single
taxpayers in 2003 and 2004. The width of the 15-percent tax bracket for married
couples is increased to twice the width for single taxpayers in 2003 and 2004.
These provisions were scheduled to phase-in over the period between 2005 and
2009. These reductions benefit married couples who claim the standard deduction
or who have taxable income greater than $47,450. Tax Relief: C Y 2003: $19 billion.
Accelerated Increase in Child Tax Credit: The amount of the child tax credit is
increased to $1,000 in 2003 and 2004 (from $600), accelerating a scheduled
phase-in over the period between 2005 and 2010. In 2003, the increased amount
of the child tax credit will be paid in advance beginning in July 2003 on the basis of
information on the taxpayer's 2002 tax return filed in 2003. Advanced payments will
be m a d e in a manner similar to the advance payment checks that were issued in
2001 to reflect the new 10-percent tax bracket. Tax Relief: C Y 2003: $16 billion.
Reduction in Tax Rates on Dividends and Capital Gains: The maximum tax rate on
dividends paid by corporations to individuals and on individuals' capital gains is
reduced to 1 5 % in 2003 through 2008. For taxpayers in the 1 0 % and 1 5 % ordinary
income tax rate brackets, the rate on dividends and capital gains is reduced to 5 %
in 2003 through 2007, and to zero in 2008.
The new rates apply to capital gains realized on or after May 6, 2003, and to
dividends received in 2003 and after. This provision reduces the double taxation of
corporate earnings. Tax Relief: C Y 2003: $8 billion.
Increase in Small Business Expensing for New Investment: The amount of
investment that may be immediately deducted by small businesses is increased
from $25,000 to $100,000 beginning in 2003. The amount of investment qualifying
for this immediate deduction begins to phase out for small businesses with
investment in excess of $400,000 (increased from $200,000). Both parameters are
indexed for inflation beginning in 2004. These changes are effective for taxable
years beginning in 2003, 2004, and 2005. Tax Relief: C Y 2003: $3 billion.
htto : / / w w w trea s POv/nress/releases/i s408 .htm
7/29/2003
JS-408: Tax Provisions of the Jobs and Growth Tax Relief Reconciliation Act of 2003
Page 2 of 2
Increase in First-Year Bonus Depreciation: The additional first-year bonus
depreciation deduction is increased from 30 percent to 50 percent for investments
acquired and placed in service after M a y 5, 2003 and before January 1, 2005.
Taxpayers m a y also continue to use 30 percent bonus depreciation for property
acquired and placed in service before January 1, 2005. Tax Relief: C Y 2003: $20
billion.
AMT Hold-Harmless Relief: To ensure that the benefits from the acceleration of the
tax reductions are not reduced by the A M T , the A M T exemption amount is
increased by $9,000 for married taxpayers and by $4,500 for single taxpayers in
2003 and 2004. Tax Relief: C Y 2003: $9 billion.
Total Tax Relief: CY 2003 $109 billion.
http://www.treas.gov/press/releases/js408.htm
7/29/2003
JS-409: Distribution Table for the Jobs and Growth Tax Relief Reconciliation Act of 2003
Page 1 ot
F R O M T H E OFFICE O F PUBLIC AFFAIRS
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May 22, 2003
JS-409
Distribution Table for
the Jobs and Growth Tax Relief
Reconciliation Act of 2003
Attached is a table prepared by the Department of the Treasury that shows the
distributional effects of the major individual income tax provisions in the Jobs and
Growth Tax Relief Reconciliation Act of 2003. The effects are shown for the Act in
2003.
The average income tax reduction ranges from more than 15 percent for taxpayers
with income under $30,000 to about 11 percent for taxpayers with income over
$100,000. The average income tax reduction across ail income groups is 11.9
percent.
Because the percentage reduction in income taxes is greatest for families with
incomes under $50,000, these families will pay a smaller share of the total income
tax burden under the Act than they do under current law (compare the distribution
of total individual income taxes under 2003 law and under the Act).
Conversely, families with income of $100,000 or more receive a smaller than
average percentage reduction in income taxes so they will pay a larger share of the
total income tax burden under the Act than they do under current law. Under the
Act, the share of income taxes paid by families with income of $100,000 or more
will rise to 73.3 percent.
The table also presents the average individual income taxes paid for the
representative income groups under the Jobs and Growth Tax Relief Reconciliation
Act of 2003. Under the Act, those in the lowest income group (under $30,000) will
on average receive refundable credits in excess of tax payments of $411 and those
in the second lowest income group will pay an average of $1,012 in income tax.
Those earning over $200,000 will on average pay approximately $99,000 in income
taxes.
Related Documents:
• Jobs and Growth Tax Relief
http://wwwtreas.eov/Dress/releases/js409.htm
7/29/2003
Jobs and Growth Tax Relief Reconciliation Act of 2003
(Relative to Major Individual Income Tax Provisions in Effect in 2003)
(2000 Income Levels)
Cash
Income
Class2
0-30
30-40
40-50
50-75
75-100
100-200
200 & over
Total
Distribution of
Changes in
Individual
Income Taxes
(%\
Distribution of Total
Individual income Taxes
2003
With
Law
(%\
Acf
Act
(S\
(%)
25
3.3
4.3
-20
21
3.7
-2.6
10.8
25.5
40.5
11.6
12.1
27.6
44.8
100.0
100.0
129
Average
Individual
Income Taxes
With
Percent Change
in Individual
Income
Taxes
t%\
-15.5
-19.3
-14.0
-11.1
11.7
12.0
27.9
45.4
-411
1,012
2,257
4,313
7,582
15,902
99,472
-10.8
100.0
6,127
-11.9
1.9
3.6
Department of the Treasury
Office of Tax Analysis
-127
-11.0
M a y 22, 2003
The provisions of the Act included are: i) accelerate to 2003 the reductions in income tax rates above 1 5 % scheduled for 2004 and 2006; ii)
accelerate to 2003 the increase in the width of the 1 0 % bracket for single and joint filers scheduled for 2008; iii) accelerate to 2003 the increase in
the standard deduction and the width of the 1 5 % bracket for joint filers scheduled to phase in between 2005 and 2009; iv) accelerate to 2003 the
increase in the child credit from $600 to $1,000 scheduled to phase in between 2005 and 2010; v) an increase in the A M T exemption amounts;
and vi) a reduction in the tax rates on dividends and capital gains to 5 % (for taxpayers in the 1 0 % and 1 5 % ordinary income tax brackets) and to
1 5 % (for taxpayers in higher ordinary income tax brackets).
2
Cash Income consists of wages and salaries, net income from a business or farm, taxable and tax-exempt interest, dividends, rental income,
realized capital gains, cash transfers from the government, and retirement benefits. Employer contributions for payroll taxes and the federal
corporate income tax are added to place cash on a pre-tax basis. Cash income is shown on a family rather than on a tax return basis. The cash
incomes of all members of a family are added to arrive at a family's cash income used in the distributions.
3
The refundable portions of the earned income tax credit (EITC) and the child credit are included in the individual income tax. Individual income
taxes are estimated at 2000 income levels under 2003 law as if it were fully phased in law, so exclude provisions that expire prior to the end of the
Budget period (ignoring the sunset of E G T R R A in 2011) and are adjusted for the effects of unindexed parameters.
The change in individual income taxes under the Act is estimated at 2000 income levels as if the change represented fully phased in law
(ignoring the sunset of E G T R R A in 2011).
Families with negative incomes are excluded from the lowest income class but included in the total line.
JS-410: Effects of Major Individual Income Tax Relief provisions in Jobs
Page 1 of
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-410
Effects of Major Individual Income Tax Relief
provisions in Jobs and Growth Tax Relief Reconciliation Act of 2003
In 2003, 91 million taxpayers will receive, on average, a tax cut of $1,126 under the
Jobs and Growth Act of 2003.
• 68 million women will see their taxes decline, on average, by $1,338.
• 45 million married couples will receive average tax cuts of $1,786.
• 34 million families with children will benefit from an average tax cut of $1,549.
• 6 million single w o m e n with children will receive an average tax cut of $558.
• 12 million elderly taxpayers will receive an average tax cut of $1,401.
• 23 million small business owners will receive tax cuts averaging $2,209.
• 3 million individuals and families will have their income tax liability completely
eliminated by the Act.
Each of the provisions in the Jobs and Growth Act of 2003 will benefit millions of
taxpayers.
• Accelerating the 2004 and 2006 rate cuts in 2003 will provide 32 million taxpayers
with an average tax cut of $1,060.
• Accelerating the expansion of the 10 percent rate bracket will reduce taxes for 69
million taxpayers, on average, by $76.
• Enacting marriage penalty relief in 2003 will reduce taxes for 34 million married
couples by an average of $589.
• Increasing the child tax credit to $1,000 in 2003 will provide 26 million families with
an average tax cut of $623.
• Lowering the tax rates on capital gains and dividend income will reduce taxes for
26 million taxpayers with income from these two sources by an average of $798.
A m o n g those with tax cuts will be 7 million elderly taxpayers whose taxes will
decline, on average, by $1,088.
Background
This analysis is based on the following provisions:
• Acceleration of the 2004 and 2006 rate cuts to 2003.
• Reduction in marriage penalties through the acceleration of increases in the
standard deduction from 2009 to 2003 and the width of the 15 percent rate bracket
for joint filers from 2008 to 2003.
• Acceleration of the increase in the width of the 10 percent rate bracket for single
and joint filers from 2008 to 2003.
• Acceleration of the increase to $1,000 in the child tax credit from 2010 to 2003
(except for advanced rebate).
• Lowering the tax rate on dividends and capital gains to 15 percent (5 percent for
the lowest two rate brackets).
• An increase in the alternative minimum tax (AMT) exemption level.
•
The analysis above does not include the effects of two business provisions in the
Act:
• Small businesses will benefit from an increase in the maximum amount of
investment in equipment that they can expense from $25,000 to $100,000.
• Businesses will benefit from an increase in the first-year bonus depreciation
deduction from 30 percent to 50 percent for qualified investments.
http : / / w w w rreas. gov/nress/releases/j s410.htm
7/29/2003
JS-410: Effects of Major Individual Income Tax Relief provisions in Jobs
Page 2
Office of Tax Policy
May 22, 2003
http://www.treas.gov/press/releases/js410.htm
7/29/2003
JS-411: Examples of Tax Relief in 2003 under the Jobs and Growth Tax Relief Reconcili... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
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May 22, 2003
JS-411
Examples of Tax Relief in 2003
under the
Jobs and Growth Tax Relief Reconciliation Act of 2003
Example 1: A married couple with one child and income of $40,000 will see their
taxes decline under the Jobs and Growth Tax Relief Reconciliation Act of 2003 by
$732 (from $2,235 to $1,503) in 2003, a decline of 33 percent.
Example 2: A married couple with two children and income of $40,000 will see their
taxes decline under the Jobs and Growth Tax Relief Reconciliation Act of 2003 by
$1,133 (from $1,178 to $45) in 2003, a decline of 96 percent.
Example 3: A married couple with two children and income of $60,000 will see their
taxes decline under the Jobs and Growth Tax Relief Reconciliation Act of 2003 by
$900 (from $3,750 to $2,850) in 2003, a decline of 24 percent.
Example 4: A married couple with two children and income of $75,000 will see their
taxes decline under the Jobs and Growth Tax Relief Reconciliation Act of 2003 by
$1,122 (from $5,817 to $4,695) in 2003, a decline of 19 percent.
Example 5: A married couple, both aged 65, with income of $40,000 (of which
$2,000 is dividends and $15,000 is Social Security benefits) will see their taxes
decline under the Jobs and Growth Tax Relief Reconciliation Act of 2003 by $255
(from $930 to $675) in 2003, a decline of 27 percent.
Example 6: A married couple, both aged 65, with income of $80,000 (of which
$4,500 is dividends and $20,000 is Social Security benefits) will see their taxes
decline under the Jobs and Growth Tax Relief Reconciliation Act of 2003 by $1,677
(from $9,107 to $7,430) in 2003, a decline of 18 percent.
Detailed examples are attached.
Related Documents:
• Tax Relief in 2003
http://www.treas.gov/press/releases/js411 .htm
7/29/2003
Tax Relief in 2003
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
E x a m p l e 1: Married Couple with O n e Child and Income of $40,000
Current
Law
Total Income (= A G I )
Less: Deductions (Larger of Standard or Itemized1)
Less: Personal Exemptions (3 @ $3,050)
Taxable Income
Federal Income Tax Before Credits
Less: Child Tax Credit
Federal Income Tax After Credits
Growth
Package
40,000
40,000
7,950
9,150
9,500
9,150
22,900
21,350
2,835
2,503
600
1,000
2,235
1,503
Tax Change: Amount
-733
-33%
Percent
Department of the Treasury
Office of Tax Analysis
M a y 22,2003
Itemized deductions are assumed to be 18 percent of A G I under current law.
Composition of T a x Reduction :
Acceleration of 10-Percent Rate Bracket Expansion
Accleration of Increase in Child Tax Credit
Acceleration of Reduction in Marriage Penalty
100
400
233
(larger standard deduction for joint filers)
Total
2
733
Due to possible interactions among items in the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the tax reduction attributable to each provision may
depend on the order in which the tax reductions are calculated. The composition of
the tax reductions in this example is based on the order of the provisions as shown.
Tax Relief in 2003
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
Example 2: Married Couple with T w o Children and Income of $40,000
Current
Law
Growth
Package
Total Income (= A G I )
40,000
40,000
Less: Deductions (Larger of Standard or Itemized1)
Less: Personal Exemptions (4 @ $3,050)
7,950
12,200
9,500
12,200
Taxable Income
19,850
18,300
Federal Income Tax Before Credits
2,378
2,045
Less: Child Tax Credit
1,200
2,000
Federal Income Tax After Credits
1,178
45
Tax Change: Amount
-1,133
Percent
-96%
Department of the Treasury
Office of Tax Analysis
M a y 22,2003
Itemized deductions are assumed to be 18 percent of A G I under current law.
Composition of T a x Reduction :
Acceleration of 10-Percent Rate Bracket Expansion
Accleration of Increase in Child Tax Credit
Acceleration of Reduction in Marriage Penalty
100
800
233
(larger standard deduction for joint filers)
Total
2
1,133
Due to possible interactions among items in the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the tax reduction attributable to each provision may
depend on the order in which the tax reductions are calculated. The composition of
the tax reductions in this example is based on the order of the provisions as shown.
Tax Relief in 2003
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
Example 3: Married Couple with Two Children and Income of $60,000
Current
Law
Growth
Package
Total Income (= AGI)
60,000
60,000
Less: Deductions (Larger of Standard or Itemized )
Less: Personal Exemptions (4 @ $3,050)
10,800
12,200
10,800
12,200
Taxable Income
37,000
37,000
Federal Income Tax Before Credits
4,950
4,850
Less: Child Tax Credit
1,200
2,000
Federal Income Tax After Credits
3,750
2,850
Tax Change: Amount
Percent
Department of the Treasury
Office of Tax Analysis
1
-900
-24%
M a y 22, 2003
Itemized deductions are assumed to be 18 percent of AGI under current law.
Composition of Tax Reduction :
Acceleration of 10-Percent Rate Bracket Expansion
Accleration of Increase in Child Tax Credit
Total
2
100
800
900
Due to possible interactions among items in the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the tax reduction attributable to each provision may
depend on the order in which the tax reductions are calculated. The composition of
the tax reductions in this example is based on the order of the provisions as shown.
Tax Relief in 2003
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
Example 4: Married Couple with Two Children and Income of $75,000
Current
Law
Growth
Package
Total Income (= AGI)
75,000
75,000
Less: Deductions (Larger of Standard or Itemized1)
Less: Personal Exemptions (4 @ $3,050)
13,500
12,200
13,500
12,200
Taxable Income
49,300
49,300
Federal Income Tax Before Credits
7,017
6,695
Less: Child Tax Credit
1,200
2,000
Federal Income Tax After Credits
5,817
4,695
Tax Change: Amount
-1,122
Percent
-19%
Department of the Treasury
Office of Tax Analysis
May 22,2003
Itemized deductions are assumed to be 18 percent of A G I under current law.
Composition of T a x Reduction :
Acceleration of 10-Percent Rate Bracket Expansion
Accleration of Increase in Child Tax Credit
Acceleration of Tax Rate Reductions (rates above 15 percent)
Acceleration of Reduction in Marriage Penalty
100
800
37
185
(larger 15-percent tax bracket for joint filers)
Total
2
1,122
Due to possible interactions among items in the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the tax reduction attributable to each provision may
depend on the order in which the tax reductions are calculated. The composition of
the tax reductions in this example is based on the order of the provisions as shown.
Tax Relief in 2003
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
Example 5: Married Couple, Both Aged 65, with Income of $40,000
Current
Growth
Law
Package
Taxable Pensions and Interest
23,000
23,000
Dividends
Social Security Benefits
2,000
15,000
2,000
15,000
Total Income
40,000
40,000
Less: Nontaxable Social Security benefits
14,750
14,750
AGI
25,250
25,250
Less: Deductions (Larger of Standard or Itemized1) 9,850
6,100
Less: Personal Exemptions (2 @ $3,050)
11,400
6,100
9,300
7,750
930
675
Taxable Income
Federal Income Tax
-255
Tax Change: Amount
-27%
Percent
Department of the Treasury
Office of Tax Analysis
1
May 22,2003
Itemized deductions are assumed to be 18 percent of AGI under current law.
Composition of T a * Reduction :
Acceleration of Reduction in Marriage Penalty
155
(larger standard deduction for joint filers)
Lower tax rate on dividends
100
Total
255
2
Due to possible interactions among items in the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the tax reduction attributable to each provision may
depend on the order in which the tax reductions are calculated. The composition of
the tax reductions in this example is based on the order of the provisions as shown.
Tax Relief in 2003
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
Example 6: Married Couple, Both Aged 65, with Income of $80,000
Current
Law
Growth
Package
Taxable Pensions and Interest
Dividends
Social Security Benefits
55,500
4,500
20,000
55,500
4,500
20,000
Total Income
80,000
80,000
3,000
3,000
AGI
77,000
77,000
Less: Deductions (Larger of Standard or Itemized1)
Less: Personal Exemptions (2 @ $3,050)
13,860
6,100
13,860
6,100
Taxable Income
57,040
57,040
9,107
7,430
Less: Nontaxable Social Security benefits
Federal Income Tax
Tax Change: Amount
Percent
Department of the Treasury
Office of Tax Analysis
-1,677
-18%
M a y 22, 2003
Itemized deductions are assumed to be 18 percent of AGI under current law.
Composition of T a x Reduction :
Acceleration of 10-Percent Rate Bracket Expansion
Acceleration of Tax Rate Reductions (rates above 15 percent)
Acceleration of Reduction in Marriage Penalty
(wider 15-percent tax bracket for joint filers)
Lower tax rate on dividends
Total
2
100
192
935
450
1,677
Due to possible interactions among items in the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the tax reduction attributable to each provision may
depend on the order in which the tax reductions are calculated. The composition of
the tax reductions in this example is based on the order of the provisions as shown.
JS-412: Advance Payments of an Increase in the Child Tax Credit under the Jobs and Gro... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-412
Advance Payments of an Increase in the Child Tax Credit
under the Jobs and Growth Tax Relief
Reconciliation Act of 2003
The Conference agreement accelerates the child tax credit from $600 to $1,000 per
child effective in 2003 and 2004.
This year, a typical family with one child will receive a check for $400. A typical
family with two children will receive a check for $800.
Eligible taxpayers would receive an average tax cut of $623 each year as a result of
the increase in the child tax credit.
For 2003, the increased amount of the child tax credit will be paid in advance to
taxpayers who claimed a child tax credit on their 2002 tax return.
o Approximately 25 million families will receive checks totaling $14 billion.
o Advance payment checks will be sent out beginning in mid-July over a period of
three weeks.
