How Treasury Issues Debt

"The U.S. Department of the Treasury (Treasury), among other roles, manages the country’s debt. The primary objective of Treasury’s debt management strategy is to finance the government’s borrowing needs at the lowest cost over time. To accomplish this Treasury adheres to three principles: (1) to issue debt in a regular and predictable pattern, (2) to provide transparency in the decisionmaking process, and (3) to seek continuous improvements in the auction process.

Within the Treasury, the Office of Debt Management (ODM) makes all decisions related to debt issuance and the management of the United States debt portfolio. When federal spending exceeds revenues, the ODM directs the Bureau of the Fiscal Service to borrow the funds needed to finance government operations by selling securities to the public and government agencies through an auction process. The Bureau of the Fiscal Service manages the operational aspects of the issuance of Treasury securities, including the systems related to and the monitoring of security auctions.

During the mid-1970s, Treasury faced a period of rising nominal federal budget deficits and debt requiring unanticipated increases in issuances of securities. Up to that point, debt management was characterized by an ad-hoc, offering-by-offering survey of market participants. At that time, Treasury implemented a new debt management strategy that provided greater transparency and reduced the potential for market volatility. The resulting debt management process modernized the market for Treasury securities, realizing the benefits of predictability in an environment of large deficits. A reliance on auctions became a central part of the strategy’s increased focus on regular and predictable debt management. Most of the debt sold by the federal government is marketable, meaning that it can be resold on the secondary market. Currently, Treasury offers five types of marketable securities: Treasury bills, notes, bonds, inflation protected securities (TIPS), and floating rate notes (FRNs), sold in about 300 auctions per year. A small portion of debt held by the public and nearly all intragovernmental debt (debt held by government trust funds) is nonmarketable.

Investors examine several key factors when deciding whether they should purchase Treasury securities, including price, expected return, and risk. Treasury securities provide a known stream of income and offer greater liquidity than other types of fixed-income securities. Because they are also backed by the full faith and credit of the United States, they are often seen as one of the safest investments available, though investors are not totally immune from losses. Security prices are determined by investors according to the value of such characteristics in the context of the financial marketplace.."
Treasury Department Debt 

Debt Limit since 2011

"Total federal debt can increase in two ways. First, through debt increases when the government

sells debt to the public to finance budget deficits and acquire the financial resources needed to

meet its obligations. This increases debt held by the public . Second, through debt increases when

the federal government issues debt to certain government accounts, such as the Social Security,

Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases

debt held by government accounts. The sum of debt held by the public and debt held by government accounts is the total federal debt..."

Debt limit

The United States as a Net Debtor Nation: Overview of the International Investment Position

"The international investment position of the United States is an annual measure of the assets

Americans own abroad and the assets foreigners own in the United States. The net position, or the

difference between the two, sometimes is referred to as a measure of U.S. international

indebtedness.."
Debtor nation

Federal Debt and the Statutory Limit, November 2013

"The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations..."
Federal Debt

The Debt Limit: History and Recent Increases

"Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases debt held by the public. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases debt held by government accounts..."
Debt Limit

CBO Federal Debt and the Statutory Limit, September 2013

"The Congress has traditionally placed a limit on the total amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. Law- makers have enacted numerous increases to the debt limit—commonly known as the debt ceiling—some of which have been temporary but many of which have been permanent..."

Federal Debt

Household Debt in the U.S.: 2000 to 2011

"In 2011, 69 percent of U.S. households held some form of debt. This represents a decrease from 2000 when 74 percent of U.S. households held debt.1 At the same time, median household debt has increased over the past decade: from $50,971 [+/- $1,165] in 2000 to $70,000 [+/- $1,199] in 2011 (see Figure 1).."
Household Debt in the United States: 2000-2011

The Structure and Practices of the Debt Buying Industry

"The FTC initiated this debt buyer study in late 2009 for two main purposes. First, the FTC sought to
obtain a better understanding of the debt buying market and the process of buying and selling debt. Second, the Commission wanted to explore the nature and extent of the relationship, if any, between the practice of debt buying and the types of information problems that the FTC has found can occur when debt collectors seek to recover and verify debts..."
http://www.ftc.gov/os/2013/01/debtbuyingreport.pdf
Structure and Practice of the Debt Buying Industry

