The U.S. Treasury on Wednesday announced the first in a possible series of emergency steps to push back the day when the government will exceed its legal borrowing authority as imposed by the U.S. Congress.
The Treasury said on Dec. 28 it would suspend issuance of State and Local Government Series securities, known as “slugs”, which are special low-interest Treasury securities offered to state and local governments to temporarily invest proceeds from municipal bond sales.
Slugs, which count against the debt limit, have been suspended several times over the last 20 years to avoid hitting the debt ceiling.
The Treasury said it will also begin other measures, such as suspending certain retirement investments, which together will raise $200 billion
Read more: U.S. to Hit Debt Limit Monday
Treasury Secretary Timothy F. Geithner said in a letter to senior lawmakers that the Treasury would begin to undertake “extraordinary measures” in order to forestall default. Geithner said the measures could create about $200 billion in additional funding available to the government – giving Congress two months before it must raise the debt limit.