The amount of advance payments will be based on taxpayers' 2002 filing status
and income, as well as the number of children claimed on their 2002 tax return who
will still be under age 17 in 2003.
http://www.treas.gov/press/releases/js412.htm
7/29/2003
JS-413: Provisions in Jobs and G r o w t h T a x Relief Reconciliation Act of 2 0 0 3 for Small B... Page 1 of 2
F R O M THE OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-413
Provisions in Jobs and Growth Tax Relief
Reconciliation Act of 2003 for Small Business Owners
• By accelerating tax reductions that were enacted in the 2001 tax act, the
Jobs and Growth Tax Relief Reconciliation Act would provide small
business owners with much needed assistance.
• 23 million small business owners would receive tax cuts averaging
$2,209.
• Accelerating the reduction in the top marginal rate scheduled to take
effect in 2006 (to 3 5 % ) to 2003 would help small businesses.
• Owners of flow-through entities, including small business owners and
entrepreneurs, comprise two-thirds (about 400,000) of the 600,000 tax
returns that would benefit from accelerating the reduction in the top tax
bracket scheduled for 2006 to 2003.
• These small business owners would receive 79% (about $9.7 billion) of
the $12.4 billion in tax relief from accelerating the reduction in the top tax
bracket to 3 5 % from 2006 to 2003.
• The increase in the expensing for new investment would encourage small
business owners to purchase the technology, machinery, and other
equipment they need to expand.
• The amount of investment that may be immediately deducted by small
businesses would quadruple from $25,000 to $100,000 beginning in 2003.
The amount of investment qualifying for this immediate deduction will begin
to phase out for small businesses with investment in excess of $400,000
(doubled from $200,000). Both parameters are indexed for inflation
beginning in 2004. Computer software would be eligible for expensing.
The provision sunsets after December 31, 2005.
• The increase in expensing provides incentives for small businesses to
grow.
• Small business owners who purchase equipment to grow and expand will
get assistance through this provision. The increase in expensing
encourages capital investment by small businesses.
• Tax compliance and record-keeping burdens would be simplified by
allowing m a n y small businesses to avoid the inherent complexity of
depreciation provisions.
Office of Tax Policy
M a y 22, 2003
http ://www.treas. eov/press/releases/j s413 .htm
7/29/2003
JS-414: Reduction in Individual T a x Rates on dividends and Capital Gains under the Jobs... Page 1 of 1
F R O M THE OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-414
Reduction in Individual Tax Rates on dividends and Capital Gains
under the Jobs and Growth Tax Relief Reconciliation Act of 2003
The m a x i m u m tax rate on dividends paid by corporations to individuals and
on individuals' capital gains is reduced to 1 5 % in 2003 through 2008. For
taxpayers in the 1 0 % and 1 5 % ordinary income tax rate brackets, the rate
on dividends and capital gains is reduced to 5 % in 2003 through 2007, and
to zero in 2008. The new rates apply to capital gains realized on or after
M a y 6, 2003, and to dividends received in 2003 and after.
This provision reduces the double taxation of corporate earnings. Taxes
are reduced for 26 million taxpayers with income from dividends and capital
gains by an average of $798.
Among those with tax cuts will be 7 million elderly taxpayers whose taxes
will decline, on average, by $1,088.
http ://www. treas. so v/nress/releases/j s414.htm
7/29/2003
JS-415: Effects of the Bonus Depreciation Provision in the Jobs and Growth Tax Relief
Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-415
Effects of the Bonus Depreciation Provision
in the Jobs and Growth Tax Relief Reconciliation Act of 2003
Increase incentives for businesses to grow:
• The bill increases the additional first-year "bonus" depreciation deduction
from 30 percent to 50 percent for qualified investments m a d e after May 5,
2003. It also extends the sunset date for investment to qualify for bonus
depreciation from September 11, 2004 to December 31, 2004.
• Benefits of the bonus depreciation provision:
o Provides an immediate investment stimulus by increasing the rate of
bonus depreciation by 67 percent. Businesses that invest to grow
and expand will get assistance through this provision.
o Provides an investment stimulus for projects that require a longer
lead time for planning and production by extending the qualifying
period for bonus depreciation.
http ://www. treas^gov/Dress/releases/j s415 .htm
7/29/2003
JS-416: Withholding Changes Under the Jobs and Growth Tax Relief Reconciliation Act... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-416
Withholding Changes
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003
Workers will not need to take any action to have their withholding adjusted.
• Their paychecks should reflect the tax relief as soon as employers and payroll
processors implement the new withholding tables.
• Employers should implement the withholding reductions as soon as they
receive the new withholding materials.
Revised withholding information will be:
o Posted on the IRS web site on date the bill is signed.
o
Mailed to all employers by mid-June.
http ://www, treas. go v/press/releases/j s416 .htm
7/29/2003
JS-417: State-By-State Breakdown of the Jobs and Growth Tax Relief Reconciliation Act... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 22, 2003
JS-417
State-By-State Breakdown of
the Jobs and Growth Tax Relief Reconciliation Act of 2003
The table attached estimates the number of taxpayers by state that would benefit
from the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The Act will:
• Reduce Taxes
• Accelerate the 10-Percent Bracket Expansion
• Accelerate the Reduction in Income Tax Rates
• Accelerate the Reduction in Marriage Penalty
• Accelerate the Increase in Child Tax Credit
• Provide a Reduced Individual Tax Rate for Corporate Dividends and Capital
Gains
Attachment:
Related Documents:
• Siate-by-State Table & Footnotes
http://www.treas.i-:
press teleases/js417.htm
7/29/2003
JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003
STATE-BY-STATE DISTRIBUTION
BASED ON NUMBER OF RETURNS FILED IN 2002 THAT WOULD HAVE
BENEFITED FROM THE ACT
fin thousands)
SnM- fir Prnvkinnc nf Art
Accelerate
Accelerate
Entire Jobs
Accelerate Reduction in Reduction of
and Growth 1 0 % Bracket
TOD
Marriaee
Art'
United States
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Fvnansinn
from Act
26.736
35.050
25346
25.497
20.989
1.199
862
176
273
74
499
86
403
59
309
67
262
64
1 si8
1 167
477
610
447
419
ill
706
508
133
304
231
10369
7.953
3.651
3.976
2.823
175
3.171
174
2.729
1.526
1.240
1.216
507
487
88
602
486
105
399
313
77
453
403
78
1373
685
430
304
53
1.164
568
109
112
885
426
256
-iii
272
982
212
5.069
2.457
3.779
1.820
1.332
1.890
1.432
725
950
759
404
379
317
288
111
78
155
173
108
117
4.035
1.947
3.104
1.524
1336
1.563
1.139
932
740
498
208
814
402
582
275
110
99
1.190
528
246
846
217
258
266
92
715
367
500
448
171
705
251
349
389
119
521
234
305
297
109
575
224
263
275
114
421
862
549
911
468
78
248
727
922
505
69
167
569
648
433
92
152
470
660
52
389
590
66
419
1.459
Massachusetts
Michigan
Minnesota
Montana
MississiDDi
2 J12
3.194
1.734
1.868
2.497
1.408
268
690
202
474
Missouri
North Carolina
North Dakota
Nebraska
Nevada
1.736
2.472
1331
1.856
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
anri niviHpnHc
Crpriit
68.521
1.891
N e w HamDshire
N e w Jersev
N e w Mexico
N e w York
Ohio
Pensilfv
89.711
660
887
814
327
Kansas
Kentucky
Louisiana
Maine
Marvland
R«*M
Accelerate Reduced Tax
Increase in
Rates on
Child Tax CaDital Gains
Addendum:
Returns with
Business
Income
Benefiting
1.167
1.150
881
996
540
51
134
1311
713
114
269
200
157
439
628
38
715
85
512
769
57
^'l
414
17S
711
160
147
1S7
709
546
197
256
199
189
143
1.002
466
179
ISO
197
17.1
119
117
2.955
2J273
1.175
1.150
954
145
655
144
540
395
134
215
775
163
sons
4 190
7 041
7 0S6
1 SQ4
1 767
1 164
3.880
3.084
1.084
1344
992
1.036
773
9SS
709
70S
411
797
748
7S6
1.095
3.989
856
296
450
308
3.117
1.107
1.603
1.116
302
1.117
289
824
ISO
^79
107
117
97
99
84
1.169
862
271
455
373
301
256
711
ixn
44
98
69
60
7S
1.688
6.052
1.252
4.426
382
690
527
1.708
2.439
1.837
439
1.690
384
1.442
6S6
IS?
178
171
52
ion
83
707
210
sn8
168
56
57
62
741s
1 91S
817
980
661
777
S76
2.030
1.844
1.619
1.494
641
497
825
761
556
517
586
510
477
405
.18.1
167
97
717
147
171
97
161
127
39
69
47
44
49
DC
707
16
47
60
47
576
isn
410
87
Other Areas
153
173
110
186
103
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Wisconsin
West Virginia
Wvomine
Notes and footnotes appear on following page.
5-22-03
Notes
Thefiguresin the table are based on tabulations of all individual income tax returns filed and processed through the IRS Individual
Master File ('IMF) during calendar year 2002. Most returnsfiledin 2002 were for tax year 2001.
Classification by state was based on the address used on the return. Usually this address is the taxpayer's home address. However,
some taxpayers m a y have used the address of a tax attorney or accountant, or a place of business, and that address could be in a different
state than the taxpayer's home.
Footnotes
The number of returns benefiting from each of the specific provisions shown may not add to the number benefiting from the entire
package because some returns will benefit from more than one provision. In addition to the provisions shown separately, the Act
includes an increase in exemption levels for the alternative m i n i m u m tax ( A M T ) .
Only returns with capital gains and dividend income are included. Returns reporting no such income can also benefit from the
provision because they will receive higher returns on other investments.
Returns with business income are those that report at least one dollar of income or loss from a sole proprietorship, farm
proprietorship, partnership, S corporation, and or rental income.
JS-418: The Jobs & Growth Tax Relief Reconciliation Act of 2003 will Provide Benefits t... Page 1 of 2
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 22, 2003
JS-418
The Jobs & Growth Tax Relief Reconciliation Act of 2003 will
Alabama Taxpayers
This is an example of how the state table can be interpreted.
REDUCING TAXES
• 1,200,000 taxpayers in Alabama will have lower income tax bills in 2003
under the Jobs and Growth Tax relief Reconciliation Act of 2003.
• More than 260,000 business taxpayers can use their tax savings to invest in
new equipment, hire additional workers, and increase pay.
A C C E L E R A T E 10-PERCENT B R A C K E T EXPANSION
• More than 860,000 married couples and single filers will benefit from the
acceleration to 2003 of the expansion of the 10-percent bracket scheduled
for 2008.
ACCELERATE REDUCTION IN INCOME TAX RATES
• More than 270,000 taxpayers in Alabama will benefit from the acceleration
to 2003 of the reductions in income tax rates in excess of 15-percent
scheduled for 2004 and 2006.
A C C E L E R A T E R E D U C T I O N IN M A R R I A G E P E N A L T Y
• Just under 500,000 married couples in Alabama will benefit from the
acceleration to 2003 of provisions that increase the standard deduction for
joint filers to double the amount for single filers and increase the width of the
15-percent bracket to twice the width for single filers. These two provisions
were scheduled to phase in between 2005 and 2009.
A C C E L E R A T E INCREASE IN CHILD T A X CREDIT
• More than 400,000 married couples and single parents in Alabama will
benefit from the acceleration to 2003 of the increase in the child tax credit
from $600 to $1,000 that was scheduled to phase in between 2005 and
2010.
EXCLUSION F O R C O R P O R A T E DIVIDENDS
• More than 300,000 taxpayers in Alabama will benefit from the reduced tax
rates on capital gains and dividends.
http://www trpfls <ynv/nress/releases/js418.htm
7/29/2003
JS-418: T h e Jobs & Growth Tax Relief Reconciliation Act of 2003 will Provide Benefits t... Page 2
S O U R C E : Counts are for the number of returns filed in 2002 that would
have benefited from the package. These estimates are based on
tabulations from all individual income tax returns processed by the Internal
Revenue Service in 2002. Most of these returns covered tax year 2001.
http://www.treas.go^ press relcases/js418.htm
7/29/2003
JS-419: Finance Ministers* Statement Deauville, M a y 17th, 2003
FROM THE OFFICE OF PUBLIC AFFAIRS
May 17, 2003
JS-419
Finance Ministers' Statement
Deauville, M a y 17th, 2003
We met today ahead of the Evian Summit. While major downside risks have
receded, our economies continue to face many challenges. W e are nonetheless
confident in the potential for stronger growth. Our task is to realise this potential.
W e will therefore continue to cooperate to achieve higher growth in all of our
economies, while ensuring domestic and external sustainability, and thereby to
contribute to global economic growth. W e are strengthening our commitments to
structural reforms and sound macroeconomic policies.
As we face a common challenge of ageing, our contribution to higher worldwide
growth should rely more strongly on a good system of education and life-long
learning, research and development, innovation and entrepreneurship, on the
foundation of a sustainable fiscal and monetary framework. Europe will continue to
foster innovation and to accelerate labour, product and capital market reforms so as
to achieve a more flexible economy. The U S will act to create jobs and to
encourage savings and investment by the private sector. Japan will continue its
structural reforms, including in itsfinancialand corporate sectors, and intensify its
efforts to combat deflation. Canada will maintain monetary prudence and fiscal
balance, while investing in productivity. Russia, which has greatly improved its
performance, will pursue structural reforms, in particular in the financial sector.
To bolster investor confidence, we will continue to reinforce corporate governance
practices, market discipline, transparency and regulation in line with the principles
agreed in February. W e welcome the work program agreed by the Financial
Stability Forum in Berlin on potential financial vulnerabilities and corporate
governance and related matters, including rating agencies and financial analysts,
and will review the results of this work in September. W e have agreed to appoint
Roger Ferguson as F S F Chair. W e favour the emergence, through open and public
processes involving the private sector, of high-quality internationally recognized
accounting standards that are applied, interpreted and enforced, with due regard to
financial stability concerns. W e will closely monitor the on-going work on Basel II
and will review the issue at our next meeting in September. W e also encourage
voluntary private sector initiatives that foster and complement such international
efforts to promote corporate social and environmental responsibility as the O E C D
guidelines for Multinational Enterprises and the U N Global Compact principles.
We reaffirm our strong commitment to combat terrorist financing. We call on the
Financial Action Task Force to deepen its engagement with the U N and the
International Financial Institutions, to foster worldwide compliance with international
standards against terrorist financing and delivery of related technical assistance.
W e look forward to further work on the misuse of alternative remittance systems
and non-profit organisations and to developing more effective freezing regimes. W e
welcome the progress achieved by the IMF, the World Bank and the F A T F on the
pilot program of assessments and look forward to its evaluation. W e look forward to
revised F A T F recommendations by June, establishing an enhanced standard in the
fight against money laundering and financial crime.
We urge all OECD countries to implement the standards set out in the OECD's
2000 report on access to bank information and to ensure effective exchange of
information for tax purposes.
htto://w",w * ™ c
mv/wftc
s/releases/is419.h1m
^age
JS-419: Finance Ministers' Statement Deauville, M a y 17th, 2003
Page 2 of 3
W e reaffirm our commitment to strengthen our crisis prevention and resolution
measures through improved IMF surveillance, greater transparency and more
orderly, timely and predictable workouts of unsustainable debt. W e welcome Brazil,
South Africa and Uruguay's decisions to adopt collective action clauses following on
Mexico's lead, and w e encourage countries to adopt C A C s with terms that facilitate
debt restructuring. While keeping debt restructuring a last resort, w e have agreed
on a n e w Paris Club approach, as set out in the annex, for non-HIPC low- and
middle-income countries ready to follow an exit strategy and to seek comparable
treatment. W e welcome initiatives being taken, including issuers, private sector and
ourselves, on the development of a code of conduct. W e look forward to reviewing
progress in September.
We are at a turning point on development as on trade issues. We owe it to
developing countries to take up our responsibilities. First, w e need to raise
economic growth in our o w n economies. Second, within a predictable medium-term
framework, w e need to provide the developing countries the resources necessary to
support their commitment to implement structural and governance reforms, so as to
accelerate their growth and social progress. Third, w e are determined to achieve
the objectives and overall timetable set out in the Doha Development Agenda and
to ensure that the Cancun ministerial takes the decisions necessary to reach these
goals. Commitments taken must be fulfilled. It is our duty as much as it is to the
benefit of all. W e ask Francis Mer to report to the Heads of States and Government
in advance of the Evian summit on these issues, with a view to delivering on these
commitments in order to meet the Millenium Development Goals.
We reaffirm our commitment to achieve these Goals, including health, education
and water, to support the Global Health Fund and to complete the Heavily-Indebted
Poor Countries initiative. The fight against global poverty calls for increased
resources. Building on our recent announcements of increased resources and on
our discussions to date on financing instruments, including facilities, w e call for a
report by September. Equally, as set out in the document m a d e public today, w e
stress the importance of improving the effectiveness of our bilateral and multilateral
aid, including by focusing on poor countries committed to reforms, setting and
achieving measurable objectives, adopting growth-oriented policies and reducing
transaction costs of assistance. W e are also committed to promoting good
governance, improved transparency and public financial management and the fight
against corruption. W e will review progress next year. W e recognize the importance
of rules-based trade in driving economic growth and poverty reduction. Building on
Nepad, w e agree that Africa must become more integrated into the global economy
and w e will leverage the benefits for Africa of our trade commitments. W e look
forward to the results of IFIs' study of market-based mechanisms to reduce the
impact of short-term commodity price volatility.
Annex to the Deauville communique
A new Paris Club approach to debt restructuring
The Paris Club of official creditors is a central element of the existing framework for
crisis resolution. In the context of the current efforts to m a k e the resolution of crises
more orderly, timely and predictable, the Paris Club can m a k e a contribution.
The debt of heavily indebted poor countries is already addressed under an existing
international initiative. For other countries experiencing serious debt problems,
Finance Ministers encourage the Paris Club to improve its methods. They endorse
appropriate action to achieve lasting debt sustainability, while ensuring that debt
restructuring remains the last resort. Given the need to preserve access to private
capital, the Paris Club should tailor its response to the specific financial situation of
each country rather than defining standard terms under this n e w approach.
When a country approaches the Paris Club, the sustainability of its debt would be
reviewed and analysed in coordination with the IMF. For a country, which has
httn ://www.treas.^Qv/press/releases/i s419 .htm
7/29/?0fR
JS-419: Finance Ministers' Statement Deauville, M a y 17th, 2003
Page 3 of3
unsustainable debt and is committed to policies that will avoid a return to the Paris
Club, as well as to seeking comparable treatment from its other external creditors,
including the private sector, the Paris Club would define a process to provide debt
relief in stages. These stages would be designed to have a strong link with
economic performance and public debt management. A satisfactory track record in
implementing an IMF program and in paying Paris Club creditors would be needed,
after which the debt restructuring would be carried out in several steps linked to IMF
conditionality.
Under this approach, the Paris Club could draw on a wide range of options to
facilitate the return to debt sustainability, including:
• debt reduction in exceptional cases when its need is clearly demonstrated,
• an active policy of adjusting the "cut-off date" (claims contracted after that date are
not eligible for restructuring in the Paris Club),
• over time, use of flexible instruments such as debt buybacks and swaps.
In this context, coordination between official and other creditors, notably private
creditors, is particularly important. The Paris Club has taken a number of steps to
increase transparency of its procedures over the past years notably through
meetings with private sector representatives and the information provided on its
w e b site. This dialogue should continue and could take the form of early
discussions with the private sector on the issue of the comparability of treatment of
their respective claims.
