1: Financing
Effectively finance government operations. Other Information:
The effective financing of government operations includes a number of elements. First, it involves borrowing what is necessary
to meet the funding needs of the federal government. Additionally, it focuses on minimizing borrowing costs. A third element
entails providing mechanisms to allow for a wide range of investors to purchase Treasury securities.
Stakeholder(s):
- Wholesale Securities Services Program: In support of our strategic goal to effectively finance government operations, our strategies for the Wholesale Securities
Services program are: • Guarantee operational readiness to meet the federal government's critical financing needs. • Protect
and strengthen Treasury's borrowing capabilities. • Preserve confidence in Treasury auctions through compliance. • Educate
and build relationships with our large investors. • Enhance government securities regulations.
- Government Agency Investment Services Program: The Government Agency Investment Services program includes the offering of specialized investments for government entities
at the federal, state, and local levels, as well as borrowings by federal agencies. Because these investments and borrowings
are based on a broad array of statutes and serve a diverse customer base, our challenge is to ensure that we meet both statutory
requirements and customer needs, while providing the most efficient operations possible. This program has three distinct components.
In support of our strategic goal to effectively finance government operations, our strategies for the Government Agency Investment
Services program are: • Strengthen and streamline controls for Government Agency Investment Services. • Enable government
agency customers to more effectively manage their investments.
- Federal Investments Component: This component includes issuing, servicing, and redeeming Government Account Series securities for federal agencies that have
specific statutory authority to invest in these special, nonmarketable Treasury securities. More than 230 federal funds are
invested in Government Account Series securities totaling approximately $4 trillion, or nearly half of the public debt. The
Secretary of the Treasury has been designated by statute as the managing trustee for 18 significant trust funds, including
the Social Security and Unemployment trust funds. For these funds, we perform additional services, such as accounting and
reporting on all receipts and disbursements.
- Special Purpose Securities Component: In this component, we administer a variety of special purpose securities, including some issued by other federal agencies
for which we serve as fiscal agent. Treasury's State and Local Government Series securities represent the largest portion
of principal outstanding. These securities offer a flexible investment alternative for state and local governments to refinance
their outstanding, tax-exempt debt. We issue, service, and redeem these securities. There are about 6,900 government entities
that hold investments in these securities, amounting to approximately $290 billion.
- Federal Borrowings Component: This is a unique element of the Government Agency Investment Services program in that its purpose is to loan funds to federal
agencies. We act on Treasury's behalf to make these direct loans and loan guarantees to federal agencies operating loan programs
to support, for example, education, housing, veterans, and small businesses. Our responsibilities include ensuring that all
principal and interest amounts are accounted for appropriately, reported timely, and presented accurately. There are approximately
80 funds administered by various federal agencies whose outstanding borrowings total, on average, $224 billion annually.
- Retail Securities Services Program: The Retail Securities Services program serves more than 55 million investors in Treasury securities, most of whom are individuals.
We want to make it as easy as possible for investors to learn about our products and services, make informed decisions about
buying Treasury securities, and manage their Treasury investments efficiently. This program encompasses the issuance, servicing,
and redemption of U.S. Savings Bonds in both electronic and paper form, as well as marketable Treasury securities sold in
electronic form directly to retail investors. It also includes the servicing and redemption of outstanding marketable securities
that were issued in paper form. Operationally, this program has four distinct elements. In support of our strategic goal to
effectively finance government operations, our strategies for the Retail Securities Services program are: • Position Treasury
to eliminate new issues of paper savings bonds. • Replace the Legacy Treasury Direct system. • Improve the quality and efficiency
of service to retail customers. • Encourage redemption of outstanding, matured Treasury securities.
- TreasuryDirect® Element: The centerpiece of Retail's strategic direction is this self-service, Internet-accessed system. Customers establish their
TreasuryDirect accounts, purchase electronic securities, direct electronic payments to their bank accounts, and manage their
holdings online, at their convenience, and in a secure environment. Owners of paper savings bonds can convert their bonds
to electronic form to hold in TreasuryDirect. Launched in 2002, TreasuryDirect initially offered electronic savings bonds
and was later expanded to include marketable Treasury securities for individuals. More than 270,000 accounts hold over $8
billion.
- Paper Savings Bonds Element: This element includes all Public Debt, Federal Reserve, and other agent activity to issue, service, and redeem paper savings
bonds. Some 55 million people hold almost 700 million paper savings bonds worth more than $190 billion.
- Legacy Treasury Direct Element: Introduced in 1986 when Treasury began issuing marketable securities exclusively in electronic form, this program element
encompasses all Public Debt and Federal Reserve activity to establish and service book-entry accounts for marketable securities
in Legacy Treasury Direct. Customers hold more than $67 billion in 348,000 accounts.
- Paper Marketable Securities Element: Although Treasury stopped issuing marketable securities in paper form in 1986, we still service outstanding obligations. The
last issue of these definitive securities will mature in 2016. By FY 2009, there will be less than $40 million outstanding
in certificates not yet eligible for redemption.
Objective(s):
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