DEBT LIMIT

Analysis of 2011-2012 

Actions Taken and 

Effect of Delayed 

Increase on 

Borrowing Costs

Report to the Congress

July 2012

GAO-12-701

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-701, a report to the 

Congress

July 2012

DEBT LIMIT

Analysis of 2011-2012 Actions Taken and Effect of 

Delayed Increase on Borrowing Costs 

Why GAO Did This Study

GAO previously examined challenges 

associated with managing cash and 

debt when delays in raising the debt 

limit occurred, focusing on the period 

from 1995 through 2010. In February 

2011, GAO reported that delays in 

raising the debt limit create debt and 

cash challenges for Treasury, and 

these challenges have been 

exacerbated in recent years by a large 

growth in debt. 

Delays in raising the debt limit 

occurred during 2011 and January 

2012. GAO has prepared this report 

because of the nature of, and 

sensitivity toward, actions taken to 

manage federal debt during such 

delays. With regard to actions taken by 

Treasury during 2011 and January 

2012 to manage federal debt when 

delays in raising the debt limit 

occurred, this report provides (1) a

chronology of the significant events, 

(2) an analysis of whether actions 

taken by Treasury were consistent with 

legal authorities provided to manage 

federal debt during such delays, (3) an 

assessment of the extent to which

Treasury restored uninvested principal 

and interest losses to federal 

government accounts in accordance 

with relevant legislation, and (4) an 

analysis of the effect that delays in 

raising the debt limit had on Treasury’s 

borrowing costs and operations. To 

address these objectives, GAO 

reviewed Treasury correspondence 

and other documentation, analyzed 

Treasury and private security yield 

data, and interviewed Treasury 

officials. In commenting on GAO’s draft 

report, Treasury broadly agreed with 

GAO’s conclusions and provided 

technical comments, which GAO 

incorporated as appropriate.

What GAO Found

On August 2, 2011, Congress and the President enacted the Budget Control Act 

of 2011, which established a process that increased the debt limit to its current 

level of $16.4 trillion through incremental increases effective on August 2, 2011; 

after close of business on September 21, 2011; and after close of business on 

January 27, 2012. Delays in raising the debt limit occurred prior to the August 

2011 and January 2012 increases, with the Department of the Treasury 

(Treasury) deviating from its normal debt management operations and taking a 

number of actions, referred to by Treasury as extraordinary actions, to avoid 

exceeding the debt limit. 

The extraordinary actions Treasury took during 2011 and January 2012 to 

manage federal debt when delays in raising the debt limit occurred were 

consistent with relevant legislation and regulations. For 2011, these actions

included suspending investments of the Civil Service Retirement and Disability 

Fund (CSRDF), the Postal Service Retiree Health Benefits Fund (Postal Benefits 

Fund), the Government Securities Investment Fund of the Federal Employees’ 

Retirement System (G-Fund), and the Exchange Stabilization Fund (ESF), and 

redeeming certain investments held by the CSRDF earlier than normal. For 

January 2012, Treasury suspended investments to the G-Fund and ESF. 

In accordance with relevant legislation, Treasury restored the uninvested 

principal and interest losses for 2011 and January 2012 to the CSRDF, Postal

Benefits Fund, and G-Fund. Treasury also invested the uninvested principal for 

2011 and January 2012 to the ESF. However, Treasury did not restore interest 

losses to the ESF because it lacks legislative authority to do so. 

Delays in raising the debt limit can create uncertainty in the Treasury market and 

lead to higher Treasury borrowing costs. GAO estimated that delays in raising 

the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about 

$1.3 billion in fiscal year 2011. However, this does not account for the multiyear 

effects on increased costs for Treasury securities that will remain outstanding 

after fiscal year 2011. Further, according to Treasury officials, the increased 

focus on debt limit-related operations as such delays occurred required more 

time and Treasury resources and diverted Treasury’s staff away from other 

important cash and debt management responsibilities. 

The debt limit does not restrict Congress’s ability to enact spending and revenue 

legislation that affects the level of debt or otherwise constrains fiscal policy; it 

restricts Treasury’s authority to borrow to finance the decisions already enacted 

by Congress and the President. Congress also usually votes on increasing the 

debt limit after fiscal policy decisions affecting federal borrowing have begun to 

take effect. This approach to raising the debt limit does not facilitate debate over 

specific tax or spending proposals and their effect on debt. In February 2011, 

GAO reported, and continues to believe, that Congress should consider ways to 

better link decisions about the debt limit with decisions about spending and 

revenue to avoid potential disruptions to the Treasury market and to help inform 

the fiscal policy debate in a timely way. 

View GAO-12-701. For more information, 

contact Gary T. Engel at (202) 512-3406 or 

engelg@gao.gov or Susan J. Irving at (202) 

512-6806 or irvings@gao.gov. 
Page i GAO-12-701 Debt Limit

Letter 1 

Background 4

Chronology of Events 9

Extraordinary Actions to Manage Debt Were Consistent with 

Legislation and Regulations 10

Treasury Restored Uninvested Principal and Interest Losses as 

Authorized 18

Delays in Raising the Debt Limit Increased Treasury’s Borrowing 

Costs and Affected Its Operations 20

Concluding Observations 25

Agency Comments 25

Appendix I Objectives, Scope, and Methodology 27

Appendix II Detailed Methodology Used to Analyze Effect on Treasury’s 

Borrowing Costs 31

Appendix III GAO Contacts and Staff Acknowledgments 34

Tables

Table 1: Extraordinary Actions Available to Treasury to Manage 

Debt When Delays in Raising the Debt Limit Occur 8

Table 2: Chronology of Events Related to the Debt Limit, January 

2011 through January 2012 9

Table 3: Reported Balances as of April 30, 2011, and December 31, 

2011, of Treasury Securities Held by Selected Major 

Federal Government Accounts with Investment Authority 17

Table 4: Restored Principal and Interest Related to Extraordinary 

Actions Taken to Manage Debt during 2011 and January 

2012 18

Figures

Figure 1: Debt Subject to the Limit, September 30, 1996, through 

September 30, 2011, and May 31, 2012 5

Contents
Page ii GAO-12-701 Debt Limit

Figure 2: Estimated Increase or Decrease in Spreads between 

Private and Treasury Security Yields for the 2011 Debt 

Limit Event Period (January 6, 2011, through August 1, 

2011) 22

 

Abbreviations

BCA Budget Control Act of 2011

BPD Bureau of the Public Debt

CM bills cash management bills

CSRDF Civil Service Retirement and Disability Fund

DISP debt issuance suspension period 

ESF Exchange Stabilization Fund

FFB Federal Financing Bank

FRED Federal Reserve Economic Data

OFP Office of Fiscal Projections

SLGS State and Local Government Series

TIPS Treasury Inflation-Protected Securities

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Page 1 GAO-12-701 Debt Limit

United States Government Accountability Office

Washington, DC 20548

July 23, 2012 Letter

Report to the Congress

Congress and the President have enacted laws to establish a limit on the 

amount of federal debt that can be outstanding at one time, referred to as 

the debt limit.1 The debt limit does not restrict Congress’s ability to enact 

spending and revenue legislation that affects the level of debt or 

otherwise constrains fiscal policy; it restricts the Department of the 

Treasury’s (Treasury) authority to borrow to finance the decisions already 

enacted by Congress and the President. Congress also usually votes on 

increasing the debt limit after fiscal policy decisions affecting federal 

borrowing have begun to take effect. This approach to raising the debt 

limit does not facilitate debate over specific tax or spending proposals and 

their effect on debt. In addition, when delays in raising the debt limit 

occur, Treasury often must deviate from its normal cash and debt 

management operations and take a number of extraordinary actions to 

meet the government’s obligations as they come due without exceeding 

the debt limit.2

We have previously examined challenges associated with managing cash 

and debt when delays in raising the debt limit occurred, focusing on the 

period from 1995 through 2010. We reported in February 2011 that 

delays in raising the debt limit create debt and cash management 

challenges for Treasury, and these challenges have been exacerbated in 

recent years by a large growth in debt.3

 

1

The debt limit is codified at 31 U.S.C. §§ 3101 and 3101A.

The amount of borrowing 

capacity provided by taking the extraordinary actions available to 

Treasury has grown in size but has not kept pace with the growth in 

Treasury’s borrowing needs. This means that once debt approaches the 

debt limit, Treasury may not be able to manage the amount of debt 

subject to the limit for as long a period of time as it had in the past before 

the debt limit must be increased. Further, failure to raise the debt limit in a 

timely manner could have serious negative consequences for the 

2

Actions that are not part of Treasury’s normal cash and debt management operations are 

considered “extraordinary actions” by Treasury. 

3

GAO, Debt Limit: Delays Create Debt Management Challenges and Increase Uncertainty 

in the Treasury Market, GAO-11-203 (Washington, D.C.: Feb. 22, 2011). 

 
 

Page 2 GAO-12-701 Debt Limit

Treasury market and increase borrowing costs. Managing debt when 

delays in raising the debt limit occur also diverts Treasury’s resources 

away from other cash and debt management issues. In February 2011, 

we reported that Congress should consider ways to better link decisions 

about the debt limit with decisions about spending and revenue to avoid 

potential disruptions to the Treasury market and to help inform the fiscal 

policy debate in a timely way. 

On January 6, 2011, the Secretary of the Treasury notified Congress that 

the debt limit would likely be reached between March 31, 2011, and 

May 16, 2011.