Finance Ministers urge the Paris Club to adopt such an approach in future
restructuring cases and will review its implementation in Spring 2004.
htto ://www.treas. gov/press/releases/i s419 .htm
7/29/2003
**MEDIA ADVISORY**
FOR PLANNING PURPOSES ONLY
U.S. Treasury Secretary John Snow to Announce Lifting of
U.S. Iraq Sanctions
Pen and Pad Briefing by Senior Treasury Official to Follow
FOR IMMEDIATE RELEASE Contact: Taylor Griffin
M a y 27, 2003
(202) 622-2960
U.S. Treasury Secretary John Snow will hold a press conference this afternoon at 1:30
P M in the Treasury Department Media R o o m to announce the lifting of most remaining
U.S. sanctions on Iraq. Today's announcement implements the resolution passed by the
United Nations Security Council last Thursday lifting the U.N.'s sanctions against Iraq.
Secretary Snow will depart immediately following his remarks. Treasury General
Counsel David Aufhauser will be available to take questions.
WHAT: Announcement of lifting of U.S. Iraq Sanctions
WHEN:
1:30 P M
WHERE:
Treasury Department Media Room (Room 4121)
PARTICIPANTS: Secretary Snow
David Aufhauser, General Counsel
COVERAGE:
Snow remarks will be on-camera, on-the-record
Aufhauser will be pen and pad only
Media without Treasury or White House press credentials planning to attend should
contact Frances Anderson at Treasury's Office of Public Affairs at (202) 622-2960 or email frances.anderson@do.treas.gov as soon as possible with the following information:
name, social security number and date of birth. This information m a y also be faxed to
(202)622-1999.
-30JS-420
JS-421: Treasury Announces Auction Schedule for the W e e k of M a y 26th
Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 24, 2003
JS-421
Treasury Announces Auction Schedule for the Week of May 26th
Treasury will announce all auctions scheduled for the week of May 26th on
Tuesday, May 27 th at 9:00 am. All securities will settle on their regularly scheduled
dates. Treasury will also announce a Cash Management Bill on Tuesday for auction
that day and settlement on Wednesday.
Treasury will resume issuance of State and Local Government Series securities
effective Monday, June 2, 2003.
httpiZ/ww™^"
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™
m v s s re!euses/js421.htm
7/29/2003
JS-422: Statement of Treasury Secretary John W . S n o w O n the Increase in the Statutory ... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 24, 2003
JS-422
Statement of Treasury Secretary John W. Snow On the Increase in the
Statutory Debt Limit
I applaud the Leaders and Members of Congress who voted to preserve the
full faith and credit of the U.S. government by increasing the statutory debt
ceiling. They put politics aside and took action to ensure that the
government's payment obligations to the military, retirees and Medicare
recipients will be met on time. Today's action prevents uncertainty that
would adversely impact our economic recovery. I commend Congress for its
action.
http://www trf-as pnv/nress/releases/js422.htm
7/29/2003
(ffiDIA A D V I S O R Y : United States Postal Service Holds Fifth Public Meeting April 29 in Chicago, IL
Page
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 28, 2003
PRESIDENT'S COMMISSION ON THE UNITED STATES POSTAL SERVICE
For Immediate Release Contact: Betsy Holahan
May 27, 2003 202-622-2960
MEDIA ADVISORY
President's Commission on United States Postal Service
Holds Sixth Public Meeting May 28 in Washington, D C
The President's Commission on the United States Postal Service will hold its sixth
public meeting on May 28, 2003 in Washington, DC.
The meeting will take place in the Hart Senate Office Building, Room 216,
Constitution Ave. and 2nd St., NE, Washington, DC. It is open to the public and the
media.
The agenda and witness list is attached.
The nine-member bipartisan Commission, established by President Bush on
December 11, 2002, will identify the operational, structural, and financial challenges
facing the Postal Service; examine potential solutions; and recommend legislative
and administrative steps to ensure the long-term viability of postal services in the
United States. The Commission is co-chaired by James A. Johnson, Vice Chairman
of Perseus, L.L.C., and Harry J. Pearce, Chairman of Hughes Electronics
Corporation. The Commission will submit its report to the President by July 31,
2003.
Additional information about the Commission can be found at
http://www.treasury.gov/offices/domestic-finance/usps
-30Attachments
• Agenda & Witness List
J S ' 9^-3
http://www.trq^§oW>fiip-
; !
'^^tic-fmance/usps/press/0528.html
5/13/2005
PRESIDENT'S COMMISSION ON THE UNITED STATES POSTAL SERVICE
Witness List
Meeting
M a y 28, 2003
Washington, DC
Hart Senate Office Building
RoomSH-216
2:00 pm to 5:15 pm
I. The Financial Outlook for the Postal Service.
• Winthrop Watson, Managing Director, JP Morgan Chase
II. Cost Measurement, Attribution, and Pricing.
• Professor Michael Bradley, Department of Economics, George
Washington University, on behalf of the United States Postal Service
• James Holsen, Vice President, Industrial Engineering, United Parcel
Service
III. The Postal Service Benefits Package.
• Tom O. S. Rand, Aon Consulting
IV. Postal Reform: Views of the Stakeholders.
Panel A:
• The Honorable William L. Clay, Sr., Chairman, Consumer Alliance for
Postal Services
Panel B:
• Jim Martin, President, 60 Plus Association
Panel C:
• Gary Mulloy, Chairman and Chief Executive Officer, ADVO
• James R. O'Brien, Director of Distribution and Postal Affairs, Time Inc.
•
M a x Heath, Postal Committee Chairman, National Newspaper Association
Panel D:
• Guy H. Wendler, President and Chief Executive Officer, Stamats
Communications Inc, on behalf of American Business Media
• Brad Nathan, President, Quebecor Logistics
2003-5-27-8-24-46-1842: Treasury Letter to Rep. Baker on G S E s
Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Readers
May 27, 2003^
2003-5-27-8-24-46-1842
Treasury Letter to Rep. Baker on G S E s
Related Documents:
• Treasury Letter to Rep. Baker on GSEs
js
¥M
http://www.treas.eov/press/releases/2003527824461842.htm
7/29/2003
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C.
UNDER SECRETARY
M a y 23, 2003
The Honorable Richard H. Baker
Chairman
Subcommittee on Capital Markets, Insurance
and Government Sponsored Enterprises
Committee on Financial Services
U.S. House of Representatives
Washington, D.C. 20515-1805
Dear Mr. Chairman:
Thank you for your recent letter and for your continued leadership in this important area
of public policy regarding government-sponsored enterprises. Y o u inquired about this
Administration's views on government-sponsored enterprises in the context of the testimony
given by then-Under Secretary Gensler on March 22, 2000, and his clarification of March 24,
2000.
The most complete statement of this Administration's objectives and priorities regarding
government-sponsored enterprises remains the testimony that I presented to your Subcommittee
on July 16, 2002, together with m y subsequent colloquy with you and other members of the
Subcommittee.
Prominent among the issues that we discussed was the adequacy of regulation and
supervision of the housing government-sponsored enterprises. In particular, w e think that
Congress could usefully consider the powers and resources of both the Office of Federal Housing
Enterprise Oversight and the Federal Housing Finance Board and/or whether structural changes
might improve the effectiveness of our oversight and regulation of the government-sponsored
enterprises and other financial institutions.
We look forward to working with you and other members of Congress on these issues.
Thank you again for your leadership in this area.
Sincerely,
Peter R. Fisher
Under Secretary for Domestic Finance
JS-426: Statement Prepared by Secretary of the Treasury John S n o w on Lifting of U.S. Sa... Page 1 ol
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 27, 2003
JS-426
Statement Prepared by Secretary of the Treasury John Snow
Announcing the Lifting of U.S. Sanctions against Iraq
Good Afternoon. I am pleased to announce that Treasury's Office of Foreign
Assets Control has issued a general license lifting most U.S. economic sanctions
against Iraq. Today's action represents President Bush's commitment to return the
Iraqi people to the family of trading nations as soon as possible and marks a new
beginning for liberated Iraq. Saddam Hussein's regime and the c o m m a n d economy
he forced on the Iraqi people is now merely a painful memory. As other nations
follow the lead of the United States and implement the resolution passed by the
United Nations Security Council last Thursday, the Iraqi people can look forward to
an end to the crippling economic deprivation they suffered under Saddam Hussein.
For the first time in over two decades, Iraq will trade freely. Trade and the
opportunities and resources that come with it will unleash the forces of the free
market, bringing a better life for the people of Iraq. Oil can now be exported to
finance reconstruction and humanitarian needs. Vital goods and services can be
imported and the entrepreneurial spirit, inherent in people everywhere, can flourish
once again in Iraq. For example, Iraqi entrepreneurs, innovators and dreamers, no
longer stifled by a Stalin-esque command economy, can now access capitol abroad
to make their vision a reality.
Today's action follows general licenses issued by the Office of Foreign Asset
Control May 7 permitting activities related to humanitarian relief and reconstruction
efforts in Iraq. The license announced today allows all transactions with the
exception of trade in arms, stolen cultural artifacts and trade with Baath party
officials and certain other Iraqi officials and agents.
Today is an important day for the Iraqi people. It is no longer a crime for U.S.
companies and individuals to do business with Iraq. The United States has taken
steps to rapidly implement the lifting of U N sanctions. N o w it is imperative that
other nations take similar steps to restart the free flow of commerce with a liberated
Iraq. The sooner the world moves forward to reestablish trade with Iraq, the sooner
the Iraqi people can begin to repair a broken financial system and lay the
foundations for future prosperity.
With that, I turn it over to Treasury's General Counsel David Aufhauser who will be
happy to take your questions.
http://wwwtreas.Pov/nress/releases/js426.htm
7/29/200
JS-427: S n o w Announces Lifting of U.S. Iraq Sanctions
Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 27, 2003
JS-427
Snow Announces Lifting of U.S. Iraq Sanctions
Action permits ail activities except trade in arms, certain cultural artifacts and
transactions with Baath party and certain other Iraqi officials
WASHINGTON, DC - U.S. Treasury Secretary John Snow today announced that
the Treasury Department's Office of Foreign Assets Control (OFAC) has issued a
general license that lifts most U.S. economic sanctions against Iraq. This
implements the resolution approved by the United Nations Security Council last
Thursday ending the UN's Iraq sanctions. Also, President Bush has signed an
Executive Order implementing measures in the U N Security Council resolution to
protect from litigation the Development Fund for Iraq, Iraqi petroleum and proceeds
from its sale.
"Today's action represents President Bush's commitment to return the Iraqi people
to the family of trading nations as soon as possible. The U.S. has acted
immediately to permit trade between the United States and a newly liberated Iraq
and w e call on other nations to do the same."
The general license will permit most trade between U.S. and Iraqi entities - allowing
the free flow of commerce between our two nations. However, trade in arms, trade
in certain cultural artifacts illegally removed from Iraq and trade with previously
designated persons and certain Baath party officials will continue to be prohibited.
Also, the export of certain goods, controlled for export to Iraq for national security
purposes, will require a specific license. The U.S. Treasury has acted rapidly to
implement the U.N. Security Council resolution. It is vital that other nations take
immediate steps to do the same.
In addition, as prescribed in the U.N. Security Council resolution, the President's
Executive Order protects the newly established Development Fund for Iraq and
petroleum and the proceeds from its sale from legal attachments that result from
litigation against the former regime of Saddam Hussein.
Today's announcement follows up on key action taken by the Treasury Department
May 7 to permit humanitarian and reconstruction activities to go forward and is a
final step in President Bush's effort to lift sanctions against Iraq and initiate a new
beginning for the Iraqi people as a trading nation.
http ://www. treas. eov/oress/releases/j s427 .htm
7/29/2003
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
May 27, 2003
Office of Financing
202-691-3550
CONTACT
RESULTS OF TREASURY'S AUCTION OF 16-DAY BILLS
16-Day Bill
May 28, 2003
June 13, 2003
912795QF1
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.160%
Investment Rate 1/:
1.190%
Price:
99.94
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 83.28%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
17,830,000
0
0
$
$
4,000,152
0
0
17,830,000
4,000,152
0
0
Federal Reserve
TOTAL
Accepted
17,830,000
$
4,000,152
Median rate
1.160%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.130%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 17,830,000 / 4,000,152 = 4.46
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
JS - J/JL9
Onit'F. OK l»l BI.K \t I M R S • 1500 PI NNs\ IA A M \ AY K M I , N.W. • WAMIINC ION, l>.< .• lUllti •<1\>1\ tll-lVM*
EMBARGOED UNTIL 9:00 A.M.
May 27, 2003
CONTACT: Office of Financing
202/691-3550
TREASURY OFFERS CASH MANAGEMENT BILLS
The Treasury will auction approximately $4,000 million of 16-day
Treasury cash management bills to be issued May 28, 2003.
Tenders for Treasury cash management bills to be held on the book-entry
records of TreasuryDirect will not be accepted.
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 $100 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 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 the new security are given in the attached offering
highlights.
oOo
Attachment
Js 9^
HIGHLIGHTS OF TREASURY OFFERING
OF 16-DAY CASH MANAGEMENT BILLS
May 27, 2003
Offering Amount $ 4,000 million
Maximum Award (35% of Offering Amount) .. $ 1,400 million
Maximum Recognized Bid at a Single Rate . $ 1,400 million
NLP Reporting Threshold
$ 1,400 million
Description of Offering:
Term and type of security
16-day Cash Management Bill
CUSIP number
912795 QF 1
Auction date
May 27, 2003
Issue date
May 28, 2003
Maturity date
June 13, 2003
Original issue date
May 28, 2003
Currently outstanding
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 $100
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 (NLP) for each bidder must be reported when the sum of the
total bid amount, at all discount rates, and the net long position equals or
exceeds the NLP reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the
closing time for receipt of competitive tenders.
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.
OK KICK OF PI HI 1C \KF\IRN • I5«« PKW^Yl YAM A W K M K , VW. • WNSHIViTON, ll.C.t 202211 »l202l 622-296I1
EMBARGOED UNTIL 9:00 A.M.
May 27, 2003
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 2-YEAR NOTES
The Treasury will auction $25,000 million of 2-year notes to refund $20,444 million of
publicly held notes maturing May 31, 2003, and to raise new cash of approximately
$4,556 million.
The announcement of the 2-year offering, originally scheduled for May 22, 2003,
was postponed on that date.
In addition to the public holdings, Federal Reserve Banks hold $6,020 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 $100 million per account and will be accepted in the order
of smallest to largest, up to the aggregate award limit of $1,000 million.
TreasuryDlrect customers requested that we reinvest their maturing holdings
of approximately $624 million into the 2-year note.
The auction will be conducted
tive and 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.
oOo
Attachment
JS ¥3°
HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF
2-YEAR NOTES TO BE ISSUED JUNE 2, 2003
May 27, 2003
Offering Amount $25,000 million
Maximum Award (35% of Offering Amount)
Maximum Recognized Bid at a Single Rate
NLP Reporting Threshold
Description of Offering:
Term and type of security
Series
CUSIP number
Auction date
Issue date
Dated date
Maturity date
Interest rate
Yield
Interest payment dates
Minimum bid amount and multiples
Accrued interest payable by investor
Premium or discount
STRIPS Information:
Minimum amount required
Corpus CUSIP number
Due date(s) and CUSIP number(s)
for additional TINT(s)
$ 8,750 million
$ 8,750 million
$ 8, 750 million
2-year notes
L-2005
912828 BB 5
May 29, 2003
June 2, 2003
May 31, 2003
May 31, 2005
Determined based on the highest
accepted competitive bid
Determined at auction
November 30 and May 31
$1,000
Determined at auction
Determined at auction
$1, 000
912820 HY 6
May 31, 2005 - - 912833 ZH 6
Submission of Bids:
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 $100
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 equals or exceeds the NLP
reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the
closing time for receipt of competitive tenders.
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. TreasuryDlzect customers can use the Pay
Direct feature which authorizes a charge to their account of record at their
financial institution on issue date.
Oil |{ K OF HBI.lt W I M R S • 15<M> IT NNS Yl A A M \ A Y K M K, \.W. • WASH I \C. TON, D.f .• 2022(1 •(202! 621-2*>M\
EMBARGOED UNTIL 9:00 A.M.
May 27, 2003
CONTACT:
Office of Financing
202/691-3550
TREASURY OFFERS 4-WEEK, 13-WEEK, AND 26-WEEK BILLS
The Treasury will auction three series of Treasury bills totaling $57,000
million to refund an estimated $43,775 million of publicly held Treasury bills
maturing May 29, 2003, and to raise new cash of approximately $13,225 million.
The announcement of the 13-week and 26-week offerings, originally scheduled for
May 22, 2003, was postponed on that date.
Tenders for 4-week Treasury bills to be held on the book-entry records of
TreasuryDlrect will not be accepted.
The Federal Reserve System holds $15,300 million of the Treasury bills maturing
on May 29, 2003, in the System Open Market Account (SOMA). This amount may be
refunded at the highest discount rate of accepted competitive tenders in these
auctions. 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 $100 million per account and will be accepted
in the order of smallest to largest, up to the aggregate award limit of $1,000
million.
Please note that the auctions of the 4-week, 13-week, and 26-week bills will be
held on Wednesday, May 28, 2003. For the 4-week bill auction, the closing times for
receipt of noncompetitive and competitive tenders will be 11:00 a.m. and 11:30 a.m.
eastern daylight saving time, respectively. For the 13-week and 26-week bill
auctions, the closing times for receipt of noncompetitive and competitive tenders will
be 12:00 noon and 1:00 p.m. eastern daylight saving time, respectively.
TreasuryDlrect customers have requested that we reinvest their maturing holdings
of approximately $1,095 million into the 13-week bill and $684 million into the 26week 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
JSH3I
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED MAY 29, 2003
May 27, 2003
Offering Amount
$25,000
Maximum Award (35% of Offering Amount)
$ 8,750
Maximum Recognized Bid at a Single Rate .... $ 8,750
NLP Reporting Threshold
$ 8,750
NLP Exclusion Amount
$11,300
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
million
million
million
million
million
28-day bill
912795 MT 5
May 28, 2003
May 29, 2003
June 26, 2003
December 26, 2002
$43,729 million
$1,000
$16,000
$ 5,600
$ 5,600
$ 5,600
$ 5,900
million
million
million
million
million
91-day bill
912795 NK 3
May 28, 2003
May 29, 2003
August 28, 2003
February 27, 2003
$22,643 million
$1,000
$16,000
$ 5,600
$ 5,600
$ 5,600
None
million
million
million
million
183-day bill
912795 NY 3
May 28, 2003
May 29, 2003
November 28, 2003
May 29, 2003
$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 $100
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 (NLP) for each bidder must be reported when the sum of the total bid amount, at all
discount rates, and the net long position equals or exceeds the NLP reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of
competitive tenders.
Receipt of Tenders:
4-week bill:
Noncompetitive tenders
Prior to 11:00 a.m. eastern daylight saving time
Competitive tenders
Prior to 11:30 a.m. eastern daylight saving time
13-week and 26-week bills:
Noncompetitive tenders
Prior to 12:00 noon eastern daylight saving time
Competitive tenders
Prior to 1:00 p.m. eastern daylight saving time
Payment Terms: By charge to a funds account at a Federal Reserve Bank on issue date, or payment of full par amount
with tender. TreasuryDlrect customers can use the Pay Direct feature, which authorizes 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, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
CONTACT:
FOR IMMEDIATE RELEASE
May 28, 2003
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
91-Day Bill
May 29, 2003
August 28, 2003
912795NK3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.100%
Investment Rate 1/:
1.121%
Price:
99.722
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 64.65%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Accepted
Competitive
Noncompetitive
FIMA (noncompetitive)
29,808,259
1,496,594
398,100
14,105,399
1,496,594
398,100
SUBTOTAL
31,702,953
16,000,093 2/
5,995,455
5,995,455
37,698,408
21,995,548
Federal Reserve
TOTAL
Median rate
1.085%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.065%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 31,702,953 / 16,000,093 = 1.98
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $1,190,587,000
http ://www.publicdeb ttreas.gov
j5
^31
PUBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
May 28, 2003
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2 6-WEEK BILLS
183-Day Bill
May 29, 2003
November 28, 2003
912795NY3
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.080%
Investment Rate 1/:
1.104%
Price:
99.451
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 75.66%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Accepted
Competitive
Noncompetitive
FIMA (noncompetitive)
32,438,964
981,479
778,700
14,239,839
981,479
778,700
SUBTOTAL
34,199,143
16,000,018 2/
Federal Reserve
TOTAL
5,765,442
5,765,442
39,964,585
21,765,460
Median rate
1.075%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.060%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 34,199,143 / 16,000,018 = 2.14
1/ Equivalent coupon-issue yield.
