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Entries in Treasury Department (17)

Tuesday
Sep042012

National Debt Tops $16 Trillion, Says Treasury Department

Comstock/Thinkstock(WASHINGTON) -- The national debt has reached an all-time high of $16 trillion, according to the Treasury Department.

The new debt figures came out just hours before the three-day Democratic National Convention kicked off in Charlotte, N.C., fueling new GOP attacks against President Obama and his spending policies.

“Today’s news is another sad reminder of President Obama’s broken promise to cut the deficit in half,” said House Speaker John Boehner, R-Ohio, in a statement Tuesday. “This debt is a drain on our economy and a crushing burden on our kids and grandkids, and it’s yet another indication that the president’s policies have made things worse.”

It appears the U.S. first reached the new $16 trillion debt figure last week, on Aug. 31, according to the Daily Treasury Statement. The Treasury Department quietly posted it on its website Tuesday.

The new debt numbers work out to about $51,000 for every American, according to U.S. Census population estimates.

Out on the campaign trail in Cedar Rapids, Iowa, Rep. Paul Ryan Tuesday called the new debt figure a serious threat to jobs and the economy.

“Of all the broken promises from President Obama, this is probably the worst one because this debt is threatening jobs today,” he said. “It is threatening prosperity today, and it is guaranteeing that our children and grandchildren get a diminished future.”

The Republican National Committee was quick to seize on the debt news, going on the attack with a new online ad.

The one-minute ad shows three clips of the president speaking about the national debt, overlaid rising debt numbers.  It hits Obama for his remarks on the campaign trail in 2008, when the debt first topped $9 trillion, as well as his February 2009 announcement at a “Fiscal Responsibility Summit” that he planned to cut the deficit in half by the end of his first term.

“By his own measurement, President Obama has failed,” the ad says at the end. “Talk is cheap. Our debt isn’t.”

Republicans have made the debt a major issue this election cycle, installing two large debt clocks as centerpieces of their convention last week in Tampa, Fla.

House Majority Leader Eric Cantor said the national debt has increased more than $5 trillion during the president’s first term. He added that the president’s proposed tax on small business owners could mean 700,000 lost job opportunities.

“It’s time to address the serious fiscal challenges we face and stop spending money we don’t have,” he said in a statement Tuesday. “We cannot afford more of the same failed policies, big-government spending and massive tax hikes on hardworking families and small businesses.”

Rep. Tom Graves, R-Ga., Tuesday called the debt “untenable, irresponsible, and unsustainable.”

“Clearly, the President’s vision for America is one of debt and dependency, rather than opportunity and prosperity,” he said in a statement. “Instead of spending our way into oblivion and increasing our ever-growing debt, we must begin the process to restoring our fiscal health through growing the economy.”

Copyright 2012 ABC News Radio

Thursday
Mar082012

US Government Sells $6B in AIG Shares

STAN HONDA/AFP/Getty Images(WASHINGTON) -- The U.S. government will further cut its stake in American International Group Inc. after its bailout more than three years ago, getting back a slice of the $182 billion in taxpayer money injected into what was once the world’s largest insurer.

The Treasury Department launched a sale of AIG stock Thursday, expecting about $6 billion for almost 207 million shares at $29 a share.  AIG made losing bets on mortgage-backed securities at the height of the financial crisis, wiping out the company.

New York-based AIG is buying about $3 billion of the shares, expecting steady future profits. The company agreed to buy over 103 million shares at $29 a share, or 23 cents more than the government’s break-even price of $28.72.  The government’s move will reduce its ownership in the firm from 77 percent to about 70 percent.

“We’re continuing to move forward to wind down TARP and exit our stakes in private companies as soon as practicable,” assistant Treasury Secretary for Financial Stability, Tim Massad, said in a statement. “Today is another important step in our efforts to recover the taxpayer’s investment in AIG.”