4 On August 2, 2011, Congress and the President enacted 

the Budget Control Act of 2011 (BCA),5 which established a process that 

resulted in debt limit increases effective on August 2, 2011; after close of 

business on September 21, 2011; and after close of business on 

January 27, 2012.6

Because of the nature of, and sensitivity toward, actions taken to manage 

federal debt when delays in raising the debt limit occur, we prepared this 

report under the Comptroller General’s authority to conduct evaluations 

on GAO’s initiative to assist Congress with its oversight responsibilities. 

This report provides the results of our review of Treasury’s actions during 

2011 and January 2012 to manage federal debt when delays in raising 

the debt limit occurred. Specifically, the objectives of this report are to 

(1) provide a chronology of the significant events, (2) analyze whether 

actions taken by Treasury were consistent with legal authorities provided 

Delays in raising the debt limit occurred prior to the 

August 2011 and January 2012 increases, with Treasury deviating from 

its normal debt management operations and taking a number of 

extraordinary actions to avoid exceeding the debt limit. 

 

4

Treasury began using extraordinary actions on May 6, 2011. 

5

Pub. L. No. 112-25, § 301, 125 Stat. 240, 251 (Aug. 2, 2011), codified at 31 U.S.C. §§ 

3101 and 3101A.

6

Section 301 of the BCA provided for increases in the debt limit if the President certified 

that the debt subject to the limit was within $100 billion of the limit and that further 

borrowing was required to meet existing commitments subject to a joint congressional 

resolution of disapproval within the designated statutory time frames (see 31 U.S.C. §§

3101A(a), (b)). The President provided his certifications to Congress, and the debt limit 

was increased upon the expiration of the statutory time frames for Congress’s disapproval, 

after close of business on September 21, 2011, and January 27, 2012. However, 

additional borrowing pursuant to the increased debt limits did not occur until the next 

business days, which were September 22, 2011, and January 30, 2012, respectively.
 

Page 3 GAO-12-701 Debt Limit

to manage federal debt during such delays, (3) assess the extent to which

Treasury restored uninvested principal and interest losses to federal 

government accounts in accordance with relevant legislation, and 

(4) analyze the effect that delays in raising the debt limit had on 

Treasury’s borrowing costs and operations. 

To answer the first three objectives, we reviewed Treasury 

correspondence, announcements, and documentation of the actions 

taken during 2011 and January 2012 to manage federal debt when delays 

in raising the debt limit occurred. We compared Treasury’s actions to

relevant legislation and regulations authorizing the specific extraordinary 

actions. We also reviewed documentation supporting uninvested 

principal, calculations of forgone interest, and the restoration of principal 

and interest losses. To evaluate whether Treasury followed normal 

investment and redemption policies and procedures for federal 

government accounts not affected by the extraordinary actions (e.g., 

Treasury’s actions did not involve accounts that it is not authorized to use 

in such situations), we performed audit procedures over the investment 

and redemption activity of selected major accounts.

To determine what effect delays in raising the debt limit in 2011 had on 

Treasury’s borrowing costs, we performed a multivariate regression 

analysis of the daily yield spread—yields on private securities minus 

yields on Treasury securities of comparable maturities—during the debt 

limit event period.7 We used yield spreads during the 3-month pre-event 

period as a benchmark against which yield spreads during the event 

period were compared. We also examined changes in the yield spread 

during the January 2012 debt limit event period. See appendix II for more 

details on how we estimated increased borrowing costs, including 

limitations to our using a multivariate regression to measure changes in 

Treasury’s borrowing costs attributable to delays in raising the debt limit.8

 

7

For the purposes of our analysis, a debt limit event period begins when Treasury first 

warns of the need to raise the debt limit and ends when legislation to raise the limit takes 

effect. For 2011, the debt limit event period was from January 6, 2011, through August 1, 

2011.

We obtained Treasury auction data for this analysis from Treasury and 

private security yields and other data from the Federal Reserve Bank of 

St. Louis’s Federal Reserve Economic Data (FRED) source. We also 

8

App. II also discusses differences with previous analyses, which focused on short-term 

Treasury securities. 
 

Page 4 GAO-12-701 Debt Limit

used data on Standard & Poor’s 500 total return index from IHS Global 

Insight in our analysis. To assess the reliability of these data, we looked 

for outliers and anomalies. These databases are commonly used by 

Treasury and researchers to examine the Treasury market and related 

transactions. On the basis of our assessment, we believe the data are 

sufficiently reliable for the purpose of this review. We also reviewed 

documents provided by Treasury, interviewed Treasury officials, and

obtained estimates from Treasury of the number of personnel and amount 

of time involved in Treasury’s efforts to manage federal debt during such 

delays. We reviewed these estimates for reasonableness.

We conducted this performance audit from May 2011 to July 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. See appendixes I and II for 

more details on our objectives, scope, and methodology.

Congress and the President first enacted a statutory limit on federal debt 

during World War I to eliminate the need for Congress to approve each 

new debt issuance and provide Treasury with greater discretion over how 

it finances the government’s day-to-day borrowing needs. With the Public 

Debt Act of 1941,9 Congress and the President set an overall limit of 

$65 billion on Treasury debt obligations that could be outstanding at any 

one time and since then have enacted a number of debt limit increases. 

Most recently, Congress and the President enacted the BCA, which 

established a process that resulted in debt limit increases in three 

increments—$400 billion in August 2011, $500 billion in September 2011, 

and $1,200 billion in January 2012—for a total increase of $2.1 trillion, 

raising the debt limit to $16.394 trillion. As shown in figure 1, the amount 

of reported outstanding debt subject to the limit has increased from 

$5,137 billion on September 30, 1996, to $15,730 billion on May 31, 

2012.

 

9

Pub. L. No. 77-7, 55 Stat. 7 (Feb. 19, 1941).

Background 
 

Page 5 GAO-12-701 Debt Limit

Figure 1: Debt Subject to the Limit, September 30, 1996, through September 30, 2011, and May 31, 2012

Debt subject to the limit includes both debt held by the public and 

intragovernmental debt holdings. Debt held by the public consists 

primarily of marketable Treasury securities, such as bonds, notes, bills, 

cash management bills (CM bills), and Treasury Inflation-Protected 

Securities (TIPS), which are sold through auctions and can be resold by 

whoever owns them.

10

 

10CM bills are flexible securities that Treasury issues outside of its regular preannounced 

auction schedule. Treasury sets the amount and time to maturity to meet its immediate 

borrowing needs at the time. TIPS are inflation-indexed securities that unlike nominal 

securities offer inflation protection to investors who are willing to pay a premium for this 

protection in the form of lower interest rates.

Treasury also issues a smaller amount of 

nonmarketable securities, such as savings securities and special 

securities for state and local governments. Debt held by the public 

primarily represents the amount the federal government has borrowed to 
 

Page 6 GAO-12-701 Debt Limit

finance cumulative cash deficits. Intragovernmental debt holdings 

represent balances of Treasury securities held in federal government 

accounts, such as the Social Security and Medicare trust funds. 

Intragovernmental debt increases when these accounts run a surplus or 

accrue interest on existing securities.11

The Secretary of the Treasury has several responsibilities related to the 

federal government’s financial management operations. These include 

paying the government’s obligations and investing the excess annual 

receipts (including interest earnings) over disbursements of federal 

government accounts with investment authority. To meet these 

responsibilities, the Secretary of the Treasury is authorized by law to 

issue the necessary securities to federal government accounts with 

investment authority for investment purposes and to borrow the 

necessary funds from the public to pay government obligations.12

 

11A very small amount of total federal debt is not subject to the debt limit. This amount is 

primarily composed of unamortized discounts on Treasury bills and Zero Coupon Treasury 

bonds; debt securities issued by agencies other than Treasury, such as the Tennessee 

Valley Authority; and debt securities issued by the Federal Financing Bank. As of 

September 30, 2011, 99.5 percent of federal debt was subject to the debt limit.

Under 

normal conditions, Treasury is notified by the appropriate agency (such 

as the Office of Personnel Management for the Civil Service Retirement 

and Disability Fund (CSRDF)) of the amount that should be invested on 

its behalf, and Treasury then makes the investment. In some cases, the 

actual security that Treasury should purchase is also specified. When a 

federal government account with investment authority needs to make 

disbursements, Treasury is normally notified of the amount of securities 

that need to be redeemed. In some cases, Treasury is also notified to 

redeem specific securities. The Treasury securities issued to federal 

government accounts with investment authority count against the debt 

limit. If these accounts’ receipts are not invested, the amount of debt 

subject to the limit does not increase.

12The majority of securities held by federal government accounts are Government 

Account Series (GAS) securities. GAS securities consist of par value securities and 

market-based securities, with terms ranging from on demand out to 30 years. Par value 

securities are issued and redeemed at par (100 percent of face value), regardless of 

current market conditions. Market-based securities, however, can be issued at a premium 

or discount and are redeemed at par value on the maturity date or at market value if 

redeemed before the maturing date. 
 

Page 7 GAO-12-701 Debt Limit

Under normal circumstances, the debt limit is not an impediment to 

carrying out these investment responsibilities. However, when federal 

debt is near or at the debt limit, increasing the debt limit frequently 

involves lengthy debate by Congress. When delays occur, Treasury has 

to depart from normal cash and debt management operations to avoid 

exceeding the debt limit. In 1986 and 1987, after Treasury’s experiences 

during prior debt limit crises, Congress authorized the Secretary of the 

Treasury to use the CSRDF and the Government Securities Investment 

Fund of the Federal Employees’ Retirement System (G-Fund) to help 

Treasury manage federal debt when delays in raising the debt limit occur. 

