01lU/96 11: Z4 .• v .•.."

"'j' -

DEPARTMENT OF THE TREASURY

"YI'o~"~~:P'1I,D'~9§~20.

IIIBMORARDUKFOR SECllBTARY m:JJ3Dl

ftOK: Darcy B~•• 0 Roger AncIers~

SUBJECT: Debt Limit Contingency Plans

SmDIAllY: .'

At"tached is a brief summary of the measures for consideration andan update of a possible eceaazao , Tomorrow Jerry Hawke, EdKnight and we are prepared to meet with you to discuss th~measures in detail. Other staff with particular expertise inspecific measures will join us as appropriate. At this time wehave not prepared fina1, written analyses of the .legal and po1icyissues for each item. SYl~a Mathews suggested we send thissummary to you in anticipa.tion o'f tomorrow's d.iscussion.

AftAcmmN'l'S.'

cc; Jerry HawkeEd KnightSylvia. Mathews

202 622 0534 01-24-96 11:31AM P013 #39

. .~.

R-9,?%

Olll4/98 11: 24 UZ02 622 OUt'.

Measures for CoaslcSeradonI

Not reinvest assets ofG-Fund

Not reinvest other overnight rolloversBlPSAIPPostal Service

Disinvest 0viJ Service Retirement andDisability Fund

-in amount cqualLO X months' benefits-December 31 int~ payment .-in toto

Not inyest°new RlCdpts of trust ti.mds

SeDFFBa.~-to trust funds-to public

RTCAgricultureOther

lDisinvest Exchange Stabilization FundDotJac portionYenportioDMade portionPeso swap equivalent

Amount

S2LS bDlion

SI.4 billion$1.3 billipnIl.S biDioll

S3 btllion per monthS14.S billion$3SObiUion

$3-10biUion & day

$13 billion$27 billion$44.3 billion

SJ billionS10 bilflOllS6.9bilHonS12.2 btllion

202 622 0'534

Variab1e

Variable

Varying qUality

May be attm:tiwto Fed

01-24-96 11:31AM P014 #39

01/2(/98 11:26 U202 822 0334 DTRlEGIS AFFS'.

" '

2

DisinvC3t other trust 4uuts-to pay benefits-for genCl'll purposes

r Major Funds' HoldingsSocial SecurityMedicareMiIiWy RetirementUnemploymentDisabifityHighwayRailroadAirportsSupplementary medicalOther

S448 bUlionsuo billionS113 billionS47biffion$lS billion$18.5 biDionS14.4 billion$14 billionSllbillion$38billion

Sell gold-to truU fuilds-to Fed-to public

s11.1 billion, atmarket

Office of Fedcral FinanceNovember S. 1995

202 622 OS '?4

.'

Awkward anddisruptive

01-24-96 11:3!AM POlS U39

'.

DRAFT-November It 1995-INTERNAL USE ONLY

<ktober 17

.'

November 1

November 2·8

November 3

NovemberG

November 8

November 13

November l4

November 15

IScenariom

(Assumes no temporary)

-Announce cut in 10fl3 biD auction to $6.0 billion

.Suspend sale ottoreign add-olU

-Suspend sale ofSLGS

-Announce '1':larterty retUnding

..caD in compewating balances

-Issue $14,0 billion casb management bills-$&.0 billion maturing 1I2S-16.0 billion maturing 12fl)

-.

-Postpone auctions of3- and 10- year 00lC$

-Postpone auction of S2-weck bills

-statutory notice to Congress of upcoming inabililY to invest~FwldruDy

aNotice to Executive Director of Federal EmployeesRetirement System of upcoming inabilityto relnvest G-Fund

.statutOJy notice to Congress of upcoming inability to investCSRF fully

-Announce $25.0 billion cash llWlagcmcot bUls

-~on $25.0 biDion cash management bills

~ not reinvesting G-Fund fuRy

-Redeem $36,0 biDionsc:curitie$ from CSRF (amount equal to12 months' benefits payments)

-Suspend sale of Savings Bonds

202 622 0534 01-24-96 11: 31AM POl6 iS39

Ol/Z4/~G II:Z0 lllUl 6ZZ 0334..,

DRAFr-Novembtl''' 1"!-INTERNAL USE ONLY

Nowmber29

NovemberlO

December I

December 15

Dccember21

December 28

December 29

Janwuy2

January 3

January 16·

DTK LEGI S APP5 141017

•I .

-Issue SlS.O biUiOD 36-day cash maaasement bills (12121maturity)

-Announce $S.O bilUon cash management bills

-Nonce to Congress of sale ofFFB assets

-Auction SS.O billion cash management biOa

-Sell $12.0 billion FFB assets

-Issue SS.O billion 27-day cash management bills (12/2.8maturity) •.

