WASHINGTON (AP) - The federal government says it will temporarily suspend sales of U.S. Treasury securities to state and local governments starting at noon on Friday, its first step to avoid breaching the nation's borrowing limit this year.
The move announced Tuesday by Treasury officials will be followed by other bookkeeping maneuvers which have the goal of keeping the government functioning until Congress decides to raise the borrowing limit.
Last October, the government temporarily suspended the borrowing limit, but that ends this Friday. Treasury can keep the government operating for a few weeks but Treasury Secretary Jacob Lew has warned that he has less maneuvering room than he did last year.
The suspension of sales of Treasury securities to state and local governments will affect their ability to manage their investment holdings.