2/ Awards to TREASURY DIRECT = $738,310,000
http://www.publicdebt.treas.gov
< , V33
PUBLIC DEBT N E W S
Department of the Treasury • Bureau of the Public Debt • Washington, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
May 28, 2003
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 4-WEEK BILLS
28-Day Bill
May 29, 2003
June 26, 2003
912795MT5
Term:
Issue Date:
Maturity Date:
CUSIP Number:
High Rate:
1.180%
Investment Rate 1/:
1.20'
Price:
99.90:
All noncompetitive and successful competitive bidders were awarded
securities at the high rate. Tenders at the high discount rate were
allotted 28.18%. All tenders at lower rates were accepted in full.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Competitive
Noncompetitive
FIMA (noncompetitive)
$
SUBTOTAL
Federal Reserve
TOTAL
$
38,675,961
49,143
0
Accepted
$
24,951,291
49,143
0
38,725,104
25,000,434
3,538,614
3,538,614
42,263,718
$
28,539,048
Median rate
1.155%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low rate
1.130%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 38,725,104 / 25,000,434 = 1.55
1/ Equivalent coupon-issue yield.
http://www.publicdebt.treas.gov
J
w
JS-435: Here is what economists are saying about the Jobs & Growth Tax Relief Reconcil... .Page 1 014
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 28, 2003
JS-435
Here is what economists are saying about the
Jobs & Growth Tax Relief Reconciliation Act of 2003:
"The tax cut is good for the economy short run, intermediate run, and long run. The
longer term positive consequences of leveling the playing field between the taxation
of capital and labor are potentially enormous." Richard Vedder, Distinguished
Professor of Economics, Ohio University
• "This legislation not only will provide an important boost to the U.S. economy, it
moves the tax code toward greater fairness and gives taxpayers more of their own
money. The real winners are working families." Russell Lamb, North Carolina
State University
• "This bill should provide significant help in re-establishing a rate of economic
growth consistent with much-needed higher levels of employment. The modest tax
relief provided in the bill will provide some help on the supply side of the U.S.
economy, and additional cuts in marginal rates on income-producing activities will
be even more beneficial in the long run." John C. Soper, Ph.D., Boler School of
Business, John Carroll University
• "The just passed tax bill is very cost effective. Americans will enjoy a higher
standard of living and more job opportunities as a result of the tax package."
Richard W . Rahn, Senior Fellow, Discovery Institute
• "This dividend and capital gains provisions of this law represent a significant,
positive step forward in making our tax system more efficient. By reducing the tax
burden on equity financed corporate investment, w e will reduce or eliminate a few
of the many unhealthy economic distortions created by our complex tax code, and
provide an environment that is more supportive of long-run economic growth."
Jeffrey R. Brown, Department of Finance, University of Illinois at UrbanaChampaign
• "The 2003 Tax Act will benefit all Americans by improving the economy's
performance in both the short and long term." John H. Wicks, University of
Montana
• "The 2003 tax cut, while not as dramatic a reduction in the tax biases against
saving as the President originally proposed, is nonetheless a step in the direction of
real tax reform. The accelerated rate cuts, the reduced taxes on interest and
dividends, and the improved depreciation allowances will boost employment,
productivity and wages across the board, and lift G D P in 2003 and 2004. The next
key step is to make the tax relief for capital formation permanent." Stephen J.
Entin, President, Institute for Research on the Economics of Taxation
• "An excellent law that will improve corporate governance, reduce capital market
distortions, increase the rewards to work and valuable risk taking. Long term
economic growth will be enhanced." Robert Tamura, John E. Walker Department
of Economics, Clemson University
• "Now is the time to add a fiscal stimulus by speeding up the planned tax cuts
through the Jobs and Growth Tax Relief Reconciliation Act of 2003, rather than wait
http ://www.treas. e o v/nress/releases/j s43 5 .htm
JS-435: Here is what economists are saying about the Jobs & Growth Tax Relief Reconcil... Page 2 of 4
for them to be slowly phased in. Speeding up the tax cut resolves the uncertainty to
whether the tax cuts will ever occur and puts much needed additional cash in
taxpayer's hands. With a reduced tax rate, w e increase the ability of small and
medium sized firms to hire more workers." Richard D. Marcus, Associate
Professor, School of Business Administration, University of Wisconsin - Milwaukee
• "Cutting taxes is not only an important economic stimulus, it is an equally
important stimulant for personal liberty." Paul J. Zak, Claremont Graduate
University
• "Many of President Bush's tax cuts, such as marginal rate reduction and
dividend relief, have been in the direction of fundamental reform of the tax system
that will generate sustained long-term growth." Chris Edwards, Director of Fiscal
Policy, Cato Institute
• "This tax relief package will provide a solid boost to small business, the economy
and job creation. Critical pro-growth measures - such as reducing income tax
rates, cutting the capital gains tax and expanding expensing levels for small
business -- will enhance incentives for investing and entrepreneurship. That's
exactly what the economy needs right now." R a y m o n d J. Keating, Chief
Economist, Small Business Survival Committee
• "The President's tax cut makes two important contributions. First, although the
economy already shows significant improvement, the tax cuts clearly speed the
recovery. Second, it increases individuals' economic freedom by allowing them to
keep a larger fraction of their earnings." John Rapp, Professor of Economics,
University of Dayton
• "President Bush's balanced tax relief plan will help individuals, families and
business owners better spend, save, or invest more of their own earnings in a way
that will unlock capital, enhance economic activity, and foster job creation." Paul G.
Merski, Chief Economist & Director of Federal Tax Policy, Independent Community
Bankers of America
• "I strongly support the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The Act will increase the after-tax income and cash flow of both consumers and
investors, leading to greater job growth through increased consumer spending and
capital accumulation." Craig A. Stephenson, Ph.D., Babson College
• "The passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003
represents significant tax reform by sharply reducing the double taxation of
dividends. In addition, by accelerating previously enacted income tax cuts, the act
should provide significant stimulus to economic growth over the next two years.
W h e n combined with the original tax cut passed in 2001, the act provides the most
significant rollback in tax rates since the Reagan tax cuts." John Ryding, Bear
Stearns
• "The Bush Administration tax cut increases household disposable income, raises
the after-tax returns on equity and provides incentives for business investment.
Whether you rely on a demand-driven model of the economy or one that is supplydriven, the economic impact of this package is clear: it will boost growth and create
jobs." Mickey D. Levy, Chief Economist, Bank of America
• "Cuts in dividend and capital gains taxes will stimulate investment and grow the
economy. The nation should be grateful that President Bush has persevered on
this issue." John S e m m e n s , Phoenix College
• "The combination of the income tax cut and the stimulants for capital investment
bode well for economic growth in our country. A s people spend and businesses
invest, demand for goods and services will increase, ultimately creating jobs for
Americans." Dr. Rebecca A. Thacker, Ohio University
• "In the short-term, this act will stimulate the economy by providing immediate tax
http ://www. treas^ov/nress/releases/j s43 5 .htm
7/29/2003
JS-435: Here is what economists are saying about the Jobs & Growth Tax Relief Reconcil... Page 3 of 4
relief for millions of Americans. Over the long-term, it enhances economic growth
by encouraging business investment and improves economic efficiency by reducing
the taxation of dividends and capital gains." William Walstad, Professor of
Economics, University of Nebraska-Lincoln Lincoln
• "Timely medicine to strengthen a struggling economy with tax relief for
overburdened taxpayers and investment incentives to spur growth and create jobs.
And a good step toward long-run tax reform, to boot." Dr. Michael J. Boskin, T.M.
Friedman Professor of Economics and Hoover Institution Senior Fellow, Stanford
University, former Chairman of the President's Council of Economic Advisers
• "The Jobs and Growth Tax Relief Reconciliation Act of 2003 is another positive
step forward for taxpayers. Much more work remains to be done, but this
legislation marks provides both qualitative and quantitative improvements in our
federal tax system." John Berthoud, Ph.D., President, National Taxpayers Union,
Adjunct Lecturer, George Washington University
• "I believe the new Jobs and Growth Tax Relief law and continued easy money will
do just that; create more jobs and growth, beginning in the last half of this year and
through 2004. President Bush and the Congress are to be congratulated on their
achievement." Dr. Beryl W a y n e Sprinkel, President, B.W. Sprinkel Economics.
• "While the economy has been growing, it can and should grow faster. This bill sets
the stage for sustained economic growth. It is a down payment on a long-overdue
restructuring of our tax code." Charles Upton, Department of Economics, Kent
State University
• "The President's tax cut, although less than he wanted, will still lead to an
improved U.S. stock market and an improved economy. By increasing the incentive
to produce goods and services it will lead to greater employment and wealth for all
Americans, but will primarily benefit the working class." Dr. Gary Wolfram, George
Munson Professor of Political Economy, Hillsdale College
- "Cutting tax rates on dividends, on capital gains, and on income earners is not
'trickle-down economics.' It is gush-down economics. Virtually every working
American will gain from the new incentives to invest and work." David R.
Henderson, Research Fellow, Hoover Institution
• "President Bush's Tax Relief plan will help to create the incentives needed to
boost the economy's growth rate. The fundamentals of our economy are strong
and the economy is poised to grow at a healthy 3 to 4 % per year under the
leadership of a President w h o understands that the economy is composed of
individuals w h o want to be productive and to be fairly rewarded for their effort. The
improving consumer confidence figures of the last few days bears out the readiness
of the economy to respond to this stimulus package now." Sherry Jarrell, Asst
Professor of Finance and Economics, W a k e Forest University
• "The new tax bill is a solid boost to the economy's long-term growth potential, and
its effects will start to be felt immediately. At the s a m e time, it's a down-payment on
fundamental and much-needed reform of the tax-code." Donald L. Luskin, Chief
Investment Officer, Trend Macrolytics
• "The President's jobs & growth package is the best elixir for the economy's ills.
This package will place money into the hands of consumers than spend, and back
into the businesses and corporations that are responsible for hiring workers and
investing in new projects and equipment. There's even relief for investors,
particularly those that depend on dividend-yielding securities. And rightfully so, as
these are the entities that are suffering the most." Richard Yamarone, Director of
Economic Research, Argus Research Corp.
• "Any tax relief on the double taxation of common stock dividends is more than
welcome. Previous double taxation of dividends has favored debt usage by firms
over issuing equity. A s a result, it has encouraged firms to use more debt than
httn ://www.freas,gOYZEress/releases/is43 5 .htm
7/29/2003
JS-435: Here is what economists are saying about the Jobs & Growth Tax Relief Reconcil... Page 4 of 4
otherwise, thereby increasing bankruptcy risk a m o n g American businesses. Also,
double taxation has caused firms to cut back on dividends. More and more firms do
not pay any dividends today. A s a result, for investors at least, dividends are not
useful in valuing m a n y firms. And, many investors must take the risk of making
large capital gains on their investments. With less taxation of dividends, risk-averse
investors will find that buying c o m m o n stocks is more attractive than otherwise.
Risk-averse investors like dividends, as they are returns paid n o w rather than
hopefully paid later in the form of capital gains. With huge declines in stock prices
in recent years, investors are scared of buying stocks. Dividends will reduce
investors' fears of stocks, as they can get returns paid out faster than if they had to
rely almost entirely on capital gains. With more investors returning to the stock
market, stock prices can be expected to be benefit from the greater demand. Thus,
this change in tax policy should benefit firms, investors, and economy in general."
J a m e s W . Kolari, Chase Professor of Finance, Texas A & M University
http ://www.treas.gov/press/releases/j s43 5 .htm
7/29/2003
JS-436: N e w Lower Tax Withholding Tables N o w on Treasury & IRS W e b Sites
Page 1 of 2
F R O M T H E OFFICE O F PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
May 28, 2003
JS-436
New Lower Tax Withholding Tables Now
on Treasury & IRS W e b Sites
President's Signature Means More Money in Workers 1 Paychecks
Today, as the President signed into law the Jobs and Growth Tax Relief
Reconciliation Act of 2003, the Treasury Department and the Internal Revenue
Service posted the new lower withholding tables on their websites.
"I expect that all employers will move as quickly as possible to make these
withholding changes and lower the tax bite out of millions of American workers'
paychecks. Workers will begin to see more money in their paychecks in the next
few weeks," stated Treasury Secretary John Snow. "And 23 million small
businesses owners--who pay taxes at the individual rates-will have more money to
invest in their company, buy new equipment, and hire more workers. Putting more
money in the hands of taxpayers is exactly the right thing to help give our economy
the boost it needs. After all, it's their money to begin with, and they know best how
to use it."
The new withholding tables will tell employers and payroll administrators how much
less in federal income taxes to withhold from workers' wages. By the end of the
week, wage bracket method tables are also expected to be on the IRS website.
Printed copies of Publication 15-T, containing all the withholding tables, will be
mailed to all employers nationwide by the third week in June.
These withholding changes alone are expected to reduce workers taxes and put
$22 billion into the economy this year, and $35 billion next year. Under the Jobs
and Growth Act, a family of four making 40,000 dollars will see their taxes reduced
by $1,133 in 2003, a reduction of 9 6 % .
Among other things, the Jobs and Growth Tax Relief and Reconciliation Act
immediately in 2003:
• expands the 10-percent bracket from $6,000 to $7,000 for single filers and from
$12,000 to $14,000 for married taxpayers filing joint returns, meaning the lowest tax
rate will apply to a larger portion of workers' incomes;
• lowers the tax rate from 2 7 % to 1 5 % on taxable incomes between $47,450 and
$56,800 for married taxpayers filing jointly;
• lowers the 2 7 % rate to 2 5 % on taxable income up to $68,800 for single taxpayers
($114,650 for married taxpayers filing joint returns);
• lowers the 3 0 % rate to 2 8 % on taxable income up to $143,500 for single
taxpayers ($174,700 for married taxpayers filing jointly);
• lowers the 3 5 % rate to 3 3 % on taxable income up to $311,950;
• lowers the 38.6% rate to 3 5 % on taxable income over $311,950;
• reduces the marriage penalty by expanding the standard deduction from $7,950 to
$9,500 for married individuals; and
• lowers tax rates for millions of small businesses. Twenty-three million small
business owners would benefit from the tax act (including all the provisions in the
bill).
http://www treas Pov/nress/releases/js436.htm
7/29/2003
JS-436: N e w Lower Tax Withholding Tables N o w on Treasury & IRS W e b Sites
Page 2 of 2
A copy of the new withholding rates is attached.
Related Documents:
• Withholding Table
http://www.treas.gov/press/releases/js436.htm
7/29/2003
Department of the Treasury
Internal Revenue Service
Notice 1036
(Rev. May 2003)
Early Release Copies of N e w Income
Tax Withholding Tables
Attached are early release copies of the new
Percentage Method of Withholding tables that will
appear in Publication 15-T, N e w Withholding Tables.
This publication is scheduled to be mailed to
employers by June 18, 2003. The new tables are the
result of the Jobs and Growth Tax Relief Reconciliation
Act of 2003.
Effective immediately, employers should begin using
the revised tables for wages paid through 2004.
Notice 1036 will be revised to include the W a g e
Bracket Method Income Tax Withholding Tables;
Formula Tables for Percentage Method Withholding;
W a g e Bracket Percentage Method Tables; Combined
Income Tax, Employee Social Security Tax, and
Employee Medicare Tax Withholding Tables; and Tables
for Withholding on Distributions of Indian Gaming
Profits to Tribal Members. The revised notice will be
posted to www.irs.gov on May 30, 2003.
Percentage Method Income Tax
Withholding Tables
The wage amounts shown in the tables are net wages
after the deduction for total withholding allowances.
The withholding allowance amounts by payroll period
have changed as shown below.
One
Payroll
Withholding
Period
Allowance
Weekly
$ 59.62
Biweekly
$119.23
Semimonthly
$129.17
Monthly
$258.33
Quarterly . . .
$775.00
Semiannually
$1,550.00
Annually
$3,100.00
Daily or Miscellaneous
$ 11.92
W h e n employers use the percentage method tables,
the tax for the pay period may be rounded to the
nearest dollar. (If rounding is used, it must be used
consistently.) Withheld tax amounts should be rounded
to the nearest dollar by dropping amounts under 50
cents and increasing amounts from 50 to 99 cents to
the next higher dollar. For example, $2.30 becomes $2
and $2.80 becomes $3.
Notice 1036
(Rev. May 2003)
Cat. No. 21974B
fig Printed on recycled paper
Tables for Percentage Method of Withholding
(For Wages Paid Through December 2004)
TABLE 1—WEEKLY Payroll Period
(a) SINGLE person (including head of household)—
(b) MARRIED person—
If the amount of wages
(after subtracting
The amount of income tax
withholding allowances) is: to .withhold is:
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
Not over S51 . . . .
Not over S154
Over—
S51
S187
$592
S1,317
$2,860
S6,177
But not over—
—$187 .
—$592 .
—S1,317 .
—S2,860 .
—$6,177 .
. SO
of excess over—
.
.
.
.
.
10%
S13.60 plus 1 5 %
S74.35 plus 2 5 %
$255.60 plus 2 8 %
$687.64 plus 3 3 %
SI,782.25 plus 3 5 %
—S51
— S I 87
—S592
—S1,317
—S2,860
—$6,177
Over—
$154
$429
$1,245
S2,270
S3.568
S6.271
. . .
.
SO
of excess over—
But not over—
—$429
—SI,245
—S2,270
—$3,568
—S6,271
.
.
.
.
.
.
.
.
.
.
.
—$154
—$429
—$1,245
—$2,270
—S3,568
—$6,271
10%
$27.50 plus 1 5 %
$149.90 plus 2 5 %
$406.15 plus 2 8 %
S769.59 plus 3 3 %
$1,661.58 plus 3 5 %
TABLE 2—BIWEEKLY Payroll Period
(a) SINGLE person (including head of household)—
(b) MARRIED person—
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
If the amount of wages
(after subtracting
The amount of income tax
withholding allowances) is: to withhold is:
Not over S102
Over—
S102
S373
S1,185
S2,635
S5/719
SI 2,354
. . .
But not over—
—$373
—S1,185
— 52,635
—$5,719
—512,354
. . . .
SO
Not over $308
of excess over—
— S I 02
—$373
—S1,185
—S2,635
—S5J19
S1,374.92 plus 3 3 %
—$12,354
$3,564.47 plus 3 5 %
Over—
$308
S858
S2,490
54,540
$7,137
S12,542
10%
S27.10plus 1 5 %
SI48.90 plus 2 5 %
$511.40 plus 2 8 %
. . . .
But not over—$858
—$2,490
—$4,540
—S7,137
—S12,542
. . . .
SO
of excess over—
—$308
—$858
—S2,490
—S4,540
—S7,137
S1,539.46 plus 3 3 %
—$12,542
$3,323.11 plus 3 5 %
10%
$55.00 plus 1 5 %
$299.80 plus 2 5 %
S812.30 plus 2 8 %
TABLE 3—SEMIMONTHLY Payroll Period
(a) SINGLE person (including head of household)—
(b) MARRIED person—
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
Not over S110
. . .
