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Japan Earthquake

How Treasury Could Prevent Hitting the Debt Ceiling

A temporary suspension of the U.S. debt ceiling expires on May 19, but the Treasury Department should be able to borrow for several more months by employing unusual cash management tools.The department believes these tools and surprisingly strong government revenues should allow it to keep paying the nation's bills into September, staving off for a time the specter of a potentially devastating debt default.Indeed, many private forecaster now believe the debt limit will not become binding until some time in October, in part due to sizable bailout payments from mortgage finance firms Fannie Mae and Freddie Mac. The cash infusion will provide the government more room to operate. The Treasury is likely to start taking steps that will hold off default in the coming days.Following are some of the measures the Treasury has employed in the past and will likely use this time around to free up borrowing capacity once the temporary suspension of the U.S. debt limit expires.SUSPEND STATE, LOCAL GO...

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