In 2008, the government initiated a record bailout package of more than $182 billion during the financial crisis. Congress authorized the $700 billion Troubled Asset Relief Program, or TARP, in October 2008 to provide relief to AIG, banks and auto companies.

The Treasury first began selling AIG stock in May 2011, in its effort to exit from ownership of the company.

The stock offering priced on Thursday and an agreement to fully repay Treasury’s preferred equity interest on Wednesday are expected to provide at least $14.5 billion in proceeds toward repaying the taxpayers’ investment in AIG, therefore reducing the Treasury’s remaining investment in AIG to $37.8 billion.

Copyright 2012 ABC News Radio

Tuesday
Jan102012

Federal Reserve Transfers $76.9 Billion Profit to Treasury

Adam Gault/Thinkstock(WASHINGTON) -- The Federal Reserve turned $76.9 billion in profits over to the U.S. Treasury Department in 2011, The New York Times reports. Federal law requires the central bank to consign its profits to the Treasury annually.

Despite turning in $2.4 billion less than in 2010, last year's transfer far surpasses those prior to the 2010 record.  In the years leading up to the financial crisis, the Fed's average annual contribution was $23 billion.  After 2007, these contributions grew larger with the average soaring to $54 billion, according to the Times.

The Times reports nearly 97 percent of the central bank's income was made as a result of interest payments on investments, including Treasury and mortgage-backed securities.

Copyright 2012 ABC News Radio

Tuesday
Dec132011

US Suspends Production of Presidential $1 Coins

Chip Somodevilla/Getty Images(WASHINGTON) -- The Treasury Department has ordered that production of presidential dollar coins be suspended.

“Minting $1 coins that ultimately end up sitting in Federal Reserve Bank vaults – and serve no useful purpose for businesses, financial institutions and consumers – is simply not a prudent use of taxpayer resources,” Deputy Treasury Secretary Neal Wolin said.

The U.S. mint had already made coins for every president from George Washington to James Garfield: 1.4 billion of them now held in storage by the Federal Reserve.  They had planned to keep going, making coins for every dead president.  Stopping production might upset those eagerly awaiting the upcoming President Grover Cleveland dollar coin, but the Treasury Department says it will save taxpayers $50 million a year.

The coins cost 32 cents apiece to make.  Transporting them and storing them cost millions more. As ABC News reported in July, there are so many unused coins that the Federal Reserve needed to spend $650,000 building an extra vault in Texas to store them.

The Treasury Department says the decision to suspend production of the coin is part of President Obama’s effort to cut back on waste in government.

The presidential coin was introduced in 2005 by an act of Congress. The program was scheduled to continue until 2016, when, the Treasury Department estimated, there would be an inventory of 2 billion unused coins.

But don’t despair for Grover Cleveland, or any other president who has yet to appear on a dollar coin.  The U.S. Mint will begin making the coins again next year, but in much, much smaller numbers.

The next coin in the series – the President Chester Arthur $1 coin – will be released in the spring.  But the U.S. Mint will only make enough to meet the demands of collectors who pre-order the coin.

Copyright 2011 ABC News Radio

Wednesday
Oct122011

Volcker Rule Unveiled: May Slash Wall Street Bonuses

iStockphoto/Thinkstock(WASHINGTON) -- The government’s biggest financial heavyweights released a long-awaited version of the financial regulation known as the Volcker Rule, which may regulate “high-risk” trading more closely and lead to smaller Wall Street traders’ bonuses.

The Treasury Department, Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Securities Exchange Commission (SEC) on Tuesday released the 200-plus page proposal. The FDIC allows the public to comment about the rule by Jan. 13.

The proposed Volcker rule, named after former Federal Reserve chairman Paul Volcker, is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in July 2010. The rule prohibits two activities among insured depository institutions -- any bank or credit union that is federally insured and accepts deposits, and that includes traditional banks as well as Goldman Sachs, Morgan Stanley, and American Express.

