WASHINGTON — The federal government says it will temporarily suspend sales of U.S. Treasury securities to state and local governments at noon on Friday, the first step to avoid breaching the nation's borrowing limit.
The move announced Wednesday by Treasury officials is expected to be followed by other bookkeeping maneuvers, all of which have the same goal: To keep the government functioning until Congress decides whether to raise the $16.39 trillion borrowing limit.
Earlier this year, Congress temporarily suspended the borrowing limit so lawmakers could focus on other budget debates. But that suspension ends this weekend. The Treasury Department can keep the government operating for several months through its maneuvers.
The government is spending more than it takes in, running up annual deficits in excess of $1 trillion in each of the past four budget years. It has been borrowing the difference to meet its obligations.
Republicans want to reduce future deficits by cutting back sharply on spending. Democrats have proposed a mix of spending cuts and tax increases, which Republicans strongly oppose.
Officials have a little more time to make a decision about the borrowing limit because the government is taking in more money this year. Higher revenues have reduced this year's federal budget deficit. The latest projection from the Congressional Budget Office pegs this year's annual deficit at $643 billion, down from $1.1 trillion last year. That means a deal on the borrowing limit may not be reached until the fall.