Treasury has also taken other actions in the past to manage federal debt 

during such delays. Table 1 provides an overview of each action. 
 

Page 8 GAO-12-701 Debt Limit

Table 1: Extraordinary Actions Available to Treasury to Manage Debt When Delays in Raising the Debt Limit Occur

Extraordinary action Description of extraordinary action 

Suspension of new issuances and 

conversion of demand deposit securities 

to special 90-day certificates of 

indebtedness of State and Local 

Government Series (SLGS) securities 

SLGS securities are special securities offered to state and local governments and other 

issuers of tax-exempt bonds. Suspending new SLGS issuances reduces uncertainty over 

future increases in debt subject to the limit but eliminates a flexible, low-cost option that 

state and local government issuers have frequently used when refinancing their existing 

debt before maturity. Converting SLGS demand deposit securities, which increase daily 

for the interest earned, to special 90-day certificates of indebtedness, which pay interest 

separately, results in debt subject to the limit not increasing daily for the interest earned.

Exchanging Federal Financing Bank (FFB) 

debt for debt subject to the limit 

FFB is a government corporation under the general supervision and direction of the 

Secretary of the Treasury, which borrows from the Treasury to finance purchases of 

agency debt and agency guaranteed debt. It can also issue up to $15 billion of its own 

debt—FFB 9(a) obligations—that is not subject to the debt limit. This debt can be 

exchanged with other federal debt (e.g., securities held by the CSRDF) to reduce the 

amount of debt subject to the limit. 

Suspension of investments to the 

Government Securities Investment Fund 

of the Federal Employees’ Retirement 

System (G-Fund)a

The G-Fund contains contributions made by federal employees toward their retirement as 

part of the Thrift Savings Plan program, which are invested in one-day nonmarketable 

Treasury securities that are subject to the debt limit. If the Secretary determines that the 

G-Fund may not be fully invested without exceeding the debt limit, Treasury can suspend 

investments for the entire amount or a portion of the G-Fund on a daily basis to reduce 

debt subject to the limit. Treasury must notify Congress in writing when the G-Fund 

cannot be fully invested without exceeding the debt limit. Treasury is required to make the 

G-Fund whole after the debt limit has been increased.

Suspension of Exchange Stabilization 

Fund (ESF) investments 

The ESF is used to help provide a stable system of monetary exchange rates. Dollardenominated assets of the ESF not used for program purposes are generally invested in 

one-day nonmarketable Treasury securities that are subject to the debt limit. When debt 

approaches the limit, Treasury can suspend investment for the entire amount or a portion 

of the ESF’s maturing nonmarketable Treasury securities. Treasury lacks legislative 

authority to restore lost interest to the ESF when the debt limit is increased. 

Suspension of new investments to the 

Civil Service Retirement and Disability 

Trust Fund (CSRDF) and Postal Service 

Retiree Health Benefits Fund (Postal 

Benefits Fund)b

Contributions into the CSRDF (by federal government agencies and their civilian 

employees toward retirement benefits) and Postal Benefits Fund (by the United States 

Postal Service toward its retirees’ health benefits) are invested in par value 

nonmarketable Treasury securities that are subject to the debt limit. Treasury is able to 

suspend new investments to the CSRDF and Postal Benefits Fund if the investment 

cannot be made without exceeding the debt limit. Treasury must notify Congress in writing 

when the CSRDF cannot be fully invested without exceeding the debt limit. Treasury is 

required to make the CSRDF and Postal Benefits Fund whole after the debt issuance 

suspension period (DISP)—a period in which Treasury determines that it cannot issue 

debt without exceeding the debt limit—has ended. 

Disinvestment of securities held by the 

CSRDF and Postal Benefits Fundc Treasury is able to disinvest (e.g., redeem earlier than normal) Treasury securities held by 

the CSRDF and Postal Benefits Fund to prevent the amount of debt from exceeding the 

debt limit. Treasury must determine that a DISP exists and the length of the DISP, which 

Treasury uses to determine the amount of investments that can be disinvested. Treasury 

also must notify Congress in writing when the CSRDF cannot be fully invested without 

exceeding the debt limit. Treasury is required to make the CSRDF and Postal Benefits 

Fund whole after the DISP has ended. 

Source: GAO analysis of related legislation and regulations. 

a

5 U.S.C. §§ 8438(g), (h).

b

5 U.S.C. §§ 8348(j), (l) and 5 U.S.C. § 8909a(c). 

c

5 U.S.C. §§ 8348(k), (l) and 5 U.S.C. § 8909a(c). 
 

Page 9 GAO-12-701 Debt Limit

We have previously reported on aspects of Treasury’s actions during the 

2003 and 2002 debt issuance suspension periods (DISP), and the 1995-

1996 and other debt limit crises.13

In January 2011, Treasury determined that the debt limit of 

$14.294 trillion set in February 2010 would likely be reached by May 16, 

2011. In May 2011, Treasury determined that it was necessary to use 

extraordinary actions to manage federal debt during the delay in raising 

the debt limit, which lasted through August 1, 2011. Treasury again 

determined that extraordinary actions were needed to manage federal 

debt in January 2012. Table 2 shows the significant events from 

January 6, 2011, through January 30, 2012, that relate to the debt limit. 

Table 2: Chronology of Events Related to the Debt Limit, January 2011 through January 2012

Date Event

Events leading up to the use of extraordinary actions in 2011

January 6, 2011 The Secretary of the Treasury sent a letter to the Senate Majority Leader requesting an increase in 

the debt limit. The letter stated that the debt limit would likely be reached sometime between March 

31, 2011, and May 16, 2011.

April 4, 2011 The Secretary of the Treasury sent a letter to the Senate and House Majority and Minority Leaders 

stating that Treasury’s updated estimates indicated that the debt limit would be reached no later 

than May 16, 2011. The letter projected that Treasury’s borrowing authority using available 

extraordinary measures would be exhausted after about July 8, 2011.

May 2, 2011 The Secretary of the Treasury sent a letter to the Senate and House Majority and Minority Leaders 

indicating that Treasury would begin suspending the issuance of SLGS securities on May 6, 2011, 

and if Congress had not increased the debt limit by May 16, 2011, Treasury would take further 

extraordinary actions beginning on that date. Treasury stated that these actions would extend 

Treasury’s borrowing authority until about August 2, 2011. 

Extraordinary actions in 2011

May 6, 2011 Treasury began suspending new issuances of SLGS securities and converted all outstanding SLGS 

demand deposit securities to special 90-day certificates of indebtedness. 

May 16, 2011 The Secretary of the Treasury notified Congress that he had determined a DISP existed from May 

16, 2011, until August 2, 2011, and Treasury

(1) redeemed a portion of investments held by the CSRDF earlier than normal and 

(2) began suspending new investments to the CSRDF.

The Secretary of the Treasury notified Congress that he would be unable to fully invest the G-Fund 

and Treasury began suspending investments to the G-Fund.

 

13GAO products related to federal debt and debt management, including the debt limit, can 

be found at http://www.gao.gov/special.pubs/longterm/past/#debt. 

Chronology of Events
 

Page 10 GAO-12-701 Debt Limit

Date Event

June 30, 2011 Treasury suspended new investments to the Postal Benefits Fund.

July 15, 2011 Treasury began suspending investments to the ESF.

Events to raise the debt limit and restore principal and interest in 2011

August 2, 2011 As authorized by the BCA, the debt limit increased $400 billion to $14.694 trillion.

Treasury invested all uninvested principal of the CSRDF, Postal Benefits Fund, G-Fund, and ESF. 

Treasury resumed the sale of SLGS securities and converted the special 90-day certificates of 

indebtedness back to demand deposits including accrued interest.

August 3, 2011 Treasury restored interest losses incurred by the G-Fund.

After close of business on 

September 21, 2011

As authorized by the BCA, the debt limit increased $500 billion to $15.194 trillion.

December 30, 2011 Treasury restored interest losses incurred by the CSRDF and the Postal Benefits Fund.

Extraordinary actions in January 2012

January 4, 2012 Treasury began suspending investments to the ESF. 

January 17, 2012 The Secretary of the Treasury notified Congress that he would be unable to fully invest the G-Fund 

and Treasury began suspending investments to the G-Fund. 

Events to raise the debt limit and restore principal and interest in January 2012

After close of business on 

January 27, 2012

As authorized by the BCA, the debt limit increased $1.2 trillion to $16.394 trillion.

January 30, 2012 Treasury invested all uninvested principal of the G-Fund and ESF and restored interest losses 

incurred by the G-Fund. 

Source: GAO analysis of congressional actions and documentation from Treasury.

The extraordinary actions Treasury took during 2011 and January 2012 to 

manage federal debt when delays in raising the debt limit occurred were 

consistent with relevant authorizing legislation and regulations. These 

actions related to State and Local Government Series (SLGS) securities, 

and the CSRDF, Postal Service Retiree Health Benefits Fund (Postal 

Benefits Fund), G-Fund, and Exchange Stabilization Fund (ESF). For 

other major federal government accounts with investment authority, 

Treasury used its normal investment and redemption policies and 

procedures to handle receipts and maturing investments and to redeem 

Treasury securities. 

