Beginning Friday, the Treasury Department will suspend the sales of State and Local Government Series Securities until further notice, the first maneuver to avoid hitting the federal debt ceiling.
“This suspension is necessary by reason of the statutory debt ceiling,” the Treasury said in a release. “The suspension will assist Treasury’s management of the debt subject to limit.”
The suspension of the $16.4 trillion debt ceiling expires on May 18, but Treasury Secretary Jacob Lew has said the federal government will be able to avoid hitting the limit until September by taking steps like this.
Subscriptions for SLGS received by the Bureau of Public Debt prior to noon on Friday, May 17 will be issued on the date requested. However, new subscriptions for SLGS will not be accepted during the suspension, the Treasury said.
The SLGS program began in 1972 to help state and local government entities comply with Internal Revenue Service arbitrage regulations. It has been closed nine times in the past 20 years.