First, it prohibits those financial companies from engaging in “short-term proprietary trading of any security, derivatives, and certain other financial instruments” from an entity’s own funds. Second, it “prohibits owning, sponsoring, or having certain relationships with, a hedge fund or private equity fund.”

The rule would require banks to establish an “internal compliance program” and banks with “significant trading operations” to report to federal agencies. The rule is subject to exemptions, which financial watchdogs say are not stringent enough, and banks say are too complex.

The Treasury said the rule details whether a nonbank financial company should be subject to “enhanced supervision” to prevent a future financial crisis. In the recent financial crisis, financial distress at certain nonbank financial companies contributed to, “a broad seizing up of financial markets,” according to the council.

Under the proposed rule, traders’ bonuses could see a cut if they are paid based on revenue from fees, commissions, bid/ask spreads and not the appreciation or profit from their hedged positions.

Frank Keating, president of the American Bankers Association, said he feared the “complexity” of the rule will require bank employees whose sole jobs are to comply with the rule, further inhibiting “U.S. banks’ ability to serve customers and compete internationally.”

Keating said regulators estimate banks will spend nearly 6.6 million hours to implement the rule, or which 1.8 million hours would be required every year.

“That translates into 3,292 years, or more than 3,000 bank employees whose sole job will be complying with this rule,” he said in a statement. “They will be transferred to a role that provides no customer service, generates zero revenue and does nothing for the economy."

Copyright 2011 ABC News Radio´╗┐

Wednesday
Sep142011

Solyndra Loan: Now Treasury Department Is Launching Investigation

David Paul Morris/Bloomberg via Getty Images(WASHINGTON) -- The Treasury Department's inspector general has opened a new front in the investigation of the government loan to Solyndra, the now-bankrupt company that had been touted as a model of President Obama's ambitious green energy program, ABC News and the Center for Public Integrity/iWatch News have learned.

The new probe involves the $535-million loan, arranged by the Energy Department, but actually processed by the Federal Financing Bank, a government lending institution that falls under Treasury's control. Already, the FBI and the Energy Department's inspector general have executed search warrants at Solyndra's headquarters and questioned company executives.

"We're going to look at everything the FFB had to do with its role in this thing," Rich Delmar, a spokesman for the Treasury Department's inspector general, told ABC News and iWatch News.

Word of the broadening probe came as the head of the Energy Department's loan program came before Congress at a contentious hearing on Capitol Hill Wednesday.

After spending months touting the Obama administration's decision to loan $535 million to Solyndra, top officials took a new tack Wednesday while testifying about the company's abrupt shutdown and bankruptcy: the loan, they said, was actually the Bush administration's idea.

The Energy Department's top lending officer told Congress that the Solyndra loan application was not only filed during President Bush's term, but it surged towards completion before Obama took office in January 2009.

Even after the loan was restructured in 2011, the Energy Department and other administration officials continued to tout Solyndra's prospects.

In May, Silver told ABC News and iWatch News that questions about the loan guarantee were unfounded, and that Solyndra's canceled public offering and restructuring were hiccups that are typical for startup companies.

Republicans pushed back hard against this version of events, unearthing internal Energy Department emails that indicate the panel evaluating the loans had made the unanimous decision to shelve Solyndra's application two weeks before Obama took office.

As the hearing was underway, the Department of Energy was sending out emails to the press intended to convey that Solyndra was a bipartisan problem.

"At several points in the hearing, folks have pointed out the party affiliation of the private investors who lost a billion dollars of their own private capital on this deal," wrote Dan Leistikow, the department's director of public affairs. "Of the two major investment firms who risked and lost the most, one happens to be associated with a Democratic donor and one with a Republican donor. I frankly can't understand what that has to do with anything, but I suppose it's always good to see a little bipartisanship."

But Rep. Cliff Stearns, a Florida Republican, made note during the hearing that "the administration officials held out the company as a shining example of how the stimulus was creating jobs and invigorating the economy."

