US Treasury Could Liquidate Assets Rather Raise the Debt Ceiling

When Congress returns from recess, more than likely compromising John Boehner will make a deal with the Democrats that raise the debt ceiling. Boehner and the Republicans will be promised future spending cut considerations, but of course, the American people should know by now we can't count on those. As quick as spending cuts are realized, something else in government seems to gobble up any savings.

Republicans don't have to raise the debt ceiling according to the National Review. They source to a list of assets the United States government could liquefy to avoid another debt ceiling increase that will ensure more debt. Liquefying these assets will also help the United States avoid default, but more importantly it will keep the federal government from spending another dime and force them to start living within their means--that is as long as they don't frivolously spend the liquefied assets.

The following assets are identified by Veronique de Rugy and Jason Fichtner:

Liquidating Existing Assets ($2.395 Trillion)
The Department of the Treasury has financial measures at its disposal to fund government operations temporarily without having to issue new debt. These include:

1) Non-restricted cash on hand: $113.495 billion (The total operating balance of the United States Treasury as of April 19, 2011).

2) Suspension of the daily reinvestment of Treasury securities held by the Exchange Stabilization Fund: $23 billion.

3) Restricted cash and other monetary assets (gold, international monetary assets, foreign currency): $315.1 billion.

4) TARP assets: $179.2 billion in gross outstanding direct loans; $142.5 billion in equity investments (As of September 30, 2010).

5) The Federal Reserve: Unknown, but estimated by Secretary Geithner to be insignificant.
(Special programs at the Treasury may borrow money on the behalf of the Federal Reserve, and this borrowing would not count toward the debt ceiling.)

6) Determination of a “debt issuance suspension period.” (This determination would permit the
redemption of existing, and the suspension of new, investments of the Civil Service Retirement and Disability Fund (CSRDF).): $766.615 billion (intergovernmental holdings in the Civil Service
Retirement and Disability Fund).

7) Redemption of existing investments in other trust funds

 DOD, Military Retirement Fund: $332.9 billion

 DOD, Medicare-Eligible Retiree Health Care Fund: $159.9 billion

 Department of Energy, Nuclear Waste Disposal: $48.0 billion

 FDIC Funds: $38.3 billion

 OPM, Postal Service Retiree Health Benefits Fund: $42.9 billion

 OPM, Employees Life Insurance Fund: $38.6 billion

 DOT, Highway Trust Fund: $23.8 billion

 Pension Benefit Guaranty Corporation Fund: $14.9 billion

 DOL, Unemployment Trust Fund: $12.1 billion

 OPM, Employees Health: $17.3 billion

 Department of State, Foreign Service Retirement and Disability Fund: $16.1 billion

 HUD, Federal Housing Authority Liquidating Account: $7.3 billion

 All other programs and funds: $102.7 billion

8) Suspend investments of any federal government account surpluses in Treasury securities as required by law: $0 (but conserves headroom by not adding to the debt further).

9) Suspend the issuance of State and Local Government Series Treasury securities: $0 (but conserves headroom by not adding to the debt further).