before any "panic" really sets in.
Every "fiscal cliff" gets the identical "wording" (to the media) on behalf of the Executive Branch, regarding where they are.
The last go-around, here is what they indicated would have needed to be done (before this current extension was signed off on) -
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C.
Description of the Extraordinary Measures
May 31, 2023
Secretaries of the Treasury in both Republican and Democratic administrations have
exercised their authority to take certain extraordinary measures in order to prevent the United States
from defaulting on its obligations as Congress deliberated on increasing the debt limit.
The extraordinary measures currently being considered are: (1) redeeming existing, and
suspending new, investments of the Civil Service Retirement and Disability Fund and the Postal
Service Retiree Health Benefits Fund; (2) suspending reinvestment of the Government Securities
Investment Fund; (3) suspending reinvestment of the Exchange Stabilization Fund; (4) suspending
sales of State and Local Government Series Treasury securities; and (5) entering into a debt swap
transaction with the Federal Financing Bank. These measures will continue to be evaluated on an
ongoing basis.
1. Civil Service Retirement and Disability Fund and Postal Service Retiree Health Benefits
Fund
Once the debt limit has been reached, Treasury has authority to take actions regarding
investments under the Civil Service Retirement and Disability Fund (CSRDF) and the Postal
Service Retiree Health Benefits Fund (PSRHBF).
The CSRDF provides defined benefits to retired and disabled Federal employees covered by
the Civil Service Retirement System. The fund is invested in special-issue Treasury securities,
which count against the debt limit.
The PSRHBF provides Postal Service retiree health benefit premium payments. The fund is
invested in special-issue Treasury securities, which count against the debt limit.
a. Declaring a “Debt Issuance Suspension Period”
Congress has given Treasury statutory authority to take certain actions in the event of a debt
limit impasse. Specifically, the statute authorizes the Secretary of the Treasury to determine that
Treasury will be unable to fully invest the CSRDF and the PSRHBF and that a “debt issuance
suspension period” exists. Once the Secretary has done so, Treasury can (1) suspend new
investments and (2) redeem certain existing investments in both the CSRDF and the PSRHBF.
Under the statute that governs the CSRDF and the PSRHBF, the term “debt issuance
suspension period” means a period of time that the Secretary determines that Treasury securities
cannot be issued without exceeding the debt limit. The determination of the length of the period
must be based on the facts as they exist at the time.
Declaring a debt issuance suspension period is a limited measure that relates only to the
CSRDF and PSRHBF; it has no impact on any other investments or any other portion of the debt.
Moreover, it only provides limited additional time. For each month of a declared debt issuance
suspension period, approximately $8 billion in headroom for the CSRDF and $300 million in
headroom for the PSRHBF is freed up through an early redemption of existing investments held by
these funds. Thus, for example, a five-month debt issuance suspension period would free up
approximately $41 billion in headroom at the beginning of the debt issuance suspension period.3
However, because these redemptions would have otherwise occurred over the course of the debt
issuance suspension period, as of the end of the debt issuance suspension period there is no net
increase in headroom created as a result of the early redemption.
After the debt limit impasse has ended, the statute provides that the CSRDF and the PSRHBF
are to be made whole.4 Therefore, employees and retirees would be unaffected by these actions
under the statute.
(snip)
More -
https://home.treasury.gov/system/files/136/Description_Extraordinary_Measures-2023_01_19.pdf
Every couple years it's the same song and dance and set of procedures they go through before the next extension is requested.
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