Extraordinary Actions 

to Manage Debt Were 

Consistent with 

Legislation and 

Regulations 
 

Page 11 GAO-12-701 Debt Limit

Treasury took the first extraordinary action on May 6, 2011, by 

suspending new issuances of SLGS securities.

14

The Secretary of the Treasury notified Congress that he had determined 

that a DISP existed for the CSRDF on May 16, 2011, after concluding that 

he would not be able to issue debt securities without exceeding the debt

limit. On that day, Treasury redeemed certain investments held by the 

CSRDF earlier than normal and began suspending new investments of 

CSRDF receipts. Treasury did not use its authority to redeem or suspend 

investments of the CSRDF during January 2012.

 Prior to the suspension, 

the reported amount of SLGS securities outstanding was about 

$177.3 billion. This level declined to a reported amount of about 

$146.5 billion by August 1, 2011. On August 2, 2011, Treasury resumed 

the sale of SLGS securities. Treasury also converted SLGS demand 

deposit securities outstanding on May 6, 2011, to special 90-day 

certificates of indebtedness. On August 2, 2011, Treasury converted the 

special 90-day certificates of indebtedness back to demand deposits 

including accrued interest. Treasury maintained spreadsheets to track the 

certificates of indebtedness and the daily interest accruals. Treasury’s 

actions related to the SLGS demand deposit securities were in 

accordance with 31 C.F.R. Part 344.7 (b), which authorizes the Secretary 

of the Treasury to invest any unredeemed SLGS demand deposit 

securities in special 90-day certificates of indebtedness. Treasury did not 

use its authority to suspend new issuances of or convert SLGS securities 

during January 2012.

Subsection 8348(k) of title 5, United States Code, authorizes the

Secretary of the Treasury to redeem securities or other invested assets of

the CSRDF before maturity to prevent the amount of debt from exceeding 

the debt limit. The statute does not require that early redemptions be 

made only for the purpose of making CSRDF payments. Further, the 

statute permits early redemptions even if the CSRDF has adequate cash 

balances to cover such payments. However, the statute provides that the 

amount redeemed may not exceed the total amount of the payments 

authorized to be made from the CSRDF during the DISP.

 

14Treasury announced that subscriptions for SLGS securities received before noon 

Eastern Daylight Time on May 6, 2011, would be honored. 

Actions Related to SLGS 

Securities 

Actions Related to the 

CSRDF 

Early Redemption of Securities 

Held by the CSRDF
 

Page 12 GAO-12-701 Debt Limit

Treasury decided to redeem securities held by the CSRDF earlier than 

normal in accordance with subsection 8348(k)(1) of title 5, United States 

Code. To take such action, the Secretary of the Treasury must determine 

that a DISP exists and the length of the DISP. The statute authorizing the 

DISP and its legislative history are silent as to how to determine the 

length of a DISP. On May 16, 2011, the Secretary of the Treasury notified 

Congress that a DISP, as it relates to the CSRDF, would begin that day 

and would last through August 2, 2011. 

On May 16, 2011, Treasury redeemed about $17.1 billion of securities 

held by the CSRDF before maturity using its authority under subsection 

8348(k)(1) of title 5, United States Code. The $17.1 billion redemption 

amount was determined based on (1) the length of the DISP (May 16, 

2011, through August 2, 2011) and (2) the estimated monthly CSRDF 

benefit payments and expenses that would occur during that time.15

From May 16, 2011, through July 31, 2011, about $11.8 billion of actual 

benefit payments and expenses occurred, leaving about $5.3 billion of 

uninvested principal from the $17.1 billion that had been redeemed early. 

On August 1, 2011, benefit payments were about $5.7 billion. As such, 

Treasury redeemed only the approximate $0.4 billion difference between 

the $5.3 billion uninvested principal amount and the actual amount of 

benefit payments to be made. 

These were appropriate factors to use in determining the amount of 

Treasury securities held by the CSRDF to redeem early. 

Subsection 8348(j)(1) of title 5, United States Code, authorizes the 

Secretary of the Treasury to suspend additional investment of amounts in 

the CSRDF if the investment cannot be made without exceeding the debt 

limit. From May 16, 2011, through August 1, 2011, Treasury suspended 

about $86 billion of investments to the CSRDF. Of this amount, 

$63.1 billion related to securities that matured on June 30, 2011, and 

were to be reinvested; $17.4 billion was from the semiannual interest 

payment on June 30, 2011; and $5.5 billion represented cash receipts. 

 

15CSRDF benefit payments and expenses for May through August 2011 were estimated 

to be approximately $5.9 billion monthly, with the majority occurring on the first business 

day of the month.

Suspension of New 

Investments to the CSRDF 
 

Page 13 GAO-12-701 Debt Limit

Subsection 8909a(c) of title 5, United States Code, requires investments 

to be made for the Postal Benefits Fund in the same manner as 

investments for the CSRDF under section 8348. This includes the 

provisions authorizing the early redemption and suspension of 

investments. As discussed above for the CSRDF, the amount redeemed 

earlier than normal may not exceed the total amount of the payments 

authorized to be made during the DISP. Subsection 8906(g)(2)(A) of title 

5, United States Code, authorizes payments to be made from the Postal 

Benefits Fund beginning after September 30, 2016. As such, Treasury did 

not redeem investments of the Postal Benefits Fund earlier than normal 

during 2011 and January 2012. On June 30, 2011, Treasury suspended 

about $9.5 billion of new investments to the Postal Benefits Fund. Of this 

amount, $8.7 billion related to securities that matured on June 30, 2011, 

and were to be reinvested, and $0.8 billion was from the semiannual 

interest payment on June 30, 2011. Treasury did not use its authority to

suspend investments of the Postal Benefits Fund during January 2012.

Subsection 8438(g)(1) of title 5, United States Code, authorizes the 

Secretary of the Treasury to suspend the issuance of additional amounts 

of investments to the G-Fund if the issuance cannot be made without 

causing the debt limit to be exceeded. On most days from May 16, 2011, 

through August 1, 2011, and each day from January 17, 2012, through 

January 27, 2012, Treasury did not fully invest the holdings of the 

G-Fund. Since the G-Fund invests in one-day securities that are 

redeemed and reinvested each business day, the amount of uninvested 

principal varied most days depending on the federal government’s 

outstanding debt. Although Treasury can accurately predict the outcome 

of some events that affect the outstanding debt, it cannot precisely 

determine the outcome of others until they occur. For example, the 

amount of Treasury securities that Treasury will issue to the public from 

an auction can be determined some days in advance because Treasury 

can control the amount that will be issued. On the other hand, the amount 

of savings bonds that will be issued and redeemed and the amount of 

Treasury securities that will be issued to, or redeemed by, various federal 

government accounts with investment authority are difficult to precisely 

predict. Because of these difficulties, Treasury needed to ensure that the 

normal investment and redemption activities associated with Treasury 

securities did not cause the debt limit to be exceeded while also 

Actions Related to the 

Postal Benefits Fund

Actions Related to the 

G-Fund 
 

Page 14 GAO-12-701 Debt Limit

maintaining normal investment and redemption policies for the majority of 

these accounts. To accomplish these objectives, for each day of the 

above-noted periods, Treasury 

• calculated the amount of debt subject to the limit, excluding the

receipts that the G-Fund would normally invest;

• determined the amount of G-Fund receipts that could safely be 

invested without exceeding the debt limit and invested this amount in 

Treasury securities; and

• suspended investment, when necessary, of the G-Fund’s remaining

receipts.

As of August 1, 2011, the business day prior to the debt limit increase, the 

G-Fund had approximately $137.5 billion available for suspension, with 

the entire amount suspended as of that date. As of January 27, 2012, the 

business day prior to the debt limit increase, the G-Fund had 

approximately $147.6 billion available for suspension, with about 

$36.9 billion suspended as of that date. 

The purpose of the ESF is to help provide a stable system of monetary 

exchange rates. The law establishing the ESF authorizes the Secretary of 

the Treasury to invest the ESF’s balances not needed for program 

purposes in Treasury securities. Section 5302 of title 31, United States 

Code, authorizes the Secretary of the Treasury to determine when, and if, 

excess funds for the ESF will be invested. On several occasions from 

July 15, 2011, through August 1, 2011, and each day from January 4, 

2012, through January 27, 2012, Treasury did not fully invest the dollardenominated portion of the ESF in Treasury securities. Since the ESF 

invests the dollar-denominated portion of the fund in one-day Treasury 

securities that are redeemed and reinvested each business day, the 

amount of uninvested principal varied several days, depending on the 

federal government’s outstanding debt. For each day, Treasury 

determined the amount of funds that the ESF would be allowed to invest 

in Treasury securities and, when necessary, suspended some 

investments of the ESF receipts and maturing securities that would have 

caused the debt limit to be exceeded. The process discussed above for 

the G-Fund was also used for the ESF. During the 2011 period, the ESF 

had approximately $22.8 billion available for suspension, with about 

$6.9 billion of this amount suspended as of August 1, 2011, the business 

day prior to the debt limit increase. During January 2012, the ESF had 

approximately $22.7 billion available for suspension, with the entire 

amount suspended as of January 17, 2012. The entire amount continued 

Actions Related to the ESF
 

Page 15 GAO-12-701 Debt Limit

to be suspended each day through January 27, 2012, the business day 

prior to the debt limit increase. 