Over—
But not over—
$110
$404
S1,283
$2,854
$6,196
S13,383
—$404
—$1,283
—S2,854
—$6,196
—S13,383
. . . .
SO
Not over $333
. . . .
of excess over—
—$110
10%
—$404
$29.40 plus 1 5 %
—S1,283
$161.25 plus 2 5 %
—$2,854
$554.00 plus 2 8 %
—$6,196
51,489.76 plus 3 3 %
—$13,383
$3,861.47 plus 3 5 %
Over—
But not over—
S333
—$929
S929
—$2,698
52,698
—54,919
54,919
—57,731
$7,731 —S13,588
SI 3,588
. . . .
SO
of excess over—
10%
$59.60 plus 1 5 %
$324.95 plus 2 5 %
$880.20 plus 2 8 %
SI,667.56 plus 3 3 %
$3,600.37 plus 3 5 %
—$333
—$929
—S2,698
—$4,919
—57,731
—$13,588
TABLE 4—MONTHLY Payroll Period
(a) SINGLE person (including head of household)-
(b) MARRIED person-
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
Not over S221
SO
Not over $667
of excess over—
—$221
10%
—$808
$58.70 plus 1 5 %
—$2,567
$322.55 plus 2 5 %
—S5.708
$1,107.80 plus 2 8 %
—$12,392
$2,979.32 plus 3 3 %
—$26,767
$7,723.07 plus 3 5 %
Over—
But not over—
$667
$1,858
$5,396
$9,838
$15,463
S27J75
—$1,858
—$5,396
—$9,838
—$15,463
—$27,175
. . . .
. . .
Over—
But not over—
$221
$808
$2,567
S5.708
SI 2,392
$26,767
—$808
—$2,567
—$5,708
—S12,392
—$26,767
. . . .
. . .
SO
of excess over—:
10%
$119.10 plus 1 5 %
$649.80 plus 2 5 %
S1.760.30 plus 2 8 %
$3,335.30 plus 3 3 %
$7,200.26 plus 3 5 %
—$667
—$1,858
—S5.396
—$9,838
—$15,463
—$27,175
Tables for Percentage Method of Withholding (Continued)
(For Wages Paid Through December 2004)
TABLE 5—QUARTERLY Payroll Period
(a) SINGLE person (including head of household)—
(b) MARRIED person—
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
Not over $663
Over—
$663
$2,425
$7,700
$17,125
$37,175
$80,300
Not over $2,000
$0
. . .
of excess over—
But not over—
10%
$176.20 plus 1 5 %
$967.45 plus 2 5 %
—$2,425.
—$7,700.
—$17,125.
—$37,175.
—$80,300.
$3,323.70 plus 2 8 %
$8,937.70 plus 3 3 %
$23,168.95 plus 3 5 %
—$663
—$2,425
—$7,700
—$17,125
—$37,175
—$80,300
Over—
$2,000
$5,575
$16,188
$29,513
$46,388
$81,525
. . . .
But not over—
—$5,575.
—$16,188.
—$29,513.
—$46,388.
—$81,525.
.
.
.
.
.
$0
of excess over—
—$2,000
10%
—$5,575
$357.50 plus 1 5 %
—$16,188
$1,949.45 plus 2 5 %
$5,280.70 plus 2 8 % —$29,513
—$46,388
$10,005.70 plus 3 3 %
$21,600.91 plus 3 5 % —$81,525
TABLE 6—SEMIANNUAL Payroll Period
(a) SINGLE person (including head of household)—
(b) M A R R I E D person-
If the amount of wages
(after subtracting
withholding allowances) is:
The amount of income tax
to withhold is:
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
Not over $1,325 . . . .
$0
Not over $4,000 . . .
$0
Over—
But not over—
$4,000 —$11,150.
$11,150 —$32,375.
$32,375 —$59,025.
$59,025 —$92,775.
$92,775 —$163,050.
$163,050
10%
—$4,000
$715.00 plus 1 5 %
—$11,150
$3,898.75 plus 2 5 %
—$32,375
$10,561.25 plus 2 8 %
—$59,025
$20,011.25 plus 3 3 %
—$92,775
$43,202.00 plus 3 5 % —$163,050
Over—
But not over—
$1,325
—$4,850.
$4,850 —$15,400.
$15,400 —$34,250.
$34,250 —$74,350.
$74,350 —$160,600.
$160,600
of excess over—
.
.
.
.
.
10%
—$1,325
$352.50 plus 1 5 %
—$4,850
$1,935.00 plus 2 5 %
—$15,400
$6,647.50 plus 2 8 %
—$34,250
$17,875.50 plus 3 3 % —$74,350
$46,338.00 plus 3 5 % —$160,600
of excess over—
TABLE 7—ANNUAL Payroll Period
(a) SINGLE person (including head of household)—
(b) M A R R I E D person-
If the amount.of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
If the amount of wages
The amount of income tax
(after subtracting
withholding allowances) is: to withhold is:
Not over $2,650 . . .
$0
Not over $8,000 . . .
Over—
of excess over—
—$2,650
10%
—$9,700
$705.00 plus 1 5 %
—$30,800
$3,870.00 plus 2 5 %
$13,295.00 plus 2 8 % —$68,500
-$148,700
Over—
$2,650
$9,700
$30,800
$68,500
$148,700
$321,200
But not over—
—$9,700.
—$30,800.
—$68,500.
—$148,700.
—$321,200.
$35,751.00 plus 3 3 %
$92,676.00 plus 3 5 % —$321,200
$8,000
$22,300
$64,750
$118,050
$185,550
$326,100
$0
of excess over—
But not over—
—$22,300.
—$64,750.
—$118,050.
—$185,550.
—$326,100.
10%
$1,430.00 plus 1 5 %
$7,797.50 plus 2 5 %
—$8,000
—$22,300
—$64,750
—$118,050
$21,122.50 plus 2 8 %
$40,022.50 plus 3 3 % —$185,550
$86,404.00 plus 3 5 % —$326,100
TABLE 8—DAILY or MISCELLANEOUS Payroll Period
(a) SINGLE person (including head of household)—
(b) M A R R I E D person—
If the amount of wages (after
subtracting withholding
allowances) divided by the
The amount of income tax
number of days in the
to withhold per day is:
payroll period is:
Not over $10.20 . . .
$0
If the amount of wages (after
subtracting withholding
allowances) divided by the
The amount of income tax
number of days in the
to withhold per day is:
payroll period is:
Not over $30.80 . . . . $0
Over—
$10.20
$37.30
$118.50
$263.50
$571.90
$1,235.40
But not over-
—$37.30
—$118.50
—$263.50
—$571.90,
—$1,235.40,
of excess over—
—$10.20
10%
—$37.30
$2.71 plus 1 5 %
—$118.50
$14.89 plus 2 5 %
—$263.50
$51.14 plus 2 8 %
—$571.90
$137.49 plus 3 3 %
— $1,235.40
$356.45 plus 3 5 %
Over—
But not over—
—$85.80.
—$249.00.
—$454.00.
—$713.70.
$713.70 —$1,254.20.
$1,254.20
$30.80
$85.80
$249.00
$454.00
of excess over—
10%
$5.50 plus 1 5 %
$29.98 plus 2 5 %
$81.23 plus 2 8 %
$153.95 plus 3 3 %
$332.32 plus 3 5 %
—$30.80
—$85.80
—$249.00
—$454.00
—$713.70
— $1,254.20
JS-437: Assistant Secretary Abernathy's Remarks to State B a n k Supervisors
Page 1 of 5
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 29, 2003
JS-437
Remarks of
W a y n e A. Abernathy
Assistant Secretary of the Treasury for Financial Institutions
To the
Conference of State Bank Supervisors
2003 Annual Meeting and Conference
Ashville, North Carolina
A Financial System that Best Serves the Needs of Consumers
Thank you for this opportunity to speak to you today. Ashville is such a lovely
setting.
Just last year we had an important Abernathy family celebration. We
commemorated the 350th anniversary of the arrival of the first Abernathy in this free
land of America. Robert Abemethy had come from Scotland, where he was not so
free. H e landed in Jamestown, courtesy of Oliver Cromwell and the English
Parliament, as a prisoner of war. Robert had been given a choice: Virginia or the
Tower of London. He chose Virginia—and I a m glad that he did. Afterward, several
generations of Abernathies made Tidewater Virginia their home. By the time of the
Revolution, many Abernathies and a lot of other Scots had migrated to the hills of
North Carolina. Not far from this place, just over the ridge to the east, especially in
Catawba, Burke, Lincoln, and Cleveland Counties, Abernathy is a rather c o m m o n
name. M y father used to tell m e that Grandpa was the first Abernathy to come
down out of the hills. And when you come to a setting such as this, you don't
wonder why people were so reluctant to leave.
North Carolina is a fitting location for a meeting of the Conference of State Bank
Supervisors. I think perhaps as much as any State, North Carolina exemplifies the
benefits of our nation's dual banking system. Here you find very big banks—and
w e can all n a m e them. And here you find some small banks, that maybe few of us
can name. But they are strong banks, and they operate and compete side by side.
By the end of last year, there were 110 banks headquartered in North Carolina.
T w o had assets of more than $300 billion each. Seventy-six banks had assets of
less than $300 million each. Yet all are committed to helping families named
Abernathy and all the other many family names from all of the other places, to buy
their homes, pay their bills, send John and Sarah to college, save for retirement,
build a business, and meet the thousands of other services for which w e rely upon
banks. These banks grow, expand, and prosper, as they help these families and
their communities grow, expand, and prosper. There is no other way. Which is one
of the things that has always puzzled m e about the Community Reinvestment Act:
it seems to be telling banks to do what they already do best, build their
communities.
Our dual bank system is strong, because it is the best system for meeting the
needs of our communities and our families. I know of no nation in the world that
has anything quite like this system, our great dual banking system. It is nothing w e
planned. It is one of those marvelous fruits of the genius of our founding fathers, of
this wonderful federal system of government that is our American Republic. You
won't find the dual banking system detailed anywhere in the Constitution. It is
rather the organic outgrowth of the interplay of two important provisions of the
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JS-437: Assistant Secretary Abernathy's Remarks to State B a n k Supervisors
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Constitution: Article II, Section 8, that gives to Congress authority to set national
standards for national commerce; and the Tenth Amendment, that preserves for the
States powers not reserved for the Federal Government.
There has been a tug of war between the Federal and State governments for more
than 200 years since, and banking has often been the rope. And the rope has
sometimes been pulled one way and sometimes the other. From time to time, one
side has nearly pulled the other all the way over.
Outside of my window at the Treasury Department is a bronze statute of the first
Secretary of the Treasury, Alexander Hamilton. H e can perhaps be called the
father of the First Bank of the United States. His idea w a s to bring under one
standard what w a s then a variety of banking products, currency in particular. And
his vision succeeded for a time. Then the rope w a s pulled the other way, the
Bank's charter lapsed, and a brief experiment in national banking ended, for a time.
Outside of the door to the office of the General Counsel of the Treasury is an
imposing painting. It is nearly life size. Standing there, arms crossed, with
brooding eyes that follow you wherever you go, is the image of Salmon P. Chase,
Abraham Lincoln's first Secretary of the Treasury. Secretary Chase left an
impressive record of institution building. Three of his institutions are with us today:
the Internal Revenue Service, the Bureau of Engraving and Printing, and the
National Bank System. Secretary Chase had a big job. H e had to fund the biggest
war the United States has ever fought, and he had to fund it with half the nation in
rebellion—and it wasn't rebellion against the Internal Revenue Service—though I
suppose that the IRS w a s used to get the southern States after the war to help pay
off the bonds used to finance their defeat.
To market those bonds, Secretary Chase proposed a system of national banks.
But the Secretary w a s creative. Not only would the national banks market the
bonds, but they would also issue a uniform national currency backed by those
bonds. A network of national banks sprang up almost over night, and the dual
banking system has been with us ever since.
But as the rope pulled that way, it almost pulled too far. Concerned that Federal
bank notes had not replaced the bank notes of State banks—that a single national
currency had not yet been achieved—the Congress imposed a 1 0 % tax on all bank
notes other than those issued by national banks. That did it. State bank notes
disappeared, but so did State-chartered banks, or very nearly. In 1863, the year of
enactment of the National Bank Act, there were just under 1,500 State-chartered
banks. In 1865, with the taxation of State bank notes, there were less than 350
State banks, while there were just shy of 1,300 national banks. Consumers
benefited from a uniform currency, portable to all parts of the nation. But the dual
banking system w a s going, going, but not quite gone.
What remained was the ability of States to experiment and bankers to innovate.
Unable to compete with national bank notes, State banks gave new vigor to what
has become a commonplace of everyday financial life, personal checks. And a
broad system of business and consumer checking gave new life to the dual banking
system, national and State banks. By 1890, there were 3,484 national banks, and
2,250 State-chartered banks. And the revitalization continued. By 1913, there
were over 24,000 banks in the United States, and two-thirds of them had State
charters.
From this tug of war, new and better products and services are developed for
families and businesses. I could point to many other innovations m a d e possible by
our dual banking system, our system of real life laboratories, competing for how
best to serve their customers. Interest on checking accounts, adjustable rate
mortgages, and nation-wide branch banking are just a token of the innovations that
have occurred in recent years. Each of you can think of others.
I hope that this tug of war never ends. By that I mean, I hope that neither the
Federal nor State governments gain the upper hand. This makes undoubtedly for
an inefficient system of government, but I don't think that the founding fathers had
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JS-437: Assistant Secretary Abernathy's Remarks to State B a n k Supervisors
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efficient government as a goal w h e n they divided authority between a Federal
government and the States, and further divided Federal authority a m o n g three
separate branches, and split the Congress into two separate and very different
Houses. No, that w a s not very efficient government, but it has proven a very
efficient m e a n s of preserving individual liberty, and I suspect that this w a s the
outcome that the architects of the Constitution had in mind. It is that liberty, that
liberty to create, to experiment, to innovate, that has placed this country in the
forefront of so m a n y things that better the lives of our citizens, financial services
being high on the list.
With a government of the people, by the people, and for the people, government
must add to the quality of our lives for it to be tolerated. Our dual banking system is
a powerful governor for ensuring that bank regulation meets the needs of our
people, that it adds to the vitality and versatility and creativity of our economy.
Let us take a look at "predatory lending" as a case in point. And, by the way, let me
digress just a moment. A m o n g all the attention that has been paid to predatory
lending, I a m eager for attention to be turned as well to predatory borrowing. I have
in mind the person w h o in a calculated w a y borrows as much m o n e y as he can,
with little thought of paying it back or, in s o m e cases, with a premeditated intention
of not paying it back—the person w h o takes advantage of all of the statutes created
to protect the truly unfortunate, w h o perhaps even plans to take advantage of
generous bankruptcy homestead protections, w h o amasses as m u c h debt from
other people's money, and then declares bankruptcy as the final stage in a
predatory borrowing plan. Hopefully, Congress will succeed this year in adopting
the long forestalled bankruptcy reform legislation that will get at s o m e of these
predatory borrowers. I hope that will happen, and soon. It has been delayed too
long.
Is the predatory borrower rare? I hope so. I suspect that he is as rare as the
predatory lender. And w e need to act against both.
Now with regard to the dual banking system and predatory lending, I need to take
care whenever I discuss the subject of predatory lending. All of us m a y not be in
agreement on what w e m e a n by it. I think that it is something like aggressive
driving. It reminds m e of aggressive driving. W e are all familiar with the campaigns
against aggressive driving. I'm sure that w e support those campaigns, because w e
have all likely been witnesses to aggressive driving. You all know what I m e a n
w h e n I a m talking about aggressive driving. It's not really a n e w crime in and of
itself. It is a label attached to a group of unsafe driving practices, each illegal in and
of itself: speeding, tailgating, illegal lane changes, and the like. There is a law
against each of these practices. By and large what w a s n e w about aggressive
driving w a s the law enforcement effort focused on curbing these practices.
Penalties were increased, law enforcement officials were put on the look out, the
population in general w a s sensitized. And a lot of progress w a s m a d e against the
problem.
I think that predatory lending may be much like aggressive driving. In my previous
job I worked on Capitol Hill, for the Senate Banking Committee. In an effort to
c o m e to grips with concerns raised about predatory lending, w e asked each of the
banking regulators to give us a definition of it and share with us their statistics on
h o w prevalent the practice was. At the time—and this w a s a few years ago—not a
single banking regulator could give us a definition of predatory lending. It w a s no
surprise, then, that neither could they give us statistics on its prevalence. If you
can't define it, you can't measure it. They could offer us anecdotes, examples of
what they termed predatory lending.
These included practices such as fraudulent loan terms, changing conditions
without the knowing consent of the customer, offering loans to people w h o had no
real possibility of meeting loan payments, hidden fees, and so forth. Each of these
is already a violation of banking laws and regulations.
So, if like aggressive driving, predatory lending signifies an increased focus on
enforcing the existing laws against these practices, then I a m sure that all but the
predators would be in favor of that enforcement effort. Much to m y dismay,
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JS-437: Assistant Secretary Abernathy's Remarks to State B a n k Supervisors
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however, so many anti-predatory lending proposals are more focused on products
than they are on practices. And there I fear the effort goes astray, far astray.
Over the last several years, State and national banks have made enormous strides
in expanding the reach of their services. Millions of people are n e w customers of
mainstream financial institutions. These are people w h o used to be on the outside,
looking in, people on the periphery, customers of the more informal providers of
financial services. N o w they have a mortgage, a checking account, a savings
account, an IRA, a credit card, and many other banking services. I don't want to do
anything that takes us back. I don't want to do anything that slows down our
progress. W e need to facilitate the outreach and innovation that best meets the
needs of consumers, all consumers.
But so many of the anti-predatory lending proposals would undermine that
progress. They cut people off. They put financial services out of reach, because
they focus on products rather than on bad practices. I a m not willing to sign up for
a program that says that subprime lending, for example, is bad. Bad subprime
lending, badly underwritten, or fraudulently offered, is bad. But a good loan is a
good loan, be it prime or subprime. The s a m e is true for other financial products.
Let's take a look at another example, loans with balloon payments. These products
m a k e it onto the lists of predatory lending proposals; balloon payments can be
found on the prohibited lists. Are balloon payments evil products, or do bad actors
put them to bad service?
Consider the young family, just starting out, John and Sarah Jones. Both John and
Sarah have nice, early career jobs with bright prospects. They have worked hard
and saved even harder. They have accumulated their nest egg for what they
dreamed of in those dreamy days before they were married: a house of their own.
They nourished that dream with every dollar they put away for building a down
payment. N o w they have the down payment. But now they also have a problem.
Actually, it shouldn't be a problem. John and Sarah don't see it as a problem. They
are delighted. They are expecting their first child. They would like to bring the baby
home, to their own home. Sarah wants to stay h o m e with the baby, at least for a
while. But that m e a n s that their double income will soon reduce to a single income,
at least for a while.
An innovative industry will say, "We have just the loan product for you. It has what
is called a balloon payment. Under this loan, you pay a reduced monthly payment
for the first five years, and then you pay a higher monthly payment afterwards. In
essence, for the first five years you are deferring part of the payments until later."
This works perfectly for the Jones family. They get into their house today, with
payments that they can afford while they are a one-income family, with later higher
payments that they can afford when Sarah returns to work or maybe when John is
making much more than he does now.
But wait! Not so fast! Under some proposals, that loan would be labeled predatory
lending. Maybe John and Sarah think that this product is tailor-made for them. But
balloon payment loans are on s o m e financial regulatory proscriptions. S o m e would
say to John and Sarah, "No, you can't go there. Too dangerous. You just keep
renting for a while, and then after a few more years, maybe then you can buy your
own house."
That is the kind of answer we get when we focus our attention on banning products
rather than bad practices. Keeping John and Sarah out of a house of their o w n is
unlikely to add quality to the lives of this family. It would be an intolerable
regulatory restriction on their choices.
