Treasury Closes SLGS Window

Tuesday, March 17, 2015

On March 13, 2015, the U.S. Treasury Department announced that it will suspend sales of state and local government series securities until further notice. The suspension is aimed at helping the Treasury manage debt subject to the federal debt ceiling, which the Treasury Department announced would happen on Sunday, March15. Suspension of SLGS sales has become a standard component of the extraordinary measures implemented by the Treasury Department over the past several years to keep the government from defaulting on its debt during partisan congressional and White House battles over increasing the debt ceiling. Beyond curtailing SLGS sales, additional extraordinary measures have included halting investments in federal employee pension funds. The SLGS window is unlikely to reopen until fall, when the federal government will exhaust its borrowing ability. Until then, governments can buy Treasuries from brokerage firms instead of using SLGS, although doing so might be more costly. The GFOA will continue to closely monitor the Treasury Department and alert members to the reopening of the SLGS window.