As a result of an error in calculating debt subject to the limit from 

November 2, 2011, through December 29, 2011, Treasury suspended an 

incorrect amount from the ESF from January 4, 2012, through 

January 10, 2012. A programming change to Treasury’s debt accounting 

system caused an incorrect calculation of unamortized discounts on 

Treasury bills to be subtracted from total debt outstanding in calculating 

debt subject to the limit.16 Treasury identified the error during a 

contingency operation on December 29, 2011. At that time, the 

cumulative effect of the error was $181 million. The error in the program 

was corrected immediately; however, the adjustment to correct the 

$181 million was not recorded until January 11, 2012.17

Debt subject to the limit was sufficiently below the debt limit from 

November 2, 2011, through January 3, 2012, such that if the error was 

taken into account, debt subject to the limit would still have been below 

the debt limit. Treasury began using the ESF to manage federal debt 

during the delay in raising the debt limit on January 4, 2012. To determine 

whether Treasury would have exceeded the debt limit from January 4, 

2012, through January 10, 2012, absent this error, we reviewed the 

invested balances of the ESF during this period. Based on our review, we 

found that the ESF had sufficient invested balances that could have been 

used to manage federal debt during the delay. For example, as of 

January 10, 2012, cumulative investments totaling $12.306 billion had 

been suspended from the ESF. If the error had not occurred, cumulative 

investments totaling $12.487 billion would have been suspended from the 

ESF, $181 million more than what was actually suspended, but well 

below the approximate $22.7 billion available for suspension. Therefore, 

Treasury would have been able to suspend additional investments from 

the ESF to remain under the debt limit. As a result of overinvesting the 

ESF from January 4, 2012, through January 10, 2012, Treasury also 

 

 

16Treasury bills are usually issued at a discount from the face value, but may also be 

issued at par. The discounts are amortized (or expensed) over the term of the securities 

with the amount yet to be amortized referred to as the unamortized discount. 

17While Treasury identified the source of the error on December 29, 2011, additional 

research was required to determine the period of the error and the amount involved. 
 

Page 16 GAO-12-701 Debt Limit

overpaid interest to the ESF during this period. Treasury corrected the 

interest paid by making an adjustment of $402.63 on January 11, 2012. 

We analyzed major federal government accounts with investment 

authority for which Treasury stated it had followed its normal investment 

and redemption policies and procedures during the periods from May 16, 

2011, through August 1, 2011, and from January 4, 2012, through 

January 27, 2012, to manage federal debt when delays in raising the debt 

limit occurred.18 Our analysis was intended to verify that Treasury’s 

actions to manage federal debt during such delays did not involve federal 

government accounts that Treasury is not authorized to use in such 

situations. We found that for all the accounts we reviewed, Treasury used 

its normal investment and redemption policies and procedures to handle 

receipts and maturing investments and to redeem Treasury securities. 

Table 3 lists the federal government accounts with investment authority 

included in our analysis.

 

18Our analysis focused on accounts with reported balances as of April 30, 2011, and 

December 31, 2011, of Treasury securities greater than $10 billion. 

Normal Investment and 

Redemption Policies Used 

on Major Federal 

Government Accounts 

with Investment Authority
 

Page 17 GAO-12-701 Debt Limit

Table 3: Reported Balances as of April 30, 2011, and December 31, 2011, of Treasury Securities Held by Selected Major 

Federal Government Accounts with Investment Authority

Dollars in billions

Federal government accounts with investment authoritya

Treasury securities

held as of 

April 30, 2011b

Treasury securities 

held as of 

December 31, 2011b

SSA: Federal Old-Age and Survivors Insurance Trust Fundc $2,450 $2,525

OPM: Civil Service Retirement and Disability Fund d 803e

DOD: Military Retirement Fund 335 383

HHS: Federal Hospital Insurance Trust Fundf 261 244

SSA: Federal Disability Insurance Trust Fundc 173 154

DOD: DOD Medicare-Eligible Retiree Health Care Fund 161 177

HHS: Federal Supplementary Medical Insurance Trust Fundf 72 80

DOE: Nuclear Waste Disposal Fund 48 49

OPM: Postal Service Retiree Health Benefits Fund d 45

FDIC: The Deposit Insurance Fund 39 32

OPM: Employees Life Insurance Fund 39 40

DOT: Highway Trust Fund 24 14

OPM: Employees Health Benefits Fund 18 19

DOS: Foreign Service Retirement and Disability Fund 16 17

DOL: Pension Benefit Guaranty Corporation 15 15

DOL: Unemployment Trust Fund 12 16

NCUA: National Credit Union Share Insurance Fund 10 11

Total $3,673 $4,624

Source: Monthly Statements of the Public Debt of the United States for April 30, 2011, and December 31, 2011. 

a

Social Security Administration (SSA), Department of Defense (DOD), Department of Health and 

Human Services (HHS), Department of Energy (DOE), Federal Deposit Insurance Corporation 

(FDIC), Office of Personnel Management (OPM), Department of Transportation (DOT), Department of 

State (DOS), Department of Labor (DOL), National Credit Union Administration (NCUA). 

b

These represent the reported holdings as of the month-end dates that immediately preceded 

Treasury’s initiation of extraordinary actions.

c

These are the Social Security trust funds.

d

Treasury took extraordinary actions related to these funds during 2011 to manage federal debt when 

delays in raising the debt limit occurred. As such, normal investment and redemption policies and 

procedures were not followed for these funds.

e

The CSRDF also held about $8 billion of FFB securities, which are not GAS securities. The reported 

balance of these securities remained the same throughout January 2012.

f

These are the Medicare trust funds.
 

Page 18 GAO-12-701 Debt Limit

In accordance with relevant legislation and consistent with the timing of 

the debt limit increases authorized by the BCA, Treasury restored the 

uninvested principal amounts to the CSRDF, Postal Benefits Fund, and 

G-Fund, and invested the uninvested principal to the ESF totaling 

approximately $299.5 billion. This amount consisted of (1) $239.9 billion 

of uninvested principal relating to the period from May 16, 2011, through 

August 1, 2011,19

Table 4: Restored Principal and Interest Related to Extraordinary Actions Taken to Manage Debt during 2011 and January 

2012

and (2) $59.6 billion relating to the period in January 

2012, in which Treasury took extraordinary actions to manage federal 

debt when delays in raising the debt limit occurred. In accordance with 

legislation, Treasury also restored interest losses totaling approximately 

$933.8 million to the CSRDF, Postal Benefits Fund, and G-Fund. This 

amount consisted of (1) $916.9 million relating to the period from May 16, 

2011, through August 1, 2011, and (2) $16.9 million relating to the period 

in January 2012. Treasury lacks legislative authority under section 5302 

of title 31, United States Code, to restore interest losses to the ESF. 

Table 4 summarizes the amounts of principal and interest restored. 

Federal government 

accounts

2011 January 2012

Uninvested principal 

as of August 1, 2011

Interest losses from 

May 16-August 1, 2011

Uninvested principal as 

of January 27, 2012

Interest losses from 

January 4-27, 2012

CSRDF $86.0 billion $516.9 million n/a n/a

Postal Benefits Fund $9.5 billion $21.5 million n/a n/a

G-Fund $137.5 billion $378.5 million $36.9 billion $16.9 million

ESF $6.9 billiona a $22.7 billiona a

Total $239.9 billion $916.9 million $59.6 billion $16.9 million

Source: GAO analysis of documentation from Treasury.

a

Section 5302 of title 31, United States Code, provides Treasury the authority to invest principal of the 

ESF. Treasury did not restore interest losses of $55,630 for 2011 and $284,691 for January 2012 

relating to the ESF because it lacks legislative authority to do so under section 5302 of title 31, United 

States Code.

Subsections 8348(j)(3) and (4) of title 5, United States Code, require 

Treasury to immediately restore, to the maximum extent practicable, the 

CSRDF’s Treasury holdings to the proper balances when a DISP ends 

 

19The investment of uninvested principal of $239.9 billion used a large portion of the 

$400 billion increase to the debt limit on August 2, 2011. 

Treasury Restored 

Uninvested Principal 

and Interest Losses as 

Authorized 

CSRDF and Postal Benefits 

Fund 
 

Page 19 GAO-12-701 Debt Limit

and to restore lost interest on the next normal interest payment date. 

Treasury is required by subsection 8909a(c) of title 5, United States 

Code, to follow these same procedures for the Postal Benefits Fund. 

Consequently, Treasury took the following actions, with respect to these 

two funds, once the DISP for 2011 had ended: 

• Treasury invested about $86 billion of uninvested principal to the 

CSRDF on August 2, 2011, which equaled the amount of new 

investments suspended during 2011. 

• All of the $17.1 billion of Treasury securities held by the CSRDF that 

Treasury redeemed earlier than normal had been used for CSRDF 

benefit payments and expenses during the DISP. As such, there was 

no remaining amount required to be invested.

• Treasury invested about $9.5 billion of uninvested principal to the 

Postal Benefits Fund on August 2, 2011, which equaled the amount of

new investments suspended during 2011. 

• On December 30, 2011, Treasury paid the CSRDF about 

$516.9 million and the Postal Benefits Fund about $21.5 million to 

restore interest losses incurred because of the actions Treasury had 

taken during the DISP. Because December 30, 2011, was the first 

semiannual interest payment date since the DISP ended, this was the 

proper restoration date according to the statute authorizing the 

restoration. 

We verified that subsequent to the initiation and recording of these 

transactions, the CSRDF’s and Postal Benefits Fund’s holdings were, in 

effect, the same as they would have been had the DISP not occurred.