But the dual banking system says to John and Sarah that they do not have to live
with that answer. While s o m e communities, in perhaps an exercise more of good
intentions than wisdom, are banning products that bring people into the financial
mainstream, the national bank regulator, the Comptroller of the Currency, is turning
a bright focus on bad practices while preserving innovation in products. Where a
local law might keep John and Sarah in their apartment for several more years,
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JS-437: Assistant Secretary Abernathy's Remarks to State Bank Supervisors
Page 5 of 5
national banks might offer a product that fits their family needs today.
Now, I want to be clear. Any financial product can be abused. Balloon payment
loans have been instruments of abuse. But it w a s the way that the balloon payment
w a s used that w a s abusive. It need not be used that way. Properly disclosed and
understood, such a loan can be a useful product for consumers.
I also want to be clear on what I am praising. It is the dual banking system. It is the
system that says that the right answer is in a national bank one day, in a Statechartered bank the next. And the right answer is what best serves the needs of
America's consumers. Today, it m a y be the focus of the Comptroller on bad
practices rather than on banning products. Yesterday, it w a s the State bank that
offered an adjustable rate mortgage, or paid interest on a checking account. What
and where will it be tomorrow? I don't know. But I a m glad that America has a
strong dual banking system to let it happen. And in exercising their freedom,
American consumers will find it.
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JS-438: M E D I A A D V I S O R Y U.S. Treasury to Designate Al-Aqsa International Foundati... Page 1 of 1
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 29, 2003
JS-438
MEDIA ADVISORY
U.S. Treasury to Designate Al-Aqsa International Foundation A s Financier of
Terror
Charity Linked to Funding of the H a m a s terrorist organization
This afternoon, the Treasury Department will announce the designation of the AlAqsa Foundation as a Specially Designated Global Terrorist (SDGT) entity under
Executive Order 13224. The designation by Treasury's Office of Foreign Assets
Control (OFAC) requires that ail assets of the Al-Aqsa Foundation be blocked and
transactions with the organization prohibited. More details to follow in a separate
release.
Juan Zarate, Deputy Assistant Secretary of the Treasury for Terrorist Financing and
Financial Crimes and Director of Treasury's Executive Office for Terrorist Financing
and Financial Crimes and Richard Newcomb, Director of the Office of Foreign
Assets Control (OFAC) will provide a pen and pad briefing this afternoon at 2:00
PM.
WHAT: Briefing on the Designation of the Al-Aqsa Foundation
W H E N : 2:00 P M
W H E R E : R o o m 4312, Main Treasury Building
PARTICIPANTS: Juan Zarate, D A S Terrorist Financing and Financial Crimes
Richard Newcomb, Director of O F A C
C O V E R A G E : Pen and Pad Only
Media without Treasury or White House press credentials planning to attend should
contact Frances Anderson at Treasury's Office of Public Affairs at (202) 622-2960
or e-mail frances.anderson@do.treas.gov as soon as possible with the following
information: name, social security number and date of birth. This information may
also be faxed to (202) 622-1999.
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JS-439: Treasury Designates Al-Aqsa International Foundation as Financier of Terror
Page 1 of 2
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 29, 2003
JS-439
Treasury Designates Al-Aqsa International Foundation as Financier of Terror
Charity Linked to Funding of the H a m a s Terrorist Organization
W A S H I N G T O N , D C - The U.S. Treasury Department has designated the Al-Aqsa
Foundation as a Specially Designated Global Terrorist (SDGT) entity under
Executive Order 13224. A s a result of this designation by Treasury's Office of
Foreign Assets Control (OFAC), all assets of the Al-Aqsa Foundation are blocked
and transactions with the organization are prohibited.
"By designating the Al-Aqsa Foundation, we have deprived the Hamas terrorist
organization of a vital source of funding and have shut off yet another pipeline of
money financing terror. Today's action demonstrates our commitment to prevent
the perversion of charitable organizations for terrorist ends," Secretary S n o w stated.
Al Aqsa is a critical part of Hamas' terrorist support infrastructure. Through its
headquarters in Germany and branch offices in the Netherlands, Denmark,
Belgium, Sweden, Pakistan, South Africa, Y e m e n and elsewhere, Al Aqsa funnels
money collected for charitable purposes to H a m a s terrorists.
Other nations, including the Netherlands, Germany, Denmark, Britain, Luxembourg
and Switzerland, have also taken action against the Al-Aqsa Foundation.
The Al Aqsa Foundation is the 18th financier of terror disguised as a charitable
organization designated by the Treasury Department. With today's action, there
are now 264 individuals and entities designated as S D G T s and over $137 million in
their assets frozen worldwide.
Further details on the Al-Aqsa Foundation are attached.
Background: AL-AQSA FOUNDATION
AKAs: Al-Aqsa International Foundation, Al-Aqsa Charitable Foundation, Sanabil
al-Aqsa Charitable Foundation, Al-Aqsa Sinabil Establishment, Al-Aqsa Charitable
Organization, Charitable Al-Aqsa Establishment, Mu'assa al-Aqsa al-Khayriyya,
Mu'assa Sanabil Al-Aqsa al- Khayriyya, Aqssa Society, Al-Aqsa Islamic Charitable
Society, Islamic Charitable Society for al-Aqsa, Charitable Society to Help the
Noble al-Aqsa, Nusrat al-Aqsa al-Sharif
The AL-AQSA FOUNDATION is a critical part of Hamas' transnational terrorist
support infrastructure. H a m a s is designated by the Secretary of State as a Foreign
Terrorist Organization (66 Fed. Reg. 51088) and .as Specially Designated Global
Terrorist (SDGT) under Executive Order 13224, "Blocking Property and Prohibiting
Transactions with Persons W h o commit, Threaten to Commit, or Support
Terrorism." H a m a s is known to raise at least tens of millions of dollars per year
throughout the world using charitable fundraising as cover.
The AL-AQSA FOUNDATION, until recently headquartered in Germany, uses
humanitarian relief as cover to provide support to the H a m a s terrorist organization.
M a h m o u d Amr, the Director of the A L - A Q S A F O U N D A T I O N in Germany, is an
http://www.treas.gov/press/releases/js439.htm
7/29/2003
JS-439: Treasury Designates Al-Aqsa International Foundation as Financier of Terror
Page 2 of 2
active figure in Hamas. The A L - A Q S A F O U N D A T I O N also is known to maintain
branch offices in The Netherlands, Denmark, Belgium, Sweden, Pakistan, South
Africa, Y e m e n and elsewhere. A L - A Q S A F O U N D A T I O N offices are included in lists
of organizations that contributed to the Hamas-affiliated Charity Coalition in 2001
and 2002.
Since the summer of 2002, authorities in The Netherlands, Denmark, Germany and
the U.S. have taken administrative and/or law enforcement action against the ALA Q S A F O U N D A T I O N and some of its leaders based on evidence of the
organization's support for H a m a s and other terrorist groups. Pursuant to a July 31,
2002 administrative order, German authorities closed the A L - A Q S A F O U N D A T I O N
in Germany for supporting Hamas. In April 2003, Dutch authorities blocked ALA Q S A F O U N D A T I O N assets in The Netherlands based on information that funds
were provided to organizations supporting terrorism in the Middle East.
Criminal charges against some AL-AQSA FOUNDATION officials were also filed.
O n January 1, 2003, the Danish government charged three A L - A Q S A
F O U N D A T I O N officials in Denmark for supporting terrorism. Also, the head of the
Yemeni branch of the A L - A Q S A F O U N D A T I O N , Shaykh M u h a m m a d AH Hassan
A L - M U A Y A D , was arrested for providing support to terrorist organizations including
Al-Qaeda and H a m a s in January 2003 by German authorities.
In Scandinavia, the Oslo, Norway-based Islamic League used the AL-AQSA
F O U N D A T I O N in Sweden to channel funds from some members of the Islamic
community in Oslo, Norway to Hamas.
In late 2001 for example, a human courier was used to transfer funds from the
Islamic League in Norway to the AL- A Q S A F O U N D A T I O N in Sweden. In another
instance in 2002, money, gold and jewelry were collected by the Islamic League (in
Oslo, Norway) and transferred to the AL-AQSA F O U N D A T I O N in Sweden to be
provided to Hamas.
At the Islamic League of Norway's annual conference held on May 18 and 19,
2002, the General Secretary of the Islamic League in Sweden urged all Muslims to
provide support and to participate in continuing the suicide operations against
Israel. H e called for further financial support from all conference participants to the
A L - A Q S A F O U N D A T I O N in Sweden, noting that this financial support could
contribute to the destruction of Israel.
Strong ties have existed between the Hamas and AL-AQSA FOUNDATION offices
in Yemen. Officials of the organizations met frequently and the A L - A Q S A
F O U N D A T I O N was identified as a "Hamas-affiliate." As discussed in a previously
unsealed FBI Affidavit, A L - M U A Y A D , the head of the A L - A Q S A F O U N D A T I O N in
Yemen, has allegedly provided money, arms, recruits and communication
equipment for Al-Qaeda. At least until AL-MUAYAD's arrest, AN Muqbil, the
General Manager of the A L - A Q S A F O U N D A T I O N in Y e m e n and a H a m a s official,
transferred funds on AL-MUAYAD's orders to Hamas, PIJ or other Palestinian
organizations assisting "Palestinianfighters."The disbursements were recorded as
contributions for charitable projects. Through channels such as this, A L - M U A Y A D
reportedly provided more than U.S. $3 million to the "Palestinian cause".
HEAD OFFICE:
Aachen, Germany
BRANCH OFFICES:
Rotterdam, Holland
Copenhagen, Denmark
Brussels, Belgium
San'a, Y e m e n
Malmo, Sweden
Johannesburg, South Africa
Islamabad, Pakistan
ittp://www.treas.gov/press/releases/js439.htm
7/29/2003
DEPARTMENT
OF
THE
TREASURY
•' ',' H '1
TREASURY
NEWS
O I H l I OK IM Bill A M M R S • 15001'! \\s\l.\ \\l \ \V !•'. M I, \.\V. • \\ AMI I M i T O V [>.(.• 2022U • (202 I 6 22-29MJ
EMBARGOED UNTIL 11:00 A.M.
May 29, 2003
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 $36,000
million to refund an estimated $31,566 million of publicly held 13-week and 26-week
Treasury bills maturing June 5, 2003, and to raise new cash of approximately $4,434
million. Also maturing is an estimated $24,000 million of 2-day Treasury cash
management bills to be issued June 3, 2003, and an estimated $6,000 million of
publicly held 4-week Treasury bills, the disposition of which will be announced June
2, 2003.
The Federal Reserve System holds $15,145 million of the Treasury bills maturing
on June 5, 2003, 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 June 3, 2003. 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 $100 million per account and will be accepted
in the order of smallest to largest, up to the aggregate award limit of $1,000
million.
TreasuryDlrect customers have requested that we reinvest their maturing holdings
of approximately $1,075 million into the 13-week bill and $774 million into the 26week 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.
oOo
Attachment
^J
S q-14 o
HIGHLIGHTS OF TREASURY OFFERINGS OF BILLS
TO BE ISSUED JUNE 5, 2003
May 29, 2003
Offering Amount
$18,000
Maximum Award (35% of Offering Amount)
$ 6,300
Maximum Recognized Bid at a Single Rate .... $ 6,300
NLP Reporting Threshold
$ 6,300
NLP Exclusion Amount
$ 5,500
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
million
million
million
million
million
91-day bill
912795 NL 1
June 2, 2003
June 5, 2003
September 4, 2003
March 6, 2003
$21,339 million
$1,000
$18,000
$ 6,300
$ 6,300
$ 6,300
None
million
million
million
million
182-day bill
912795 NZ 0
June 2, 2003
June 5, 2003
December 4, 2003
June 5, 2003
$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 $100
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 (NLP) for each bidder must be reported when the sum of the total bid amount, at all
discount rates, and the net long position equals or exceeds the NLP reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the closing time for receipt of
competitive tenders.
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.
O n : H I. O r Pl'BI.W. AM-'MkS • 1500 PKNNSYI.VAM \ AY K M I!. N.\\'. • U ASH I N C I O N , DA .• 2022U • (21*2 I 6 2 2.2<>M1
FOR IMMEDIATE RELEASE
May 29, 2003
CONTACT: Office of Financing
202/691-3550
TREASURY OFFERS CASH MANAGEMENT BILLS
The Treasury will auction approximately $24,000 million of 2-day
Treasury cash management bills to be issued June 3, 2003.
Tenders for Treasury cash management bills to be held on the book-entry
records of TreasuryDirect will not be accepted.
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 $100 million
per account and will be accepted in the order of smallest to largest, up
to the aggregate award limit of $1,000 million.
Note: The closing times for receipt of noncompetitive and competitive
tenders will be at 11:00 a.m. and 11:30 a.m. eastern daylight saving time,
respectively.
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%.
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.
oOo
Attachment
C
HIGHLIGHTS OF TREASURY OFFERING
OF 2-DAY CASH MANAGEMENT BILLS
May 29, 2003
Offering Amount $24,000 million
Maximum Award (35% of Offering Amount) .. $ 8,400
Maximum Recognized Bid at a Single Rate . $ 8,400
NLP Reporting Threshold
$ 8,400
NLP Exclusion Amount
$13,200
million
million
million
million
Description of Offering:
Term and type of security
2-day Cash Management Bill
CUSIP number
912795 MQ 1
Auction date
June 2, 2003
Issue date
June 3, 2003
Maturity date
June 5, 2003
Original issue date
December 5, 2002
Currently outstanding
$52,711 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 $100
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 (NLP) for each bidder must be reported when the sum of the
total bid amount, at all discount rates, and the net long position equals or
exceeds the NLP reporting threshold stated above.
(3) Net long position must be determined as of one half-hour prior to the
closing time for receipt of competitive tenders.
Receipt of Tenders:
Noncompetitive tenders:
Prior to 11:00 a.m. eastern daylight saving time on auction day
Competitive tenders:
Prior to 11:30 a.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, D C 20239
TREASURY SECURITY AUCTION RESULTS
BUREAU OF THE PUBLIC DEBT - WASHINGTON DC
FOR IMMEDIATE RELEASE
May 29, 2003
CONTACT:
Office of Financing
202-691-3550
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Interest Rate:
Series:
CUSIP No:
1 1/4%
L-2005
912828BB5
High Yield:
Issue Date:
Dated Date:
Maturity Date:
1.305:
Price:
June 02, 2003
May 31, 2003
May 31, 2005
99.892
All noncompetitive and successful competitive bidders were awarded
securities at the high yield. Tenders at the high yield were
allotted 84.45%. All tenders at lower yields were accepted in full.
Accrued interest of $ 0.06831 per $1,000 must be paid for the period
from May 31, 2003 to June 02, 2003.
AMOUNTS TENDERED AND ACCEPTED (in thousands)
Tender Type
Tendered
Accepted
Competitive
Noncompetitive
FIMA (noncompetitive^
43,427,010
885,701
40,000
24,074,363
885,701
40,000
SUBTOTAL
44,352,711
25,000,064 1/
6,020,233
6,020,233
50,372,944
31,020,297
Federal Reserve
TOTAL
Median yield
1.274%: 50% of the amount of accepted competitive tenders
was tendered at or below that rate. Low yield
1.235%:
5% of the amount
of accepted competitive tenders was tendered at or below that rate.
Bid-to-Cover Ratio = 44,352,711 / 25,000,064 = 1.77 .
1/ Awards to TREASURY DIRECT = $715,657,000
http://www.publicdebt.treas.gov
js wz
JS-443: Emergency Grant helps Maine Launch Treasury and IRS Health Care Tax Credit... Page 1 of
F R O M T H E OFFICE O F PUBLIC AFFAIRS
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May 29, 2003
JS-443
Emergency Grant helps Maine Launch Treasury and IRS
Health Care Tax Credit Pilot Program
Today Treasury Secretary John S n o w announced that Maine will partner with the
federal government in launching the first advance health coverage tax credit pilot
program to help cover the cost of health insurance premiums for many Maine
residents.
The Trade Adjustment Assistance Act President Bush signed into law last year
includes the new Health Coverage Tax Credit (HCTC). This program provides an
advanced payment of 6 5 % of the premium cost for a qualified health plan for
individuals who are eligible to receive Trade Adjustment Assistance (TAA) benefits
or certain individuals w h o receive pension benefit payments from the Pension
Benefit Guaranty Corporation (PBGC). Approximately 2,800 workers and their
families in Maine are estimated to qualify for the program.
The Maine pilot program will allow eligible individuals to register immediately for the
advance H C T C program, which will otherwise start August 1, 2003 for the rest of
the country.
"Maine's pressing needs and can-do spirit make it the logical choice for the first in
the nation advance health coverage tax credit pilot program. Today, w e will help
people in Maine w h o have been hurting pay for health insurance," stated Treasury
Secretary John Snow. "I know many residents in Maine and across America have
been hard hit by the economic downturn that dates back to 2000. Our recovery is
not as robust as it needs to be. That's why the President is acting to get the
economy going again with his Jobs and Growth plan, and to address the health
insurance needs in Maine in this new and innovative way."
Maine residents that are eligible for the pilot program will receive a HCTC
notification letter in the mail and an H C T C Program Kit. The Program Kit provides
all the necessary information to determine eligibility and the form to register.
The HCTC advance payment program will be available in other states beginning
August 1, 2003. For more information on a particular state and the health insurance
programs that qualify, please visit the H C T C website at www.irs.gov and enter IRS
Keyword: H C T C .
Attached is a copy of the HCTC letter and the HCTC Program Kit that is being sent
to the Maine residents that may be eligible for the pilot program.
Related Documents:
http ://www.treas. sov/press/releases/j s443 .htm
7/29/2003
JS-443: E m e r g e n c y Grant helps M a i n e L a u n c h Treasury and I R S Health Care T a x Credit... P a g e 2 of 2
•
•
•
•
Maine N E G Press Release Pol
Letter
Program Kit
Registration Form
http:7Avww.treas.gov press releases/js443.htm
7/29/2003
News Release
U.S. Department of Labor For Immediate Release
Office of Public Affairs
Washington, D.C.
U S D L [03-274]
Date: M a y 29, 2003
Contact: Elissa Pruett
Phone: (202) 693-4676
New Labor Grant To Maine Will Help Trade-Impacted Worke
Pay For Health Insurance
Secretary of Labor Elaine L. Chao Announces Over $9.3 Million
Grant To Help Workers Pay Health Insurance Premiums
WASHINGTON— U.S. Secretary of Labor Elaine L. Chao today announced a National Emergency Grant
of over $9.3 million that will pay 65 percent of qualified health insurance premiums for an estimated 2,800
Maine workers eligible for assistance under the Trade Adjustment Reform Act of 2002 and certain
individuals w h o receive pension benefit payments from the Pension Benefit Guaranty Corporation
(PBGC).
President Bush signed the Health Coverage Tax Credit (HCTC) program into law last year as part of the
Trade Adjustment Assistance Act. The Department of Labor grant allows the State of Maine to
immediately fund the costs of the program, ensuring that eligible Maine workers and their families have
the help they need to pay their health insurance premiums. The grant provides health insurance premium
assistance to recipients until the advance tax credit is operating in August 2003. The H C T C program is
under the jurisdiction of the Internal Revenue Service.
"The President and I are committed to helping displaced workers access the help they need to support a
care for their families. W e realize that nothing is more important to the people of Maine than the health of
their loved ones. That is w h y w e made it a priority to work with Senator Snowe and Senator Collins to
ensure these funds are directed to Maine as soon as possible," Chao said. " W e hope they will be deployed
as quickly as possible to help these Maine workers pay their health insurance premiums and bring them
some peace of mind."