Indeed, when the loan was announced in March of 2009, Energy Secretary Chu issued his own press release, identifying Solyndra as "part of President Obama's aggressive strategy to put Americans back to work and reduce our dependence on foreign oil."

Copyright 2011 ABC News Radio

Monday
Aug012011

Geithner on Debt Deal: Don't Know If We Will Avoid Downgrade

Lauren Victoria Burke/ABC NEWS(WASHINGTON) -- Is a credit rating downgrade for the United States more likely because of the way the process surrounding the debt compromise unfolded in Washington?

“I don’t know,” Treasury Secretary Timothy Geithner told ABC News in an interview set to air on Good Morning America Tuesday morning. “It’s hard to tell. I think this is a good result but a terrible process. And again…as the world watched Congress step up to the edge of the abyss it made them really wonder whether this place can work.”

Geithner called the debt deal “a good agreement” and said it benefits the economy in the “long term” because it will force Congress to make tough choices.

But what about the short term? Asked to respond to critics who say it could cost American jobs, Geithner said, “No, it will not.”

Will it create jobs for some of the 25 million Americans looking for work?  

“No, this agreement itself, on its own, doesn’t create jobs,” he said. “What it does is it avoids doing more damage in the short term, because the president refused to accept the types of deep spending cuts that many in Congress wanted, and it -- by locking in some long term savings it raises -- it improves the odds over time.”

Copyright 2011 ABC News Radio

Wednesday
Jul132011

Paper Savings Bonds to Become Obsolete by 2012

Comstock/Thinkstock(WASHINGTON) --  They've been available at banks and credit unions for 76 years -- you may have even gotten one in a birthday card as a kid.  But now, paper Savings Bonds are on their way to becoming obsolete.

The U.S. Treasury Department is expected to announce on Wednesday that the documents will no longer be available for sale at banks and credit unions come next year, reports USA Today.

Instead, after Dec. 31, those looking to purchase a Savings Bond will be able to do so online for at least $25.

The hope is that the shift to electronic documents will help save the government money.

Copyright 2011 ABC News Radio

Thursday
Jun302011

Is Geithner Contemplating an Exit as Treasury Secretary?

Darren McCollester/Getty Images(WASHINGTON) -- Treasury Secretary Tim Geithner is contemplating leaving his position after the deficit negotiations have been successfully completed, sources tell ABC News, but it’s too early and there are far too many caveats to say that will definitely happen.

Geithner thinks there might be a window for him to leave if the deficit and debt ceiling talks come to a successful conclusion, the economy continues to improve and President Obama approves of his departure, according to sources, who requested anonymity to speak freely.

But those are a lot of “ifs,” and while Geithner is the last man standing from the president’s original top economic advisers, sources say any definitive reporting that he has told the White House he is on his way out the door is premature.

Bloomberg News reported first that Geithner could be eyeing the door.

Copyright 2011 ABC News Radio

Wednesday
Jun152011

Over $16 Billion Exist in Unredeemed Treasury Bonds

Creatas/Thinkstock(WASHINGTON) -- The U.S. Treasury's Bureau of the Public Debt is holding 44.7 million matured, unredeemed savings bonds worth $16.3 billion -- and one of them could belong to your family.

"Matured" means they have finished earning interest and "unredeemed" means the owners haven't cashed them in.  When you consider that savings bonds take 20 to 40 years to mature, it's easy to see how people could forget about them.

The good news is that in 2000, the Treasury Department started its "Treasury Hunt" website, where you can search for savings bonds in your family's name.  All you do is enter a social security number and the site returns results instantly.

And it's worth checking -- the average successful search turns up bonds worth about $1,000.

Every month, the Treasury Department adds another half million bonds to the database as they mature, so check back periodically if your intial search comes up empty.

Copyright 2011 ABC News Radio







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