On August 1, 2011, and January 27, 2012, the last business days before 

the debt limit was raised, the G-Fund had uninvested principal of about 

$137.5 billion and $36.9 billion, respectively. On August 2, 2011, and 

January 30, 2012, Treasury invested all uninvested principal for the 

G-Fund, as required by subsection 8438(g)(3) of title 5, United States 

Code. Treasury is also required by subsection 8438(g)(4) of title 5, United 

States Code, to make the G-Fund whole by restoring any losses once the 

suspension of debt has ended. During May through August 2011 and 

January 2012, interest losses to the G-Fund were about $378.5 million 

and $16.9 million, respectively, because its funds were not fully invested. 

On August 3, 2011, and January 30, 2012, Treasury fully restored the lost 

interest on the G-Fund’s uninvested funds. We verified that subsequent to 

the initiation and recording of these transactions, the G-Fund’s holdings 

were, in effect, the same as they would have been had the suspensions 

of debt not occurred. 

G-Fund 
 

Page 20 GAO-12-701 Debt Limit

On August 1, 2011, and January 27, 2012, the last business days before 

the debt limit was raised, the ESF had uninvested principal of about 

$6.9 billion and $22.7 billion, respectively. On August 2, 2011, and 

January 30, 2012, Treasury invested all uninvested principal for the ESF. 

During May through August 2011 and January 2012, interest losses to the 

ESF were $55,630 and $284,691, respectively, because its funds were 

not fully invested. Treasury has the authority in section 5302 of title 31, 

United States Code, to invest principal of the ESF. However, the 

Secretary of the Treasury lacks legislative authority to restore any interest 

losses relating to the ESF incurred as a result of authorized actions taken 

by Treasury to manage federal debt when delays in raising the debt limit 

occur. We verified that Treasury properly invested the ESF’s uninvested 

principal and, in accordance with the law, did not restore interest losses.

Congress usually votes on increasing the debt limit after fiscal policy 

decisions affecting federal borrowing have begun to take effect. Debt limit 

increases frequently involve lengthy debate, with the debates often 

occurring when federal debt is near or at the debt limit. We reported in 

February 2011 that managing debt when delays in raising the debt limit 

occur diverts Treasury’s resources away from other cash and debt 

management responsibilities and that Treasury’s borrowing costs 

modestly increased during debt limit debates in 2002, 2003, and 2010.20

As discussed below, increased borrowing costs also occurred during 

2011 when there was a delay in raising the debt limit. For the January 

2012 period, we found that there was no consistent pattern of yield 

spread changes and the changes in borrowing costs were negligible. This 

was expected given that the BCA provided for a future debt limit increase, 

which minimized uncertainty in the Treasury market. In addition, 

managing federal debt during such delays affected Treasury’s normal 

operations in 2011 and January 2012.

 

20GAO-11-203. 

ESF 

Delays in Raising the 

Debt Limit Increased 

Treasury’s Borrowing 

Costs and Affected Its 

Operations 
 

Page 21 GAO-12-701 Debt Limit

Our analysis indicates that delays in raising the debt limit in 2011 led to 

increased borrowing costs on certain securities. We measured changes in 

Treasury’s borrowing costs when delays in raising the debt limit occurred 

in 2011 using a multivariate regression analysis of the daily yield 

spread—yields on private securities minus yields on Treasury securities 

of comparable maturities—between the debt limit event period and the 

previous 3 months, or pre-event period. Rates for Treasury and other 

securities fluctuate from day to day in response to changes in the broader 

economy. Focusing on a yield spread rather than changes in individual 

interest rates facilitated the measurement of changes in the relative risk of 

Treasury securities and the identification of potential risk premiums

(which is represented by a decrease in the yield spread). We also 

controlled for other factors that could affect the yield spread, such as the 

Federal Reserve’s holdings of Treasury securities and economic 

uncertainty. (See app. II for more details on how we estimated increased 

borrowing costs.) The results of our multivariate regression analysis 

describe the change in yield spreads attributable to delays in raising the 

debt limit. The estimated increase or decrease in the yield spreads 

between the pre-event and event periods is shown in figure 2. 

Treasury’s Borrowing 

Costs on Certain Securities 

Increased When Delays in 

Raising the Debt Limit 

Occurred in 2011
 

Page 22 GAO-12-701 Debt Limit

Figure 2: Estimated Increase or Decrease in Spreads between Private and Treasury Security Yields for the 2011 Debt Limit 

Event Period (January 6, 2011, through August 1, 2011)

A decrease in the yield spread indicates that the market perceives the risk 

of Treasury securities to be closer to that of private securities, increasing 

the cost to Treasury. Conversely, an increase in the yield spread 

indicates that the market perceives the risk of Treasury securities to have 

decreased relative to that of private securities, making the securities less 

costly to Treasury. We found that the 2011 debt limit event led to a 

premium on Treasury securities with maturities of 2 years or more while 

Treasury securities with shorter maturities either experienced no change 

or became slightly less costly relative to private securities. Applying the 

relevant increase or decrease in the yield spread shown in figure 2 to all 

Treasury bills, notes, bonds, CM bills, and TIPS issued during the 2011 

debt limit event period, we estimated that borrowing costs increased by 

about $1.3 billion in fiscal year 2011.21

 

21The 95 percent confidence interval of the borrowing cost estimate is about $1 billion to 

$1.7 billion. 

Many of the Treasury securities 
 

Page 23 GAO-12-701 Debt Limit

issued during the 2011 debt limit event period will remain outstanding for 

years to come. Accordingly, the multiyear increase in borrowing costs 

arising from the event is greater than the additional borrowing costs

during fiscal year 2011 alone. 

There are limitations to using a multivariate regression to measure 

changes in Treasury’s borrowing costs attributable to delays in raising the 

debt limit. Most important, many economic and financial developments 

besides the uncertainty in the Treasury market arising from delays in 

raising the debt limit likely affected yield spreads during this period. While 

we controlled for changes in Federal Reserve holdings of Treasury 

securities, stock market uncertainty, and economic activity, we cannot 

capture every development affecting yield spreads, such as other policy 

changes not easily quantifiable that might affect yield spreads.

Debt and cash management required more time and Treasury resources 

as delays in raising the debt limit occurred in 2011 and January 2012. For 

example, Treasury staff (1) forecasted and monitored with increasing 

frequency and in increasing detail cash and borrowing needs and 

(2) developed, reviewed, and tested contingency plans and alternative 

scenarios for the possible implementation of extraordinary actions. 

According to Treasury officials, these activities diverted time and Treasury 

resources from other cash and debt management responsibilities. We 

reviewed estimates provided by the Office of Fiscal Projections (OFP) 

and the Bureau of the Public Debt (BPD), the entities primarily affected by 

the delays, which indicated that these entities’ personnel devoted as 

much as several hundred hours per week to managing federal debt when 

delays in raising the debt limit occurred in 2011 and January 2012. 

According to Treasury officials, for 2011, Treasury’s operational focus on 

the debt limit began at least 6 months before the debt limit was expected 

to be reached and increased as debt neared the limit. Treasury’s OFP

staff developed estimates under multiple scenarios of when debt might 

reach the debt limit. As federal debt neared the debt limit, these estimates

were developed weekly, then daily, and finally multiple times a day. 

According to Treasury officials, preparing these estimates, informing 

departmental officials, and other preparatory tasks were a critical focus of 

OFP’s staff. To manage federal debt when delays in raising the debt limit 

occurred in 2011, Treasury officials estimated that OFP spent almost 15 

staff hours per business day performing these tasks. In addition, Treasury 

officials estimated that OFP expended about 200 staff hours in total to 

prepare for and manage the extraordinary actions taken in January 2012. 

Managing Debt When 

Delays in Raising the Debt 

Limit Occurred in 2011 and 

January 2012 Affected

Treasury’s Normal 

Operations 
 

Page 24 GAO-12-701 Debt Limit

BPD—the bureau within Treasury that is responsible for implementing the 

extraordinary actions and for the accounting associated with those 

transactions—also dedicated extensive resources to operations related to 

the debt limit. BPD estimated that managing federal debt when delays in 

raising the debt limit occurred in 2011 and January 2012 resulted in 

almost 5,750 hours of work, including over 400 hours of overtime and 

compensatory time. This included more than 1,200 hours in the weeks 

prior to the use of extraordinary actions for meetings, preparation of 

parallel accounts and spreadsheets to use in tracking uninvested principal 

and interest losses, tests of the accounting system, and training staff. The 

majority of time was spent implementing the extraordinary actions. BPD 

estimated that it spent almost 63 staff hours per business day on debt 

limit–related activities from May 16, 2011, through August 1, 2011, and 

almost 31 staff hours per business day from January 4, 2012, through

January 27, 2012. After the debt limit was increased, BPD estimated that 

it spent over 500 hours on activities such as restoring uninvested funds

and preparing reports. 