Under a special pilot program with the State of Maine, the Internal Revenue Service will ensure Maine
residents eligible for the pilot program receive a H C T C notification letter in the mail and an H C T C
Program Kit. The Program Kit provides all the necessary information to determine eligibility and the form
to register.
"Helping American workers who have lost their jobs remains a top priority for this Administration," sa
Chao.
For more information on a particular state and the health insurance programs that qualify, please visi
H C T C website at www.irs.gov and enter IRS Keyword: H C T C . For more information on the Department
of Labor's assistance for trade impacted workers please go to www.dol.gov.
###
U.S. Labor Department news releases are accessible on the Internet at www.dol.gov. The information in this release will be
made available in alternative format upon request (large print, Braille, audio tape or disc) from the C O A S T office. Please
specify which news release when placing your request. Call 202-693-7773 or T T Y 202-693-7755.
Federal • State • Private Industry
Health Coverage
Tax Credit
Starting in July, the n e w Health Coverage Tax Credit (HCTC) could pay 6 5 % of the eligible premium
you pay for a qualified health plan. This federal tax credit was passed by Congress and signed into
law by President George W . Bush on August 6, 2002.
Am I Eligible?
We believe you may be eligible because you receive either Trade Adjustment Assistance (TAA) ben
or pension benefit payments from the Pension Benefit Guaranty Corporation (PBGC). In addition,
you must meet certain requirements to be eligible to receive the H C T C . O n e of these requirements is
that you be enrolled in a qualified health plan. Only certain types of health plans qualify for the
H C T C . You should review page 6 of the enclosed Program Kit to determine if your current health
plan is qualified. Currently, the H C T C state-qualified health plan for Maine is A n t h e m Blue
Cross a n d Blue Shield of Maine. Questions regarding enrollment in this plan should be directed to
Tanya Plante at the State of Maine Employee Health and Benefits Department (1-800-422-4503,
ext. 76789; or email at tanya.l.plante@maine.gov).
Two Options
If you are eligible and are enrolled in a qualified health plan, you have two options for claimi
credit:
1. Claim the HCTC on your federal tax return for eligible payments you made directly to a qualified health plan during the year. (This is also the w a y to obtain the tax credit for any eligible
premiums that you paid for a qualified plan before you registered in the H C T C program.)
2. Claim and receive the HCTC in advance by registering for the HCTC program. This program
combines your share of your health plan premium for each m o n t h with a 6 5 % advance
payment of the federal tax credit. The combined payment will then be sent to the health
plan o n your behalf.
Register Now for the July Advance Payment Option
In most of the country, registration for the HCTC program will begin in August. However, the Sta
of Maine and the Internal Revenue Service have developed a pilot program that allows you to register
n o w to begin receiving the advance payment tax credit earlier. If you meet the eligibility criteria
and are enrolled in a qualified plan, complete the enclosed H C T C Registration Form using the
Program Kit as a guide. To receive the advance payment for coverage beginning in July, you
must bring your completed Registration F o r m to an H C T C Registration Session during the
w e e k of June 9th. You should receive a separate letter that provides details about these sessions.
If You Cannot Attend a Registration Session
If you cannot attend an HCTC Registration Session, you may still participate in the pilot, but y
will receive the advance payment for coverage beginning in August instead of July. Mail your
Registration Form to the H C T C program in the enclosed postage-paid envelope. The H C T C program
must receive your Registration Form by July 7 in order to successfully process your registration, send
you an invoice, receive your payment, and send it along with the 6 5 % advance credit to your health
plan administrator for coverage beginning in August.
Until you receive your first invoice from the HCTC program, you should continue paying
1 0 0 % of your health plan p r e m i u m directly to your health plan administrator.
For general information on the HCTC program or the enclosed materials, please visit the IRS.gov
site at www.irs.gov and enter IRS Keyword: H C T C . You m a y also call the H C T C Customer Contact
Center at 1-866-628-HCTC (TDD/TTY: 1-866-626-HCTC).
Introducing a n e w program that can pay nearly
two-thirds of your health plan premiums.
Federal • State • Private Industry
Health Coverage
Tax Credit
Step Q Verify Your Eligibility
pages 4-5
^ Determine if Your Health Plan
StGp Z is Qualified
page 6
Step Q Claim the Credit
pages 7-8
Stfip 4
pages 9-11
0
Your Payment Responsibility
Step Q Frequently Asked Questions
page 12
Since you have received this kit, you m a y be eligible to claim the
Health Coverage Tax Credit (HCTC). This important benefit pays
6 5 % of your qualified health plan premiums for as long as you
remain eligible. That means you can save 65 cents out of every
dollar you're paying now. You can even claim the credit if you
don't owe any federal income tax.
Please note that this is not a government health insurance program; it is a federal
tax credit.
In general, you m a y claim this credit if:
You are receiving certain Trade Adjustment Assistance (TAA) benefits,
You are receiving benefits under the Alternative Trade Adjustment Assistance
(ATAA) program, or
You are receiving benefits from the Pension Benefit Guaranty Corporation
(PBGC) and you are at least 55 years old
In addition, you must be enrolled in a qualified health plan (see Step 2,
"Determine if Your Health Plan Is Qualified'' to learn what plans qualify).
There are two ways to receive the credit:
As an advance tax credit to help pay for monthly health plan premiums as
they become due, or
As a lump s u m w h e n you file your 2003 federal tax return
This kit will take you step by step through the process of determining whether
you are eligible for the credit. If you appear to be eligible, this kit will guide you
through the registration process. Please follow the instructions carefully so you
and your family can receive the full benefit of this program.
Verify Your Eligibility
D o a n y of the following describe you? If you fit into any of the following
categories, you m a y be eligible to receive the credit:
1. You receive a Trade Readjustment Allowance (TRA) under the Trade Adjustment
Assistance (TAA) program.
2. You are eligible for T R A under the T A A program but have not used up your
unemployment insurance (UI) benefits.
3. You receive benefits under the Alternative Trade Adjustment Assistance
(ATAA) program.
4. You receive pension benefits from the P B G C or you received a lump sum payment
from the P B G C after August 5, 2002 and you are at least 55 years old. Benefits
received as a survivor, a beneficiary, or an alternate payee under a qualified
domestic relations order also qualify if you are at least 55 years old.
If you have questions about T R A benefits under T A A or about ATAA, you can call
your local state workforce agency for more information. You can also contact the
Department of Labor Employment and Training Administration at 1-800-US-2JOBS.
If you have questions about pension benefits from the P B G C , you can call them
at 1-800-400-7242.
Y o u are not eligible for the H C T C if a n y of the following applies to you:
You are enrolled in a health plan maintained by an employer or former
employer that pays at least 5 0 % of the cost of the coverage
You are entitled to Medicare Part A or enrolled in Medicare Part B
You are enrolled in the Federal Employees Health Benefits Program (FEHBP),
Medicaid, or State Children's Health Insurance Program (SCHIP)
You are entitled to health coverage through the U.S.
military health system
(Tricare/CHAMPUS)
You can be claimed as a dependent on someone else's 2003 federal tax return
As of the first day of the current m o n t h in which you are eligible, you are
imprisoned under a federal, state or local authority
Additional Requirements:
You must choose a qualified health plan (see Step 2, "Determine If Your Health
Plan Is Qualified").
You must be enrolled in this qualified health plan on the 1st day of the m o n t h
in which you plan to claim the credit.
Verify Your Eligibility, continued
H C T C m a y cover y o u r family too!
If you are eligible, you can use the credit to help purchase qualified health
coverage for your qualified family members.
Qualified family members are:
• Your spouse, and
• Dependents that you can claim on your federal tax return (see note below)
You cannot claim the H C T C for a qualified family m e m b e r w h o is any of
the following:
Enrolled in a health plan maintained by an employer or former employer
that pays at least 5 0 % of the cost of the coverage
Entitled to Medicare Part A or enrolled in Medicare Part B
Enrolled in the Federal Employees Health Benefits Program (FEHBP),
Medicaid, or State Children's Health Insurance Program (SCHIP)
Entitled to health coverage through the U.S.
(Tricare/CHAMPUS)
military health system
If you and your spouse are both HCTC-eligible and are covered by the same
plan, only one of you needs to register in order for both of you to receive the
credit. The person w h o didn't apply is considered a qualifying family member.
O n the other hand, if you are both HCTC-eligible and have different health
plans, you must register separately in order to receive the credit. In addition,
each of you will need to complete and attach the IRS Form 8885 to your federal
tax return(s).
Note: Children of divorced parents are treated as dependents of the custodial
parent for the purposes of the H C T C . The non-custodial parent m a y not claim
the credit even if she or he is entitled to claim the tax exemption for the child
or carries the child's health insurance.
Determine if Your Health Plan is Qualified
Remember, you must be enrolled in a qualified health plan to claim the credit.
Please note that enrolling in a qualified health plan does not guarantee you wil
receive the H C T C .
The following types of health coverage are qualified:
C O B R A continuation coverage, unless the employer or former employer pays at
least 5 0 % of the premium cost
Individual coverage* in which you were enrolled for at least the last 30 days
before you were separated from the job that m a d e you eligible for T R A benefits,
A T A A benefits, or payments from the P B G C
State-qualified health plans (you can get a current list from the H C T C
Customer Contact Center at 1-866-628-HCTC)
Your husband's or wife's insurance from work, if the employer contributes less
than 5 0 % of the total health plan premium. (At this time, you can only claim
the credit with this type of coverage w h e n you file your federal tax return and
not in advance.)
A r e y o u currently uninsured? If you do not have any health coverage and
you think you're eligible for the H C T C , contact a qualified health plan to enroll.
Verify the coverage terms with the health plan and decide if they are acceptable
to you. Keep copies of all of your 2003 health plan invoices for your records.
You must be enrolled in a qualified
health plan to claim the HCTC.
•Individual coverage provided under a contract issued to one individual or family at a time usually requiring
evidence of insurability and usually purchased through agents, brokers, or associations.
Claim the Credit
You can receive your Heath Coverage Tax Credit either monthly or w h e n you
file your 2003 federal tax return.
W e r e c o m m e n d y o u k e e p the following: health plan policy information,
health plan invoices, proof of payment, and H C T C program invoices (for
advance tax credit only).
If y o u w o u l d like to receive y o u r H C T C benefit m o n t h l y :
1. Enroll in an HCTC-qualified health plan, if you have not already done so
(see Step 2, "Determine if Your Health Plan is Qualified" for more information).
2. Complete the H C T C Registration Form in this kit.
3. Enclose the completed Registration Form, a copy of your current health plan
invoice, and a copy of your C O B R A election letter (if applicable) in the postagepaid envelope provided to you. If you misplaced the envelope, mail these items to
H C T C Processing Center
P.O. Box 218386
Houston, T X 77218-8386
4. If you have questions regarding the Registration Form, please contact the
H C T C Customer Contact Center at 1-866-628-HCTC. (TDD/TTY callers,
please call 1-866-626-HCTC.)
5. The H C T C program will process your Registration Form. You will receive a
confirmation letter if you are successfully registered for the advance H C T C
program. However, this does not complete all the steps necessary to be an
active participant. Read your confirmation letter carefully. It includes some
steps you must follow to actually begin receiving the credit in advance.
6. You will receive an invoice from the H C T C program. Return your specified
payment in the envelope included with this invoice. W h e n your first
payment is processed successfully, you should send future payments to the
H C T C program instead of to your health plan administrator.
For detailed payment instructions, see Step 4, "Your Payment Responsibility."
Claim the Credit continued
Important notes o n the advance tax credit
• Keep paying your insurance bill in full until you receive an invoice from
the H C T C Processing Center (approximately four to six weeks after you
mail in the registration form).
• You will receive Form 1099-H or substitute Form 1099-H at the end of the
year. Form 1099-H provides the amount of advance tax credit you have
received and the months for which you have received it in 2003. It should
be issued to you by February 2, 2004. You will need it to help you determine the amount, if any, of your credit on IRS Form 8885.
• If you are eligible for the H C T C and you have health coverage through
your husband's or wife's employer, advance payment of the tax credit is not
currently available to you. In such case, you m a y be able to claim the credit w h e n you file your 2003 federal tax return.
• At this time, if you have qualified family members covered under a separate
health plan policy, you can only claim the H C T C for their eligible premium
amounts on your federal tax return.
If y o u w o u l d like to claim your H C T C benefit w h e n y o u file your
2003 federal tax return
1. Continue to pay your qualified health plan premiums in full each month.
2. Complete IRS Form 8885 to claim the credit. Submit it with your IRS Form
1040, 1040NR, 1040SS, or 1040PR.
Be sure you continue paying
your health plan administrator
until you are registered and
receive an HCTC invoice.
Your Payment Responsibility
The HCTC program will cover 65% of your eligible premium amount. The eligible premium amount covers major medical plans for you and qualified family members. Please note: Exceptions such as vision and dental coverage are
not considered part of the eligible premium amount (except w h e n your health
plan includes them in your major medical care premium).
If desired, use this worksheet to estimate your monthly payment
responsibility. Y o u will need your m o s t recent health plan invoice.
1. Enter the total health plan premium that you pay per month
for yourself and any qualified family member(s).
(1)
2. Enter the total of any premiums you pay per month for
exceptions (for example, vision and dental coverage).
(2)
3. Subtract line 2 from line 1. This is your monthly eligible
premium amount.
(3)
4. Multiply line 3 by 3 5 % (.35) and enter the result.
(4)
5. Add lines 2 and 4.
(5)
6. Enter the amount of any health plan premium you pay for
non-qualified individuals.
(6)
7. Add lines 5 and 6. This is an estimate of your contribution
as part of the H C T C advance tax credit program.
(7)
8. Subtract the amount on line 4 from the amount on line 3.
This is an estimate of what you will save through the
H C T C credit.
(8)
How do I make my payment? Each month you will receive an invoice
from the H C T C Processing Center. You must pay your portion in full by the
due date provided. Once your payment clears, the H C T C Processing Center
will add the credit amount and submit the full payment to your health plan
administrator each month for as long as you are eligible for the program.
Please note that late or missed payments m a y impact your participation in the
advance H C T C program. If you miss the H C T C deadline for your payment,
you should send your full premium amount to your health plan administrator
in order to maintain coverage.
Your Payment Responsibility, continued
The HCTC Processing Center will accept the following forms of payment:
1. Personal check 3. Money order 5. Cashier's check
2. Business check
4. Certified check
You should make your check payable to "US Treasury - HCTC." Your check must
draw U S funds from a U S bank.
To send in your payment:
1. Enclose payment for the correct amount along with the payment coupon in t
lope provided. Be sure to write the Social Security Number (SSN) or Tax Identification
Number (TIN) of the eligible individual on the check.
2. Send your payment to the US Treasury - HCTC. If you don't have the payment envelope that was sent with your invoice, you can send your payment
to this address:
US Treasury - HCTC
P.O. Box 970023
St. Louis, M O 63197-0023
You must pay your portion in full by
the due date on the HCTC invoice.
Notice to H C T C Participants Making Payment by Check
Authorization to Convert Your Check: If you send us a check to make your payment, your check will be
converted into an electronic fund transfer. "Electronic fund transfer" is the term used to refer to the process
in which w e electronically instruct your financial institution to transfer funds from your account to our
account, rather than processing your check. By sending your completed, signed check to us, you authorize
us to copy your check and to use the account information from your check to m a k e an electronic fund
transfer from your account for the same amount as the check. If the electronic fund transfer cannot be
processed for technical reasons, you authorize us to process the copy of your check.
Insufficient Funds: The electronic fund transfer from your account will usually occur within 24 hours,
which is faster than a check is normally processed. Therefore, m a k e sure there are sufficient funds
available in your checking account w h e n you send us your check. If the electronic fund transfer
cannot be completed because of insufficient funds, w e m a y try to m a k e the transfer u p to two times.
Transaction Information: The electronic fund transfer from your account will be on the account statement
you receive from your financial institution. However, the transfer m a y be in a different place o n your
statement than the place where your checks normally appear. For example, it m a y appear under "other
withdrawals" or "other transactions." You will not receive your original check back from your financial
institution. For security reasons, w e will destroy your original check, but w e will keep a copy of the check
for record keeping purposes.
Your Rights: You should contact your financial institution immediately if you believe that the electronic
fund transfer reported o n your account statement was not properly authorized or is otherwise incorrect.
Consumers have protections under a federal law called the Electronic Fund Transfer Act for an unauthorized
or incorrect electronic fund transfer.
Your Payment Responsibility, continued
Until you receive your first invoice from the HCTC program, you should continue
paying 1 0 0 % of your health plan premium directly to your health plan administrator.
Because registration takes 4 to 6 weeks to complete, you should budget to pay your
full health plan premium during that time. You will be able claim the credit for that
period when you file your federal tax return.
Make sure your health plan payments are up to date. The H C T C program is not
responsible for any balance you owe prior to receiving the advance credit and will
not bill you for this amount.
Once your first payment to the H C T C program is processed, you become an active
participant in the advance H C T C program. For any period in which you are billed
by the H C T C program, as long as you make your full payment to the program by
the due date, you do not also need to send a payment directly to your health plan
for those premium amounts. However, you m a y continue to receive invoices from
your health plan as before. (You should save these for your personal records.)
Notify the H C T C C u s t o m e r Contact Center at 1-866-628-HCTC
( T D D / T T Y : 1-866-626-HCTC) of a n y of the following changes:
Qualified family member(s) status
Health plan premium amount
Health plan benefits
Health insurance company
Health insurance product (e.g., H M O , PPO, POS)
Your personal information (e.g., your h o m e address and phone number)
Termination of health coverage
Your eligibility
If you receive a letter from the H C T C program notifying you that you are no
longer eligible for the advance tax credit, you should resume sending your full
payment to your health plan administrator to maintain coverage.
Notify the HCTC Customer Contact
Center of any changes to your personal
or health plan information.
Frequently Asked Questions About the HCTC Program
1. If I'm eligible, w h e n can I begin receiving the H C T C a n d for h o w long?
Generally, you m a y continue to receive the H C T C for as long as you meet the
eligibility requirements listed on page 4. If you are eligible for the credit
under TAA, you m a y receive the credit for one extra m o n t h after your TAA
eligibility ends.
2. If I am not a United States citizen, can I still claim the credit?
Yes, as long as you meet the program eligibility requirements.
3. If I do not owe any federal income tax, can I still claim the credit?
Yes, but you must file IRS Form 8885 with your 1040,
1040PR w h e n you file your federal tax return.
1040NR, 1040SS, or
4. If I b e c o m e employed, will I stop receiving the credit?
Going back to work will not in itself disqualify you from receiving the credit.
However, you must still continue to meet the eligibility requirements listed on
page 4 in order to remain eligible for the H C T C .
5. What is IRS Form 8885?
You should use IRS Form 8885 to claim the H C T C on your federal tax return.
This form helps you determine if you are eligible and provides instructions for
claiming the credit. You should complete and submit it along with your federal
tax return. If you do not have IRS Form 8885, call the IRS at 1-800-TAX-FORM.
You m a y also download the form at http://www.irs.gov/pub/irs-pdf/f8885.pdf.
6. What is IRS Form 1099-H?
If you claim the H C T C in advance, you will receive IRS Form 1099-H or substitute Form 1099-H. This form lists the amount of advance tax credit you
received and the months for which you received it in 2003. It is for your
records. You will need it to complete IRS Form 8885, which should be used to
claim the H C T C for those months in which you were eligible for but did not
receive the advance credit.
How Can W e Help?
It's important to be sure that both you and your health plan qualify for the
Health Coverage Tax Credit, and that you complete the Registration Form
correctly. If you have any questions after going through this kit, please
contact us. We're here to help!
Call toll-free 1-866-628-HCTC (1-866-628-4282).
TDD/TTY callers, please call 1-866-626-HCTC (1-866-626-4282).
Or visit us on the W e b at http://www.irs.gov (IRS keyword: H C T C ) .
