WASHINGTON — If Congress does not pass legislation boosting the federal debt limit by the end of the year, the Treasury Department could be forced to close its window for state and local government series securities, which municipal issuers purchase for refunding escrows to avoid earning arbitrage, market sources said yesterday.

Treasury officials contend the government is likely to bump up against the current debt limit of $12.1 trillion before the end of the year. The federal government had $12.079 trillion of public debt outstanding as of Dec. 9, according to a spokesperson at the Treasury’s Bureau of Public Debt.

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