-New SI2.0 billionFFB loan

-Redeem $31.0 billion cash management bDJs

-Redeem $5.0 billion cash management bills

-Notice to Congr~ of upQOroing noninvestment of CSRFinterest payment

-Announce $8.0 billion casb management biD,

-Do not reinvest SI·tS billion interest paymept to CSRF

-Auction SI.O billion cash management bill

-Announce S5.0 billion cash management bBl

-Issue S8.0 biffion 16.cfay c:ashmanagement bill (1118 maturity)

-Auction S5.0 biUion cash management biD

·Begin not investing trust fund receipts fuUy

-Issue S5.0 billion 22-day cash uumagement bill (IllSmaturity)

-Announce cut in 1122 auction ofS15.0 billion

202 622 0534 01-24-96 11:31AM POI? #39

DRAYr':'Novcmbcr 8, 1995-INTERNAL USE ONLY

Jamwy 18

January 22

lamaty2S"

If,I018

. '-Redeem S8,0 biJfion cash management bills

-Reduce auafon ofweeJdy bills by $15.0 biUioo

-Redeem S13.0 biDion cash management biI1s

•

202 622 OS34 01-24-96 11 :3IAM POl8 ~39

-,~•ID

Scenar10III" 11108195 •01~

C•••"-•••Cash· ~ AdIUS1mems Cash Effect Debt Effect Adj. calb M.debt OL MaD ••"c11n 5.0 4,897.4 5.0 4,897.4 2.8 a

11/8 2.7 4,895.7 caD In comp balances 1.7 4.4 4,895.7 4.3 •••11/9 6.2 4,895.5 6.9 4,895.6 4.6 •....11/10 4.5 4,89504 8.2 4,895.4 4.8 N. CII

11/13 5.4 4,897.9 7.1 4,897.9 2.111/14 6.7 4,899.3 8.4 4,899.3 0.7 II11/15 (20.4) 4,904.6 'cash mgt bill; dslnvst G-Fund; redeem CSRF 25.5 (31.9) 8.8 4,B72.6 .- N

CI11/16 (12.9) 4,907.2 14.3 . 4,B76.3 .- N

ell11/17 (13.0) 4,908.7 14.2 4,8704.8 •••• NN11120 (12.7) 4,907.2 14.6 ",876.3 •••• CI

11/21 (13.3) 4,907.8 13.9 ",876'1 ••• CIICoI••11/22 (15.3) 4,909.3 11.9 4.ern. ••••

11/23 (15.3) 4.909.3 11.9 4.877.4 •••11/24 (10.5) 4,914.1 16.7 4.882.2 1"11/27 (9,7) 4,913.0 17.0 4.881.1 •••11128 (9.0) 4,915.5 18.2 4,883.6 -N '=0 11/29 (8.4) 4,917.7 18.8 4.885.8 ••• ..

N iii

11/30 (3.:2) 4.932.8 2A.O 4,900.9 ••• ,en SN Effect of suspension of SaVings Bonds aN •..0 andSlGs for month (2.1) (2.1) 21.9 4,898.8 •••• Cjt1I

~<.0)

~ ••C/

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IN~I

ID01 .,-w-~...,o-ID

-11108195 forecast ·"Reflects all actIons announced -·Trust funds to be (nvested to rlmft II!c~a

~WID

~""• ~:.<0 .-oJ

Scenat10 IJr. 11/08/95.~

0•••.,•••••Castt A<Uustments Cash Effect <,

~ Debt Effect Adl caab Ac8. debt OLMMlfn GOGI1211 (31.3) 4,918.9 cash mgt bids; FFB asset sale 17.0 S.O 10.8 4,889.9 •••

1214 (32.7) 4.919.4 9.4 4,890.4 ••• ••••..12/5 (35.9) 4,920.5 8.2 4,891.5 •••• ..N1216 (37.5) 4,917.2 4.8 4,888.2 ••• GI

12n (34.5) 4.915.4 no fOreign add-ems (0.3) (0.3) 7.3 4,886.1 ••••12/8 (35.1) 4,917.7 e.7 4,888.4 ••• ca

N".2111 (33.8) 4.918.3 B.O 4,889.0 ••• cN12/12 (33.4) 4.920.5 B.4 4,891.2 . ... ' a

12113 (33.4) 4,921.9 B.4 4,892.6 ••• NN

i2/14 (21.B) 4,926.1 no foreign add-ons (0.5) (0.5) 13.5 4,896.3 •• e CI0112115 (20.4) 4,925.1 new FFB loan (12.0) 8.9 4,895.=L

_.Co!••12/18 5.2 4,924.7 34.5 4,894.9

_ .., 12/19 8.8 4,925.8 36.1 4.896.0 ••••

12120 9.1 4,927.1 38.4 4,891.3 •••12121 12.5 4,930.3 cash mgt bIBsmature; no add-OM (31,3) (31.3) 10.5 4,869.2 ."'.12122 12.5 4,931.9 10.5 4,870.7 •••• tN

toe 12125 12.5 4.931.9 10.5 4.870.7 ••• ,N

m 1me 15.1 4,933.4 13.1 4.872.3 ••• SN~N 12127 18.0 4,936.6 16.0 4,875.5 ••• to(jo 12128 21.1 4,939.5 cash mgt bill maturea~no add-ons (5.3) (5.3) 13.8 4.873.1 ~~

tJIw• 12129 22.6 4,980.8 don't tnvest CSRF interest payment (14.5) 15.3 4.899.9 .** ••

CIEffect of suspension of Savings Bondsand SLGs for month (2,2)' (2.2) 13.1 4,897.7 ••••

e-IN•IoJ)01 .,--..w-~

."eiiiN

oc-11/08195 forecast ··Reflects aUadfons announced "-Trust funda to be Invested to Iimft •••~c..,

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