FOR IMMEDIATE RELEASE, CONTACT: (202) 225-1721
September 22, 1999
FC-13
Congressman Bill Archer (R-TX), Chairman of the Committee on Ways and Means, today announced that the Committee will hold a hearing on U.S. Department of the Treasury's debt buyback proposal. The hearing will take place on Wednesday, September 29, 1999, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from invited witnesses only. Witnesses will include representatives of the U.S. Department of the Treasury, the U.S. General Accounting Office, the Federal Reserve and other experts in debt management. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
Article I, Section 8 of the Constitution gives Congress the power "to borrow money on the credit of the United States." Congress has, therefore, historically been concerned about the level of public debt and the cost to the taxpayer. Originally, Congress approved each Government debt issue. In more recent times, through the statutory limit on the public debt (31 U.S.C. 3101) specified levels of overall debt were authorized, and adjusted when necessary. Congressional oversight of Treasury's debt management policies is essential to ensure the lowest cost of borrowing to the taxpayer given the large scope of public borrowings.
The Congressional Budget Office and the Office of Management and Budget have both forecast sizeable budget surpluses over the next 15 years. Fiscal year 1998 surpluses already have reduced the Government's borrowing needs, causing Treasury to adjust its debt management policies. Last year, Treasury suspended auctions of 3-year notes and reduced the frequency of 5-year note sales.
As large surpluses continue to reduce the Government's borrowing needs, Treasury must consider how its policies will affect taxpayer costs and capital market efficiency. Consequently, Treasury is exploring new debt management policies. On August 4, 1999, Treasury announced regulations (31 CFR Part 375) to allow Treasury to buy back outstanding debt before it matures. In essence, Treasury would buy back old debt and reissue new debt in its place. Such a policy would not reduce the level of debt, but it may help Treasury achieve other goals, such as improving liquidity and achieving targeted cash balances. A debt buyback program would increase short-term costs, but should generate long-term budgetary savings.
In announcing the hearing, Chairman Archer stated: "With large and growing budget surpluses projected over the next 15 years, we have an historic opportunity to reduce our national debt. As the Administration explores adjustments to its debt management policies, including a new proposal to buy back outstanding debt, the Congress needs to remain engaged in decisions regarding the level of debt and its cost to the taxpayer, as well as the growing debate concerning the efficiency of global and domestic capital markets. Our goal should be to reduce significantly the national debt at the least cost to the taxpayer."
FOCUS OF THE HEARING:
This hearing explores the potential costs and benefits of Treasury's debt buyback proposal and the effect such a proposal would have on the budget. In addition, the hearing will examine Treasury's debt management goals and the policy issues posed by growing surpluses. Finally, the hearing will review the economic and budgetary effects of Treasury's debt management policies.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement for the printed record of the hearing should submit six (6) single-spaced copies of their statement, along with an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, with their name, address, and hearing date noted on a label, by the close of business, Wednesday, October 13, 1999, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, Room 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Committee office, Room 1102 Longworth House Office Building, by close of business the day before the hearing.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All statements and any accompanying exhibits for printing must be submitted on an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.
The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press, and the public during the course of a public hearing may be submitted in other forms.
The
Committee seeks to make its facilities accessible to persons with
disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.