Foreign Holdings of U.S. Debt

"This report presents current data on estimated ownership of U.S. Treasury securities and major holders of federal debt by country. Federal debt represents the accumulated balance of borrowing by the federal government. To finance federal borrowing, U.S. Treasury securities are sold to investors. Treasury securities may be purchased directly from the Treasury or on the secondary market by individual private investors, financial institutions in the United States or overseas, and foreign, state, or local governments..."
Foreign Holdings of U.S. Debt

The Debt Limit: History and Recent Increases

"Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases debt held by the public. Second, debt increases when the federal
government issues debt to certain government accounts, such as the Social Security, Medicare,
and Transportation trust funds, in exchange for their reported surpluses. This increases debt held
by government accounts. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it..."
The Debt Limit: History and Recent Increases

Choices for Deficit Reduction

"The United States is facing fundamental budgetary challenges. Federal debt held by the public exceeds 70 percent of the nation's annual output (gross national product or GDP) - a percentage not seen since 1950- and a continuation of current policies would boost the debt further. Although debt would decline to 58 percent of GDP in 2022 under the current-law assumptions that underlie the Congressional budget Office's (CBO's) baseline projections, those projections depend heavily on significant increases in taxes and decreased in spending that are scheduled to take effect at the beginning of January. If, instead, lawmakers maintained current policies by preventing most of those changes from occurring - what CBO refers to as the alternative fiscal scenario - debt held by the public would increase to 90 percent of GDP 10 years from now and continue to rise rapidly thereafter..."
Choices for Deficit Reduction

Foreign Holdings of Federal Debt

"This report presents current data on estimated ownership of U.S. Treasury securities and major
holders of federal debt by country. Federal debt represents the accumulated balance of borrowing
by the federal government. To finance federal borrowing, U.S. Treasury securities are sold to
investors. Treasury securities may be purchased directly from the Treasury or on the secondary
market by individual private investors, financial institutions in the United States or overseas, and
foreign, state, or local governments. Foreign investment in federal debt has grown in recent years,
prompting questions on the location of the foreign holders and how much debt they hold..."

Fair Debt Collection Policies Act

"The Consumer Financial Protection Bureau (“CFPB” or “the Bureau”) is pleased to
submit to Congress its first annual report summarizing its activities to administer the Fair Debt Collection Practices Act (“FDCPA” or “the Act”), 15 U.S.C. §§ 1692 et seq., during the past year. These activities represent the Bureau’s inaugural effort to curtail deceptive, unfair, and abusive debt collection practices in the marketplace prohibited by the FDCPA. Illegal collection practices cause substantial harm to consumers, who may pay amounts not owed, unintentionally waive their rights, suffer emotional distress, and experience invasions of privacy. Such practices can even place consumers deeper in debt..."

Resolution: Manage Debt

"Do you want to take control of your debt in 2012? Many people face a financial crisis at some time in their lives because of personal or family illness, the loss of a job, or overspending. It can seem overwhelming, but debt can often be overcome.

There is no such thing as a quick and easy way to get out of debt. Turning to a business that offers help in solving debt problems may seem like a reasonable solution when your bills become unmanageable. But before you do business with any company, check it out with your state Attorney General, local consumer protection agency, and the Better Business Bureau..."

CBO ANALYSIS OF AUGUST 1 BUDGET CONTROL ACT
"The Congressional Budget Office (CBO) has estimated the impact on the deficit of the Budget Control Act of 2011, as posted on the Web site of the House Committee on Rules on August 1, 2011. The legislation would:

Establish caps on discretionary spending through 2021;
Allow for certain amounts of additional spending for "program integrity" initiatives aimed at reducing the amount of improper benefit payments;

Make changes to the Pell Grant and student loan programs;

Require that the House of Representatives and the Senate vote on a joint resolution proposing a balanced budget amendment to the Constitution;

Establish a procedure to increase the debt limit by $400 billion initially and procedures that would allow the limit to be raised further in two additional steps, for a cumulative increase of between $2.1 trillion and $2.4 trillion;

Reinstate and modify certain budget process rules;

Create a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction, with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years; and

Establish automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings..."

FTC Issues Enforcement Policy Statement on New Debt Relief Rule
"Enforcement Deferred for Tax Debt Relief Services, but Most Companies Are Now Prohibited From Collecting Advance Fees

The Federal Trade Commission has issued an enforcement policy statement on a new FTC rule that protects consumers by barring debt relief firms from collecting up-front fees. In its statement, the FTC says that while most companies that sell debt relief services over the telephone are now prohibited from charging fees before settling or reducing a consumer’s credit card or other unsecured debt, it will defer enforcement of the new rule for tax debt relief services.

