US Treasury takes step to avoid hitting debt limit

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Associated Press

Posted on May 15, 2013 at 3:02 PM

Updated Wednesday, May 15 at 3:03 PM

WASHINGTON (AP) — The 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 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.

Congress temporarily suspended the borrowing limit earlier this year but that suspension ends this weekend. The Treasury Department can keep the government operating for several months through its maneuvers.

Officials also have more time to make a decision about the borrowing limit because higher revenues have reduced this year's federal budget deficit. A deal may not be reached until fall.

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