Be sure to fill out the Registration Form
completely and correctly before
sending it in.
o
Health Coverage
Department of the Treasury
Internal Revenue Service
www.irs.gov
Publication 4181 (5-2003)
Catalog Number 36370X
Health Coverage Tax Credit
Federal • State • Private Industry
Health Coverage
Tax Credit
The Privacy Act of 1974 and the Paperwork Reduction Act of 1995 require that w h e n w e ask you for information w e must first
tell you our legal right to ask for the information, w h y w e are asking for it, and h o w it will be used. W e must also tell you what
could happen if w e do not receive it and whether your response is voluntary, required to obtain a benefit, or mandatory under
the law.
We ask for the information on this form to carry out the Internal Revenue laws of the United States. If you are eligible, section
35 of the Internal Revenue C o d e allows a credit for payments you m a d e to buy certain types of health coverage during the tax
year. Section 7527 lets you authorize your health coverage provider to receive this credit in advance in the form of monthly
payments from the Internal Revenue Service.
The information you submit is used to determine if you qualify for the advanced payment of the Health Coverage Tax Credit
(HCTC). If you fail to provide the information, or provide inaccurate information, your application m a y be denied. However,
you m a y still qualify for the H C T C w h e n you file your federal tax return.
The estimated average time to complete this form is 30 minutes. You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless the form displays a valid O M B control number. Books or records
relating to a form or its instructions must be retained as long as their contents m a y be material in the administration of any
Internal Revenue law.
Generally, tax returns and return information (tax information) are confidential, as stated in Code section 6103. However, Code
section 6103 allows or requires the Internal Revenue Service to disclose or give the information to others as described in the
Code. For example, w e m a y give the information provided to us to your health plan administrator for the purposes of the
H C T C program. W e m a y disclose the information you provide to contractors for administrative purposes. W e m a y also disclose
this information to the Department of Justice, to enforce the tax laws, both civil and criminal; to other federal agencies; to
states, the District of Columbia, and U.S. commonwealths or possessions in order to carry out their tax laws; and to certain foreign governments under tax treaties they have with the United States.
Please keep a copy of this notice for your records. It may help you if we later ask you for other information. If you have any
questions about the rules for filing and giving information, please call the H C T C Customer Contact Center at 1-866-628-HCTC
(1-866-628-4282). T D D / T T Y callers, please call 1-866-626-HCTC (1-866-626-4282).
If you have any comments concerning the accuracy of this time estimate or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova, C A
95743-0001. D O N O T send the form to this office.
Health Coverage Tax Credit Registration Form
O M B No. 1545-1842
The Health Coverage Tax Credit ( H C T C ) program must receive this form and the requested documents in order to
process your registration.
Before you begin:
Read the H C T C Program Kit to obtain definitions and to understand the eligibility requirements for you and your
family members.
Locate the health plan invoice(s) for you and any qualified family m e m b e r s and, if applicable, your C O B R A
election letter.
Complete Step 4 in the Program Kit, "Determining Your Payment Responsibility/' to understand h o w m u c h the
H C T C will contribute and h o w m u c h you must contribute to the cost of your qualified health plan.
Instructions:
1. Type or print your answers legibly in black ink (if your answers are not legible, the form can not be processed).
2. Enter your Social Security N u m b e r (SSN) or Tax Identification N u m b e r (TIN) at the bottom of each page where indicated.
3. Read the instructions for each section to understand what type of information to provide in the section.
4. Enter only valid U.S. addresses where address information is required.
5. Enter //N/A,/ in any field that does not apply to you or to your qualified family member(s).
6. Sign and date this form, where indicated.
7. Keep a copy of your completed registration form and required document for your personal records.
Part I: Complete This Part to Provide Information about You
YOUR INFORMATION
1. SSN or TIN
2. Date of Birth (mm/dd/yyyy)
3. Last N a m e
4. First N a m e
5. Middle N a m e
6. Suffix Or., II)
7. Mailing Address
8. City
9. State/Territory
10. Zip
11. Telephone N u m b e r (Include area code and extension)
Primary
Alternate
12. Preferred Language For Mailings
(Mark only one of the following)
Federal •
• •• • Private Industry
Health Coverage
Tax Credit
Page 2 of 10
• English
• Spanish
• Braille
• English - Large Print
• Spanish - Large Print
Part II: Complete This Part to Determine Your Eligibility
1. Are you any of the following:
N o Yes (Check all that apply.)
•
•
Eligible for a Trade Adjustment Allowance (TRA) under the Trade Adjustment Assistance (TAA) program.
•
•
Receiving benefits under the Alternate Trade Adjustment Assistance (ATAA) program
•
•
Receiving a pension benefit from the Pension Benefit Guaranty Corporation (PBGC)
Did y o u a n s w e r "Yes" to a n y of the choices in question 1?
•
N o . Stop; you are not eligible to register for the advance credit at this time.
D
Yes. G o to question 2.
2. Are you currently any of the following:
N o Yes (Check all that apply.)
D
•
Enrolled in a health plan maintained by an employer or former employer that pays at least 5 0 % of the cost
of the coverage
•
•
Entitled to Medicare Part A or enrolled in Medicare Part B
•
•
Enrolled in Medicaid or the State Children's Health Insurance Program (SCHIP)
•
•
Enrolled in the Federal Employees Health Benefits Program (FEHBP)
•
•
Entitled to health coverage through the U.S. military health system (Tricare/CHAMPUS)
•
•
Covered by a spouse's employer-sponsored health plan that pays at least 5 0 % of the health plan premium
Did you answer "Yes" to any part of question 2?
•
N o . G o to question 3.
•
Yes. Stop; you are not eligible to register for the advance tax credit at this time.
3. Can you be claimed as a dependent on someone else's 2003 federal tax return?
•
N o . G o to question 4.
D
Yes. Stop; you are not eligible to register for the advance tax credit at this time.
4. Are you imprisoned under federal, state or local authority?
•
No. G o to question 5.
•
Yes. Stop; you are not eligible to register for the advance tax credit at this time.
5. Are you covered by a qualified health plan?
•
N o . Stop; you are not eligible to register for the advance tax credit at this time.
•
Yes. G o to question 6.
6. Is your qualified health plan sponsored by your husband's or wife's employer?
•
N o . G o to question 7.
•
Yes. Stop; you are not eligible to register for the advance tax credit at this time. However, if the employer
pays for less than 5 0 % of the health plan premium, you m a y be able to claim the H C T C w h e n you file
your federal tax return.
Health Coverage Page 3 0n o
Federal • Stale • Private .ndustry
Tax Credit
7. Check the box next to the qualified health plan you have.
•
C O B R A continuation coverage (where the employer/former employer pays less than 5 0 % of the premium cost)
•
H C T C state-qualified health plan
•
Individual coverage that you were enrolled in at least 30 days prior to separation from the job that m a d e you
TRA eligible, ATAA eligible, and/or P B G C eligible.
Claiming the Credit for Qualified Family Members
See Step 1 in the H C T C Program Kit for the definition of a qualified family m e m b e r before answering question 8.
8. Do you have any qualified family members for whom you wish to claim the advance tax credit?
•
No. Skip questions 9 and 10 and go to Part III on page 5.
•
Yes. G o to question 9.
9. Are any of the family m e m b e r s for w h o m you wish to claim the advance tax credit:
N o Yes (Check all that apply.)
•
D
Enrolled in a health plan maintained by an employer or former employer that pays at least 5 0 %
of the cost of the coverage
•
•
Entitled to Medicare Part A or enrolled in Medicare Part B
•
•
Enrolled in Medicaid or the State Children's Health Insurance Program (SCHIP)
•
•
Enrolled in the Federal Employees Health Benefits Program (FEHBP)
D
•
Entitled to health coverage through the U.S. military health system (Tricare/CHAMPUS)
Did you answer "Yes" to any part of question 9?
•
No. G o to question 10.
•
Yes. You must verify that each family m e m b e r meets the definition of a qualified family m e m b e r if you wish to
claim the advance tax credit for that family member. Re-read the definition in Step 1 of the Program Kit to
determine the family member's eligibility.
10. Are all of your qualified family m e m b e r s covered under your health plan?
•
N o . During the pilot, you will not be able to claim the advance credit for family m e m b e r s that are on separate plans or are invoiced separately. You m a y be able to claim the H C T C for these months w h e n you file
your federal tax return. Fill out the information about these qualified family m e m b e r s in Part V.
Beginning on August 1, 2003, the H C T C m a y be able to start processing advance payments for these
family members.
D
Yes. See the instructions b e l o w to complete this form.
Instructions: First, complete Part III of this form to provide information about your qualified health plan.
Next, fill out Part IV of this form for any qualified family members on your plan.
Finally, if you have any qualified family m e m b e r s w h o have their o w n individual policy, fill out Part V of this form.
Fediral • Stsia • Private Industry
Health Coverage
Tax Credit
Page 4 of 10
SSN/TIN:
Part III: Complete This Part to Provide Information about Your Qualified Health Plan
1. You must include a record of your qualified health plan premium amount when you submit this form.
C O B R A - Include a copy of your C O B R A election letter and a copy of your current month's health plan invoice.
H C T C state-qualified or qualified individual coverage - Include a copy of your current month's health plan invoice.
2. Your health plan invoice must list premium amounts for non-qualified family members separately from the premium
amounts for you and your qualified family members.
If it does not, then you will need to include a letter from your health plan administrator defining the premium
amount for only you and your qualified family members.
3. Your health plan invoice must list any exceptions (for example, vision and dental coverage) you pay for yourself and
your qualified family m e m b e r s separately from the major medical expenses/premiums.
If it does not, then you will need to include a letter from your health plan administrator that provides the amount for
only the major medical expenses/premiums.
4. If you have any qualified family members covered under your plan, fill out Part IV. Fill out Part V for all qualified
family m e m b e r s that have their o w n qualified health plan.
Your Qualified Health Plan Information
3. Policy ID
2. Group ID
1. M e m b e r ID
4. Policy Holder's N a m e (Last, First, Suffix)
5. Policy Holder's SSN or TIN
If your qualified health plan is COBRA, you must also provide the following information:
COBRA Health Plan Administrator
1. Former Employer/Health Plan Administrator
Foderal • State • Private Industry
Health Coverage
Tax Credit
2. Former Employer/Health Plan Administrator Telephone N u m b e r
Page 5 of 10
Estimating t h e H C T C Eligible P r e m i u m A m o u n t for Y o u a n d All Qualified Family M e m b e r s o n Y o u r
Health Plan
1. Use this worksheet to estimate your HCTC-eligible monthly premium amount. You will need your most recent
health plan invoice.
Your eligible premium amount does not include non-qualified family members.
Your eligible premium amount does not include exceptions (for example, vision and dental coverage).
The H C T C will pay for 6 5 % of your actual eligible premium amount.
2. Refer to Step 4 in the Program Kit to estimate your payment responsibility.
1. Enter the total health plan premium that you pay per month for yourself and any
qualified family members
$
2. Enter the total of any premiums you pay per month for exceptions
(for example, vision and dental coverage)
$
3. Subtract line 2 from line 1. This is your monthly estimated eligible premium amount $
THIRD PARTY DESIGNEE
A third party designee is someone you would like to authorize to access and update your H C T C account.
If you want to allow a friend, family member, or any other person you choose to discuss your HCTC account with HCTC Program, check the "Yes" box in the 'Third
Party Designee" area below. You will need to enter the designee's name, phone number, and any five numbers the designee chooses as his or her personal identification
number (PIN). The PIN will be used to identify the designee if they contact the H C T C Program.
Do you want to allow another person to discuss your H C T C account with the H C T C program?
• No.
I I Yes. Complete the following:
Designee's Full N a m e (type or print legibly)
Telephone Number
Personal Identification NutTiber (PIN)
Under penalties of perjury, I declare that the information furnished on this form with regard to myself and to any qualified family member(s), and any attachments to it,
are true, correct, and complete. I understand that a knowing and willfully false statement on this form can result in m y disqualification from participating in the H C T C
advance tax credit program.
Full N a m e (type or print legibly)
Signature (sign in black ink)
•
PMerj • Stele • FWat< ndusu-y
Health Coverage
Tax Credit
Page 6 of 1 0
SSN/TIN:
Date Signed
Part IV: Qualified Family Members on Your Health Plan
1. If you and your qualified family members share the same health plan, list each qualified family member for whom you
are seeking to claim the advance credit on the form below.
2. Photocopy this form if you need additional space.
Note: Do not include qualified family members that have their own qualified health plan. Instead, fill out the
information in Part V for these individuals.
INFORMATION FOR QUALIFIED FAMILY MEMBER #1
1. Last N a m e
6. M e m b e r ID
5. SSNorTIN
2. First N a m e
3. Middle N a m e
7. Date of Birth (mm/dd/yyyy)
8. Relationship
4. Suffix Qr., II)
• Spouse • Child D Other
INFORMATION FOR QUALIFIED FAMILY MEMBER #2
1. Last N a m e
6. M e m b e r ID
5. SSNorTIN
2. First N a m e
3. Middle N a m e
7. Date of Birth (mm/dd/yyyy)
8. Relationship
4. Suffix Or., II)
• Spouse • Child • Other
INFORMATION FOR QUALIFIED FAMILY MEMBER #3
1. Last N a m e
6. M e m b e r ID
5. SSNorTIN
2. First N a m e
3. Middle N a m e
7. Date of Birth (mm/dd/yyyy)
8. Relationship
•
Spouse
4. Suffix Or., II)
• Child
• Other
INFORMATION FOR QUALIFIED FAMILY MEMBER #4
1. Last N a m e
6. M e m b e r ID
5. SSNorTIN
2. First N a m e
3. Middle N a m e
7. Date of Birth (mm/dd/yyyy)
8. Relationship
4. Suffix Or., II)
• Spouse • Child • Other
Faderal • State • r- n>- industry
Health Coverage
Tax Credit
Page 7 of 10
Part V: Qualified Family Members Listed on a Policy Separate from Your Policy
1. Only fill out this section for qualified family members who have a policy separate from your policy.
2. Photocopy and fill out this form for each additional qualified family member for whom you wish to claim the credit.
3. You must include a copy of the current month's health plan invoice for each qualified family member when you
submit this form.
INFORMATION FOR QUALIFIED FAMILY M E M B E R #1
1. Last N a m e
2. First N a m e
3. Middle N a m e
5. SSNorTIN
7. Date of Birth (mm/dd/yyyy)
8. Relationship
4. Suffix Or., II)
• Spouse • Child • Other
11. Policy ID
10. Group ID
9. M e m b e r ID
12. Policy Holder's N a m e (Last, First, Suffix)
13. Policy Holder's SSN or TIN
Estimating the HCTC-Eligible P r e m i u m A m o u n t for a Qualified Family M e m b e r N o t o n Your Health Plan
1. Use this worksheet to estimate the HCTC-eligible monthly premium amount for the qualified family member. You
will need his or her most recent health plan invoice.
The family member's eligible premium amount does not include non-qualified family members.
The family member's eligible premium amount does not include exceptions (for example, vision and dental coverage).
The HCTC will pay for 65% of the actual eligible premium amount.
1. Enter the total health plan premium that your qualified family member pays per month $ •
2. Enter the total of any premiums paid per month for exceptions for this individual
(for example, vision and dental coverage)
$
3. Subtract line 2 from line 1. This is the monthly estimated eligible premium
amount for this individual $ :
Health Coverage
Tax Credit
Page 8 of 10
SSN/TIN:
:
Did You Remember To:
•
Provide all the information for Part I?
•
Answer all of the eligibility questions in Part II?
•
Provide all of the information on your qualified health plan in Part III?
•
Use the Estimating the HCTC-Eligible Premium A m o u n t worksheet o n p a g e 6 to calculate the approximate
HCTC-eligible premium amount for you and any qualified family members w h o are on your policy?
•
Fill out Part IV for any qualified family members w h o are on your policy?
•
Fill out Part V if you are claiming any qualified family members and they have their o w n policy?
•
Use the Estimating the HCTC-Eligible Premium A m o u n t worksheet o n p a g e 8 to calculate the approximate
HCTC-eligible premium amount for any qualified family members w h o have their o w n policy?
•
Sign and date the H C T C Registration Form o n p a g e 6?
D
Include the necessary health plan verification documents for you and any qualified family members in the envelope?
•
Keep a copy of your completed H C T C Registration Form and any required documents for your personal records?
•
Put your SSN or TIN on the bottom of each page of this Registration Form where indicated?
Mailing Address:
Mail your complete H C T C Registration Form and all required documents in the enclosed postage paid envelope.
Or, mail it to:
H C T C Processing Center
15115 Park R o w
Suite #200
Houston, TX 77084
Foderal • Stale • Private Industry
Health Coverage
Tax Credit
Page 9 of 10
Attach a copy of the current month's health plan invoice(s)
for you and any qualified family members to this page.
OR
If you have COBRA, attach a copy of your COBRA
election letter and a copy of your current months
health plan invoice.
You must pay your health plan invoice in full
for each period you are not invoiced by HCTC.
Page 10 of
10
Department of the Treasury
Internal Revenue Service
www.irs.gov
Form 13441 (5-2003)
Catalog Number 36369W
HLSS R O O M
F R O M T H E OFFICE O F PUBLIC AFFAIRS
May 30, 2003
JS-444
U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets
totaled $82,908 million as of the end of that week, compared to $82,182 million as of the end of the prior week.
I. Official U.S. Reserve Assets (in US millions)
M a v 16, 2003
M a v 23, 2003
82,182
82,908
TOTAL
1. Foreign Currency Reserves l
Euro
Yen
TOTAL
Euro
Yen
TOTAL
a. Securities
7,638
13,553
21,197
7,815
13,461
21,277
0
Of which, issuer headquartered in the U.S.
0
b. Total deposits with:
b.i. Other central banks and BIS
12,448
2,722
15,170
12,717
2,703
15,420
b.ii. Banks headquartered in the U.S.
0
0
b.ii. Of which, banks located abroad
0
0
b.iii. Banks headquartered outside the U.S.
0
0
b.iii. Of which, banks located in the U.S.
0
0
2. IMF Reserve Position
23,126
23,390
3. Special Drawing Rights (SDRs) 2
11,646
11,778
4. Gold Stock3
11,043
11,043
0
0
5. Other Reserve Assets
II. Predetermined Short-Term Drains on Foreign Currency Assets
M a y 16, 2003
Euro
1. Foreign currency loans and securities
Yen
M a y 23, 2003
TOTAL
Euro
0
2. Aggregate short and long positions in forwards and futures in foreign currencies vis-a-vis the U.S. dollar:
Yen
TOTAL
0
2. a. Short positions
0
0
2.b. Long positions
0
0
3. Other
0
0
III. Contingent Short-Term Net Drains on Foreign Currency Assets
May 16, 2003
Euro
1. Contingent liabilities in foreign currency
Yen
May 23, 2003
TOTAL
0
Euro
Yen
TOTAL
0
l.a. Collateral guarantees on debt due within 1
year
l.b. Other contingent liabilities
2. Foreign currency securities with embedded
options
0
0
3. Undrawn, unconditional credit lines
0
0
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 US.
4. Aggregate short and long positions of
options in foreign
Currencies vis-a-vis the U.S. dollar
0
0
4. a. Short positions
4.a.l. Bought puts
4.a.2. Written calls
4.b. Long positions
4.b.l. Bought calls
4.b.2. Written puts
Notes:
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. Foreign Currency Reserves for the latest week may be subject to revision. Foreign Currency
Reserves for the prior week are final.
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 SDR/dollar exchange rate for the reporting date. The entries for the latest week reflect any
necessary adjustments, including revaluation, by the U.S. Treasury to the prior week's IMF data. IMF data for the latest week m a y be
subject to revision. IMF data for the prior week are final.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
OJM o n i o n
JT
otic 828S
06/29/05 -»;'' m
5
@FedFRASER