GAO Glossary of Terms and Definitions (September 2005)

Debt, Federal

Generally, the amount borrowed by the government from the public or from government accounts. Four ways that federal debt may be categorized for reporting purposes are (1) gross federal debt, (2) debt held by the public, (3) debt held by government accounts, and (4) debt subject to statutory debt limit. For a fuller discussion of federal debt, see Federal Debt: Answers to Frequently Asked Questions. An Update (GAO-04-485SP). (See also Borrowing Authority under Forms of Budget Authority under Budget Authority; Federal Financing Bank; Means of Financing.)

Buyback

In the context of federal debt, the Department of the Treasury’s purchases of marketable Treasury securities from the public prior to their maturity through competitive redemption processes (as opposed to redemptions prior to maturity under call provisions) are often referred to as “debt buybacks.” The budget records buyback premiums and discounts as means of financing a surplus or deficit, rather than as outlays or offsetting collections or receipts. The buyback premium or discount is the difference between the reacquisition price of a security and its book value. (See also Means of Financing.)

Debt Held by Government Accounts (Intragovernmental Debt)

Federal debt owed by the federal government to itself. Most of this debt is held by trust funds, such as Social Security and Medicare. The Office of Management and Budget (OMB) contrasts it to debt held by the public by noting that it is not a current transaction of the government with the public; it is not financed by private saving and thus does not compete with the private sector for available funds in the credit market; and it does not represent an obligation to make payments to the public.

Debt Held by the Public

That portion of the gross federal debt held outside of the federal government. This includes any federal debt held by individuals, corporations, state or local governments, the Federal Reserve System, and foreign governments and central banks. Debt held by government accounts (intragovernmental debt) is excluded from debt held by the public. Debt held by the public is not the same as public debt or Treasury debt.

Debt Subject to Statutory Debt Limit

Debt guaranteed as to principal and interest by the United States.

As defined by section 3101 of title 31 of the United States Code, the debt subject to the statutory debt limit includes debt issued under chapter 31 of that title. This includes Treasury debt except the securities issued by the Federal Financing Bank (FFB) under authority of section 9(a) of the Federal Financing Bank Act of 1973 (12 U.S.C. § 2888(a)) upon which there is a separate limit of $15 billion, and a small amount of agency debt. Agency debt that by law is not guaranteed as to principal and interest by the United States—for example, the Tennessee Valley Authority (TVA) (under authority of section 15d of the TVA Act of 1933, 16 U.S.C. § 831n-4) and the United States Postal Service (under authority of 39 U.S.C. § 2005(a))—is not subject to the ceiling imposed by section 3101, but is usually subject to its own ceiling.

Gross Federal Debt

The total amount of federal government debt comprising debt securities issued by the Department of the Treasury (including securities issued by the Federal Financing Bank (FFB) under section 9(a) of the Federal Financing Bank Act of 1973 (12 U.S.C. § 2888(a)) and other government agencies. Gross federal debt is the sum of debt held by the public and debt held by government accounts (intragovernmental debt).

Treasury Debt/Public Debt. That portion of the gross federal debt issued by the Department of the Treasury to the public or to government accounts (including securities issued by the Federal Financing Bank (FFB) under section 9(a) of the Federal Financing Bank Act of 1973 (12 U.S.C. § 2888(a)). (See also Debt Held by Government Accounts under Debt, Federal.)

Agency Debt. That portion of the gross federal debt incurred when a federal agency other than the Department of the Treasury (Treasury) is authorized by law to issue debt securities directly to the public or to another government account. While an agency may have authority to borrow directly from the public, agencies usually borrow from Treasury’s Federal Financing Bank (FFB). Since Treasury borrowing required to obtain the money to lend to the agency through FFB is already part of the gross federal debt, to avoid double counting, agency borrowing from FFB is not included in the gross federal debt. In addition, federal fund advances from Treasury to trust funds are not included in the gross federal debt to avoid double counting.

Debt of government-sponsored, privately owned enterprises, such as the Federal National Mortgage Association, is not included in the federal debt.

Statutory Debt Limit

The ceiling on the amount of most Treasury and agency debt established by section 3101 of title 31 of the United States Code, sometimes referred to as the public debt ceiling or the public debt limit.

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