Treasury General Account
{{Short description|US federal government cash account}}
{{Use dmy dates|date=February 2024}}
The Treasury General Account (TGA) is an account maintained by the United States Department of the Treasury at the Federal Reserve.{{cite journal |title=The Evolution of Treasury Cash Management during the Financial Crisis |first=Paul J. |last=Santoro |journal=Current Issues in Economics and Finance |volume=18 |number=3 |year=2012 |publisher=Federal Reserve Bank of New York |url=https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci18-3.pdf |access-date=February 3, 2024 |archive-date=February 25, 2024 |archive-url=https://web.archive.org/web/20240225011522/https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci18-3.pdf |url-status=live }} It receives tax payments and proceeds from the auction of Treasury securities, and disburses government payments to individuals and businesses.{{cite web |title=U.S. Treasury's cash drawdown - and why markets care |first=Sujata |last=Rao |date=February 22, 2021 |work=Reuters |url=https://www.reuters.com/article/idUSKBN2AM269/ |access-date=February 3, 2024}} Aside from its cash flow duties, it is also held to protect the Treasury from running out of money if Congress delays raising the debt ceiling.{{cite news |title=The Federal Reserve Should 'Put America First' |first=Matthew C. |last=Klein |date=March 29, 2019 |work=Barron's |url=https://www.barrons.com/articles/the-federal-reserve-should-put-america-first-51553874768 |access-date=February 3, 2024 |archive-date=February 3, 2024 |archive-url=https://web.archive.org/web/20240203220942/https://www.barrons.com/articles/the-federal-reserve-should-put-america-first-51553874768 |url-status=live }} The TGA is often described as the government's "checking account".{{cite news |title=Treasury's Record Cash Pile Is Jerome Powell's $700 Billion Headache |first1=Liz |last1=Capo McCormick |first2=Alex |last2=Harris |date=June 12, 2020 |work=Bloomberg |url=https://www.bloomberg.com/news/articles/2020-06-12/treasury-s-record-cash-pile-is-powell-s-700-billion-headache |access-date=February 3, 2024 |archive-date=May 8, 2021 |archive-url=https://web.archive.org/web/20210508000107/https://www.bloomberg.com/news/articles/2020-06-12/treasury-s-record-cash-pile-is-powell-s-700-billion-headache |url-status=live }}{{cite news |title=Yellen Shift on Vast Treasury Cash Pile Poses Problem for Powell |first1=Rich |last1=Miller |first2=Liz |last2=Capo McCormick |date=February 16, 2021 |work=Bloomberg |url=https://www.bloomberg.com/news/articles/2021-02-16/yellen-shift-on-vast-treasury-cash-pile-poses-problem-for-powell |access-date=February 3, 2024}}{{cite news |title=Wall Street Buys More T-Bills, Parks Less at Fed |first=Eric |last=Wallerstein |date=June 20, 2023 |work=The Wall Street Journal |url=https://www.wsj.com/articles/wall-street-buys-more-t-bills-parks-less-at-fed-304cf41e |access-date=February 3, 2024 |archive-date=January 29, 2024 |archive-url=https://web.archive.org/web/20240129155715/https://www.wsj.com/articles/wall-street-buys-more-t-bills-parks-less-at-fed-304cf41e |url-status=live }} {{As of|2025|01|03}}, the balance of the account is {{Usd|677 billion}}.{{cite web |title=Daily Treasury Statement |publisher=US Department of the Treasury |url=https://fiscaldata.treasury.gov/datasets/daily-treasury-statement/operating-cash-balance |access-date=January 7, 2025 |archive-date=February 3, 2024 |archive-url=https://web.archive.org/web/20240203212617/https://fiscaldata.treasury.gov/datasets/daily-treasury-statement/operating-cash-balance |url-status=live }}
History
Because funds in the TGA count as reserves in the central banking system, under the Fed's former limited-reserves regime the balance of the TGA was kept low so as not to influence the federal funds rate. The target balance was {{Usd|5 billion}}; the rest of the government's cash balance was kept at private depository institutions in the Treasury Tax and Loan Note (TT&L) program. Funds were transferred to and from the TT&L accounts daily to meet the TGA target.
Starting after the 2008 financial crisis, the Treasury began keeping almost all of its cash balance in the TGA, as quantitative easing greatly increased the amount of reserves, so a large TGA balance would no longer have an outsized effect on the system. Also, interest on excess reserves was an economic incentive to keep money in the TGA.
The balance of the TGA increased to {{Usd|1.6 trillion}} in 2021 as a result of increased government borrowing during the COVID-19 pandemic. During the 2023 debt-ceiling crisis, the account's balance fell as low as {{Usd|50 billion}}, compared to a target of {{Usd|600 billion}}.{{cite news |title=Treasury's $1 Trillion Debt Deluge Threatens Market Calm | first=Eric | last=Wallerstein |date=June 7, 2023 |work=The Wall Street Journal | url=https://www.wsj.com/articles/treasurys-1-trillion-debt-deluge-threatens-market-calm-f2173ef4 |access-date=February 3, 2024 | archive-date=February 3, 2024 |archive-url=https://web.archive.org/web/20240203215404/https://www.wsj.com/articles/treasurys-1-trillion-debt-deluge-threatens-market-calm-f2173ef4 |url-status=live }}
References
{{reflist}}
Further reading
- {{cite web |title=Modern Money Theory and interrelations between the treasury and the central bank: The case of the United States |last=Tymoigne |first=Éric |year=2014 |publisher=Levy Economics Institute of Bard College |url=https://www.econstor.eu/handle/10419/110026 }}
External links
- [https://fred.stlouisfed.org/series/D2WLTGAL Historical balance of the account] from FRED