Treasury officials said that the increased focus on debt limit–related 

operations in the months and weeks approaching the debt limit diverted 

time and attention from other cash and debt management tasks that could 

improve Treasury operations. For example, according to Treasury

officials, OFP delayed participation in federal cash expenditure process 

modernization efforts and the development of a new fiscal forecasting 

system. Similarly, BPD officials said that they spent less time updating 

procedures for issuing debt to the public and modernizing debt 

accounting systems. According to these officials, these activities help 

Treasury more accurately project future borrowing needs and perform 

debt management activities more effectively. More accurately projecting 

future borrowing needs helps Treasury avoid (1) borrowing more than is 

needed to fund the government’s immediate needs, which results in 

increased interest costs, and (2) borrowing less than is sufficient to 

maintain Treasury’s operating cash balance at a minimum level through 

regularly scheduled issuances of marketable Treasury securities, which 

may require Treasury to issue CM bills with little advance notice to the 

market, resulting in potentially higher interest costs. Treasury officials also 

stated that they spent less time on staff development and program 

oversight activities to perform additional tasks needed to manage federal 

debt when delays in raising the debt limit occurred. 
 

Page 25 GAO-12-701 Debt Limit

The extraordinary actions Treasury took during 2011 and January 2012 to 

manage federal debt when delays in raising the debt limit occurred were 

consistent with relevant authorizing legislation and regulations. However,

delays in raising the debt limit can create uncertainty in the Treasury 

market and lead to higher borrowing costs. We estimated that delays in 

raising the debt limit in 2011 led to an increase in Treasury’s borrowing 

costs of about $1.3 billion in fiscal year 2011. However, this does not 

account for the multiyear effects on increased costs for Treasury 

securities that will remain outstanding after fiscal year 2011. Further, 

managing federal debt as such delays occurred was complex, timeconsuming, and technically challenging. According to Treasury officials, 

these events diverted Treasury’s staff away from other important cash 

and debt management responsibilities as well as staff development and 

program oversight activities. 

Congress usually votes on increasing the debt limit after fiscal policy 

decisions affecting federal borrowing have begun to take effect. This 

approach to raising the debt limit does not facilitate debate over specific 

tax or spending proposals and their effect on debt. In February 2011, we 

reported, and continue to believe, that Congress should consider ways to 

better link decisions about the debt limit with decisions about spending 

and revenue to avoid potential disruptions to the Treasury market and to 

help inform the fiscal policy debate in a timely way. 

We requested comments on a draft of this report from the Secretary of 

the Treasury. In providing oral comments on the draft, Treasury broadly 

agreed with the draft’s conclusions, expressed appreciation for our efforts 

to estimate the monetary impact of delays in raising the debt limit on 

Treasury’s borrowing costs, and also commented on the broader impact 

of delays in raising the debt limit on the economy, which was beyond the 

scope of our review. Treasury also provided technical comments, which 

we incorporated as appropriate.

We will send copies of this report to interested congressional committees, 

the Secretary of the Treasury, and other interested parties. In addition, 

the report is available at no charge on the GAO website at

http://www.gao.gov. 

Concluding 

Observations 

Agency Comments
 

Page 26 GAO-12-701 Debt Limit

If you or your staff have any questions about this report, please contact 

Gary T. Engel at (202) 512-3406 or engelg@gao.gov, Susan J. Irving at 

(202) 512-6806 or irvings@gao.gov, or Thomas J. McCool at (202) 512-

2642 or mccoolt@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix III. 

Gary T. Engel

Director

Financial Management and Assurance

Susan J. Irving

Director for Federal Budget Analysis

Strategic Issues

Thomas J. McCool

Director

Center for Economics, Applied Research and Methods
Appendix I: Objectives, Scope, and 

Methodology

Page 27 GAO-12-701 Debt Limit

With regard to actions taken by the Department of the Treasury 

(Treasury) during 2011 and January 2012 to manage federal debt when 

delays in raising the debt limit occurred, our objectives were to (1) provide 

a chronology of the significant events, (2) analyze whether actions taken 

by Treasury were consistent with legal authorities provided to manage 

federal debt during such delays, (3) assess the extent to which Treasury 

restored uninvested principal and interest losses to federal government 

accounts in accordance with relevant legislation, and (4) analyze the 

effect that delays in raising the debt limit had on Treasury’s borrowing 

costs and operations. 

To address the first objective, we reviewed congressional actions 

increasing the debt limit and Treasury correspondence, announcements, 

and documentation of the extraordinary actions taken. We reviewed 

letters sent by the Secretary of the Treasury to Congress requesting debt 

limit increases and discussing when Treasury’s borrowing authority would 

be exhausted, and Treasury announcements of specific extraordinary 

actions. For each business day from May 16, 2011, through August 2, 

2011, and January 4, 2012, through January 30, 2012, we reviewed 

correspondence from Treasury’s Office of Fiscal Projections (OFP) to

Treasury’s Bureau of the Public Debt (BPD) providing specific instructions 

and timing of the extraordinary actions to be taken as well as BPD’s 

documentation implementing the actions.

We performed the work for the second and third objectives as part of our 

financial audits of the fiscal years 2011 and 2012 Schedules of Federal 

Debt Managed by BPD.

1

 

1

GAO, Financial Audit: Bureau of the Public Debt’s Fiscal Years 2011 and 2010 

Schedules of Federal Debt, 

To address the second objective, for each 

business day during the above-noted periods, we reviewed Treasury 

accounting documentation, including specific instructions from OFP to 

BPD, to verify that the extraordinary actions taken for the affected federal 

government accounts were consistent with relevant legislation. For 

suspensions of investments, we reviewed BPD documentation and 

verified that BPD only invested the amount instructed by OFP using the 

appropriate security type and date. For the one Civil Service Retirement 

and Disability Fund (CSRDF) security that was redeemed earlier than 

normal, we reviewed BPD documentation and verified that BPD 

processed it for the amount, security type, and date as instructed by OFP. 

GAO-12-164 (Washington, D.C.: Nov. 8, 2011). 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-12-701 Debt Limit

For State and Local Government Series (SLGS) securities, we reviewed 

Treasury documentation of actions taken to suspend new issuances and 

convert SLGS demand deposit securities and compared those actions 

taken to authorizing regulations.

Over 230 federal government accounts have the authority or the 

requirement to invest excess receipts in Treasury securities, and 

Treasury officials stated that normal investment and redemption policies 

and procedures were used for all but 4 of these accounts for 2011 and 2 

of these accounts for January 2012. To evaluate whether Treasury 

followed normal investment and redemption policies and procedures for 

federal government accounts not affected by the extraordinary actions, 

we selected for review accounts with balances greater than $10 billion as 

of April 30, 2011 (15 accounts) and December 31, 2011 (17 accounts). As 

of both dates, this represented about 97 percent of the reported total of 

Treasury securities held by the federal government accounts not affected 

by the extraordinary actions. We obtained investment and redemption 

activity files from BPD for these accounts and performed the following 

audit procedures: 

• Reviewed trends in daily investment and redemption activity and 

compared these trends to prior year trends to determine whether 

there were any unusual fluctuations.

• Selected and reviewed investment and redemption transactions 

greater than $5 billion from May 16, 2011, through August 1, 2011, 

and January 4, 2012, through January 27, 2012, to determine whether 

the transactions were processed in accordance with Treasury’s 

normal policies and procedures. The selected transactions for the 

2011 and 2012 periods represented about 86 percent and 78 percent, 

respectively, of the total investment transactions, and 81 percent and 

80 percent, respectively, of the total redemption transactions.

• Confirmed with personnel from the respective agencies the total 

amount of investments and redemptions reported by Treasury from 

May 16, 2011, through August 1, 2011.2

 

2

We determined that it was not necessary to perform this step for the January 2012 period 

of managing federal debt when delays in raising the debt limit occurred because the risks 

associated with this period were minimal. Specifically, the January 2012 period lasted 17 

business days and Treasury only used a small portion of the extraordinary actions 

available. 

 
Appendix I: Objectives, Scope, and 

Methodology

Page 29 GAO-12-701 Debt Limit

We also reviewed Treasury reports of fund balances for federal 

government accounts with investment authority to identify any large 

positive uninvested balances, which would indicate that normal policies 

and procedures were not being followed, as of the end of the month for 

May through September 2011, December 2011, and January 2012. 

To address the third objective, we reviewed BPD schedules and parallel 

accounts of uninvested principal and forgone interest for the CSRDF, 

Postal Service Retiree Health Benefits Fund, Government Securities 

Investment Fund of the Federal Employees’ Retirement System, and 

Exchange Stabilization Fund. We recalculated the cumulative uninvested 

principal as of August 1, 2011, and January 27, 2012, and compared our 

calculations to BPD restoration entries. We also recalculated the forgone 

interest on these uninvested principal amounts and compared our 

calculations to BPD’s interest restoration entries. We reviewed accounting 

documentation of Treasury actions to restore uninvested principal and 

interest and compared these actions to relevant legislation.