The ban on advance fees reflects changes that the FTC made to its Telemarketing Sales Rule last July. These change take effect today. During the FTC’s education and outreach efforts earlier this month, some tax debt relief companies expressed uncertainty about whether the Rule applied to them. Specifically, they questioned whether tax debts are “unsecured,” which would make them subject to the Rule. The FTC currently is considering these concerns, and until further notice, will defer enforcing the Rule with respect to “services that represent, directly or by implication, to renegotiate settle, or alter the terms of obligation between a person and a taxing entity (tax debt relief services).”,,,"

FTC Tips for Consumers Weighing How to Settle Their Credit Card Debts
"Consumers with overwhelming credit card debt may be tempted to seek help from companies that promise to erase their debt for pennies on the dollar, but the Federal Trade Commission urges caution.

In a new consumer publication, Settling Your Credit Card Debts, the FTC says that there is no guarantee that debt settlement companies can persuade a credit card company to accept partial payment of a legitimate debt. Even if they can, clients must put aside money for their creditors each month and may have to pay hefty fees up front to the debt settlement company – putting them further in the hole before they get any relief.

The publication lists additional red flags to watch out for from companies that promise to settle credit card debt, and discusses practical no-cost and low-cost options for help, including dealing with creditors directly and contacting a credit counselor.

To learn more about getting out of the red without spending a whole lot of green, go to ftc.gov/bcp/edu/pubs/consumer/credit/cre02.shtm.

The FTC, the nation’s consumer protection agency, has free information to help consumers with their personal finances. Visit www.ftc.gov/MoneyMatters to learn more..."

FTC Issues 2010 Fair Debt Collection Practices Report to Congress
"t a time when many consumers are facing debt problems, the Federal Trade Commission has issued its annual report detailing the steps the agency has taken to protect consumers from unfair, deceptive, and abusive debt collection practices and educate the public on the subject. The 32nd Annual Report to Congress on the Fair Debt Collection Practices Act presents, for 2009, an overview of the types of consumer complaints received by the FTC, descriptions of the agency’s debt-collection law enforcement actions, and a summary of its consumer and industry education efforts and research and policy initiatives. The FDCPA prohibits deceptive, unfair, and abusive practices by third-party debt collectors. The FDCPA requires the FTC to submit annual reports to Congress. The Commission vote to issue the report was 4-0. (FTC File No. P104802; the staff contact is Ron Isaac, Bureau of Consumer Protection, 202-326-3231.)

Copies of the report are available from the FTC’s Web site, http://www.ftc.gov, and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

The debt Limit: History and Recent Increases
"Total debt of the federal government can increase in two ways. First, debt increases when the
government sells debt to the public to finance budget deficits and acquire the financial resources
needed to meet its obligations. This increases debt held by the public. Second, debt increases
when the federal government issues debt to certain government accounts, such as the Social
Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses.
This increases debt held by government accounts. The sum of debt held by the public and debt
held by government accounts is the total federal debt. Surpluses generally reduce debt held by
the public, while deficits raise it.

A statutory limit has restricted total federal debt since 1917 when Congress passed the Second
Liberty Bond Act. Congress has raised the debt limit eight times since 2001. Deficits each year
since 2001 and the persistent increases in debt held by government accounts repeatedly raised
the debt to or near the limit in place at the time. Congress raised the limit in June 2002,
and by December 2002 the U.S. Department of the Treasury asked Congress for another increase, which was passed in May 2003. In June 2004, the Treasury asked for another debt limit increase. After Congress recessed in mid-October 2004 without acting, the Secretary of the Treasury told
Congress that the actions he was taking to avoid exceeding the debt limit would suffice only
through mid-November. Congress approved a debt limit increase in a post-election session, which
the President signed on November 19, 2004..."

FTC: Who is Responsible for a Deceased Relative's Debts?
"If your relative leaves unpaid debts when he or she dies, do you have to pay?

According to the Federal Trade Commission, the nation’s consumer protection agency, surviving relatives usually have no legal obligation to pay the debts of a family member who has died. Generally, that person’s estate is responsible for paying his or her debts. But if there isn’t enough in the estate to cover the debts, they typically go unpaid.

After a relative dies, debt collectors may contact family members and ask them to pay their loved ones’ debts. The rights of surviving relatives are covered by the Fair Debt Collection Practices Act, which the FTC enforces. The FTC has developed a new consumer alert about this issue titled Paying the Debts of a Deceased Relative: Who Is Responsible?