Fannie Mae (FNMA)

[Patswil]

Options limited for the government to stave off debt limit deadline


Treasury out of options coming up with money to hold off the debt limit, (would the sale of the stock they own of fannie mae, be their next option to hold it off, As fannie mae payment of 59 billion holds it off until after labor day, They may be forced to make this decision soon.

Other Measures Used in the Past Are No Longer Available or of Limited Use The other measures that have been used in past debt limit impasses in order to postpone
the date by which the debt limit needed to be increased are either not available or of limited use.
First, although in the past Treasury Secretaries have suspended the issuance of U.S. savings bonds to the public, doing so now would be of little benefit. Suspending the issuance of
U.S. savings bonds would not free up any headroom under the debt limit.
As is the case with 7
Treasury is required to restore lost interest on the next business day. 5 suspending sales of SLGS, suspending the sales of savings bonds would only eliminate increases in debt that would count against the debt limit if the securities were issued. Moreover,
suspending such sales conserves very little headroom.8
Second, measures relating to the Federal Financing Bank (FFB) are of limited use.9
Third, a measure previously used, involving the
calling in of cash that Treasury kept on deposit at banks, is no longer available: Treasury no longer keeps these balances.10 Finally, Congress has in the past provided one-time tools in the
midst of a debt limit impasse;11 those authorities expired over 17 years ago.
An additional source of uncertainty has been the
amount and timing of certain payments to the Treasury by Fannie Mae and Fred Mac in light of their improving financial conditions. In the case of Fannie Mae, we learned last week that Treasury will receive a payment of approximately $60 billion on June 28, 2013.
Given the uncertainty described above, at this time, Treasury is not able to provide a specific estimate of how long the extraordinary measures will last. However, in view of the forthcoming Fannie Mae payment and the trend in other payment flows, it is now clear that the measures will not be exhausted until after Labor Dayhttp://www.treasury.gov/initiatives/Documents/Debt%20Limit%205-17-13%20Boehner.pdf