To address the fourth objective, we performed a multivariate regression 

analysis of the daily yield spread—yields on private securities minus 

yields on Treasury securities of comparable maturities—during the 2011

debt limit event period. We used yield spreads during the 3-month preevent period as a benchmark against which yield spreads during the 

event period were compared. We also examined changes in the yield 

spread during the January 2012 debt limit event period. See appendix II 

for more details on how we estimated increased borrowing costs, 

including limitations to our using a multivariate regression to measure 

changes in Treasury’s borrowing costs attributable to delays in raising the 

debt limit. We obtained Treasury auction data for this analysis from 

Treasury. We obtained data on security yields, the Federal Reserve’s 

holdings of Treasury securities, and the Chicago Board Options 

Exchange’s Volatility Index from the Federal Reserve Bank of St. Louis’s 

Federal Reserve Economic Data (FRED) source. FRED includes original 

source data from the Federal Reserve Board, Bank of America Merrill 

Lynch, the British Bankers Association, and the Chicago Board Options 

Exchange. We also used data on Standard & Poor’s 500 total return 

index from IHS Global Insight in our analysis. To assess the reliability of 

these data, we looked for outliers and anomalies. These databases are 

commonly used by Treasury and researchers to examine the Treasury 

market and related transactions. On the basis of our assessment, we 

believe the data are sufficiently reliable for the purpose of this review.
Appendix I: Objectives, Scope, and 

Methodology

Page 30 GAO-12-701 Debt Limit

To understand how managing debt affected agency operations when 

delays in raising the debt limit occurred in 2011 and January 2012, we 

reviewed documents provided by Treasury, interviewed Treasury officials 

involved in the decision-making process and implementation of the 

extraordinary actions, and obtained estimates of the number of personnel 

and amount of time involved in managing debt during such delays. To 

assess the reasonableness of Treasury’s estimates, we reviewed e-mails, 

memos, press releases, written procedures, accounting documentation, 

and other corroborating information prepared by OFP and BPD. However, 

we did not obtain sufficient supporting documentation to independently 

verify Treasury’s staff hour estimates. We were also unable to 

independently verify the forgone opportunities that Treasury identified, 

such as less time for other cash and debt management tasks that could 

improve Treasury operations, in part because it is difficult to prove what 

would have happened in the absence of the delay in raising the debt limit.

We conducted this performance audit from May 2011 to July 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 
Appendix II: Detailed Methodology Used to 

Analyze Effect on Treasury’s Borrowing Costs

Page 31 GAO-12-701 Debt Limit

To measure changes in Treasury’s borrowing costs when delays in 

raising the debt limit occurred in 2011, we performed a multivariate 

regression analysis of the daily yield spread—yields on private securities 

minus yields on Treasury securities of comparable maturities—during the

debt limit event period.1

We used daily yield spreads during the 3-month pre-event period as a 

benchmark against which yield spreads during the event period were

compared. A decrease in the yield spread indicates that the market 

perceives the risk of Treasury securities to be closer to that of private 

securities, increasing the cost to Treasury. Conversely, an increase in the 

yield spread indicates that the market perceives the risk of Treasury 

securities to have decreased relative to that of private securities, making 

the securities less costly to Treasury. We assumed that Treasury 

Inflation-Protected Securities experienced the same yield spread changes 

as nominal securities with similar maturities and that any change in 

inflation expectations during the debt limit event should have equal effects 

on private securities and Treasury nominal securities. Our results indicate

that the 2011 debt limit event period led to a premium (which is 

represented by a decrease in the yield spread) ranging from 11 to 33

basis points on Treasury securities with maturities of 2 or more years.

For our purposes, the 2011 debt limit event 

began with the January 6, 2011, letter from the Secretary of the Treasury 

notifying the Senate Majority Leader that the debt limit needed to be 

raised and ended August 1, 2011, the business day prior to the debt limit 

increase. 

2

 

1

During the January 2012 debt limit event period, which began with the use of the first 

extraordinary action on January 4, 2012, and ended January 27, 2012, the business day 

prior to the debt limit increase, there was no consistent pattern of yield spread changes 

and the changes in borrowing costs were negligible. Accordingly, we did not perform a 

multivariate regression of the yield spread.

For 3-month and 6-month Treasury bills and cash management bills, 

which typically had a maturity of 56 days, the debt limit event period led to 

a 1 basis point decline in Treasury yields relative to private security yields

during the period (which is represented by an increase in the yield 

spread), while there was no change in yields on 1-month and 1-year 

Treasury bills relative to private security yields. Overall, Treasury yields 

2

A basis point is equal to 1/100th of 1 percent. Thus, 11 basis points is 0.11 percent. 

Appendix II: Detailed Methodology Used to 

Analyze Effect on Treasury’s Borrowing 

Costs 
Appendix II: Detailed Methodology Used to 

Analyze Effect on Treasury’s Borrowing Costs

Page 32 GAO-12-701 Debt Limit

increased relative to comparable-maturity private securities during the 

2011 debt limit event period.

3

The existing literature on the effect of the debt limit on Treasury’s 

borrowing costs is limited. Previous analysis has focused mainly on the 

effect of debt limit events on short-term Treasury interest rates. In an 

analysis we replicated and updated, Liu, Shao, and Yeager (2009)4 found 

that during debt limit events in 2001-2002 and 2002-2003, the spread 

between 3-month Treasury bill yields and 3-month commercial paper 

yields narrowed, implying that Treasury bills were relatively more costly 

during this period; however, this relationship was not observed in either 

the 2004-2005 or 2005-2006 debt limit events. The authors hypothesized 

that during these latter two debt limit events, investors may have 

assumed based on past experience that Members of Congress would 

resolve their differences before there were any serious disruptions in the 

Treasury market and therefore did not charge a premium on securities 

issued during the debt limit event. Our 2011 report replicated the authors’

analysis and also found that the 2009-2010 debt limit event coincided with 

a 4 basis point increase in 3-month Treasury bill yields.5 An earlier study 

by Nippani, Liu, and Schulman found that Treasury paid a premium on 3-

month and 6-month Treasury bills issued during the debt limit event in 

1995-1996.6

Our analysis of Treasury’s borrowing costs around past debt limit events 

focused on 3-month Treasury bills, consistent with the approach used in 

past studies. However, because uncertainty could affect all Treasury 

securities, we expanded our analysis of the 2011-2012 debt limit events 

to cover yields on longer-term securities as well. For the 2011 debt limit 

 

 

3

A test of statistical significance attempts to rule out an effect purely attributable to 

chance. The coefficient for the event was significant at the 95 percent level for all 

maturities except for 1-month and 1-year securities, which displayed no statistically 

significant change in the yield spread. A 95 percent significance level means that there is 

less than a 5 percent probability of rejecting the null hypothesis that the coefficient is zero 

when the null hypothesis is true. 

4

Pu Liu, Yingying Shao, and Timothy J. Yeager, “Did the repeated debt ceiling 

controversies embed default risk in U.S. Treasury securities?” Journal of Banking and 

Finance, vol. 33 (8) (2009): 1464-1471. 

5

GAO-11-203. 

6

Srinivas Nippani, Pu Liu, and Craig T. Schulman, “Are Treasury Securities Free of 

Default?” Journal of Financial and Quantitative Analysis, vol. 36, no. 2 (2001): 251-265. 
Appendix II: Detailed Methodology Used to 

Analyze Effect on Treasury’s Borrowing Costs

Page 33 GAO-12-701 Debt Limit

event, we estimated a regression explaining the private-Treasury yield 

spread for each maturity range using a constant term, dummy variables 

for the event and postevent periods,

7 Federal Reserve holdings of 

Treasury securities, the Chicago Board Options Exchange’s Volatility 

Index8 to capture financial market uncertainty, and the daily percentage 

change in the Standard & Poor’s 500 total return index to capture 

economic activity. 

On the basis of our analysis, we estimated that delays in raising the debt 

limit in 2011 led to an increase in Treasury’s borrowing costs of about 

$1.3 billion in fiscal year 2011.

9 We derived this estimate by multiplying 

the amount of Treasury securities issued at each maturity during the 

event period by regression-based estimates of the relevant yield spread 

change attributable to the debt limit event and weighting the result by the 

portion of fiscal year 2011 during which the security was outstanding. 

Many of the Treasury securities issued during the 2011 debt limit event 

will remain outstanding for years to come. Accordingly, the multiyear 

increase in borrowing costs arising from the event is greater than the 

additional borrowing costs during fiscal year 2011 alone. 

There are limitations to using a multivariate regression to measure 

changes in Treasury’s borrowing costs attributable to delays in raising the 

debt limit. Most important, many economic and financial developments 

besides the uncertainty in the Treasury market arising from delays in 

raising the debt limit likely affected yield spreads during this period. While 

we controlled for changes in Federal Reserve holdings of Treasury 

securities, financial market uncertainty, and economic activity, we cannot 

capture every development affecting yield spreads, such as other policy 

changes that are not easily quantifiable that might affect yield spreads.

 

7

Consistent with the approach used in past studies, the 2011 postevent period was for the 

90-day period from August 2, 2011. 

8

This variable represents the market expectations of volatility over the next 30-day period 

and is calculated by the Chicago Board Options Exchange using Standard & Poor’s 500 

stock index option bid/ask quotes. The variable is intended to control for volatility and 

uncertainty in financial markets. 

9

The 95 percent confidence interval of the borrowing cost estimate is about $1 billion to 

$1.7 billion.

Effect of Delayed Increase 

in the Debt Limit on 

Treasury’s Borrowing 

Costs 

Limitations of the Analysis
Appendix III: GAO Contacts and Staff 

Acknowledgments

Page 34 GAO-12-701 Debt Limit

Gary T. Engel, (202) 512-3406 or engelg@gao.gov

Susan J. Irving, (202) 512-6806 or irvings@gao.gov 

Thomas J. McCool, (202) 512-2642 or mccoolt@gao.gov 

In addition to the contacts named above, Richard S. Krashevski, Dawn B. 

Simpson, and Melissa A. Wolf, Assistant Directors; Carolyn M. Voltz, 

Analyst-in-Charge; Nicole X. Dow; Brian S. Harechmak; Dervla Carmen 

Harris; Thomas J. McCabe; and Shaundell A. Williams made key 

contributions to this report.

Appendix III: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 

(198703)
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