Stimulus.org - Government and GSEs

Supplemental Financing for IMF

Jason Peuquet — Thu, 01 Oct 2009 19:25:18 +0000

Date:

June 24, 2009

Who:

Treasury

Policy Area:

Monetary Policy

Economic Target:

Government and GSEs

Action Type:

Loans

Maximum Amount:

75000000000

Amount Spent:

75000000000

Deficit Impact:

4973000000

As part of the Supplemental Appropriations Act (H.R. 2346), signed into law on 6/24/2009, Congress and the President agreed to add $75 billion in Special Drawing Rights (SDRs) at the International Monetary Fund. The funds will remain "available until expended" to buffer the IMF's reserves.

Source:

Text of Supplemental Appropriations Act of 2009

Notes:

Deficit impact of $75 billion increase in SDRs is estimated to cost the U.S. government $4.973 billion.

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Purchase of Freddie Mortgage-Backed Securities

Jason Peuquet — Tue, 18 Aug 2009 18:01:29 +0000

Treasury Purchases of GSE Mortgage-Backed Securities

Date:

September 7, 2008

Who:

Treasury

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Government and GSEs

Action Type:

Equity Purchase

Amount Spent:

105900000000

Deficit Impact:

Program allows the Treasury Department to purchase government sponsored enterprise (GSE) mortgage-backed securities in the open market.

Source:

FHFA Release 8/6/09

Most Recent FHFA Report on Treasury and Federal Reserve Purchase Programs

Notes:

Maximum purchases of mortgage-backed securities are unlimited. Figure for amount spent is current as of 3/2/2010 (http://www.fhfa.gov/Default.aspx?Page=70). Since the purchase of Freddie Mac mortgage-backed securities from the general fund of the Treasury constitutes an intergovernmental transfer, the deficit impact is zero.

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Purchase of Freddie Mac Preferred Stock

suggp — Fri, 14 Aug 2009 19:04:37 +0000

Who:

FHFA

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Government and GSEs

Action Type:

Equity Purchase

Maximum Amount:

100000000000

Maximum Amount Special Symbol:

Amount Spent:

63700000000

Deficit Impact:

As part of conservatorship, the Treasury agreed to purchase up to $100 billion in stock from each GSE ($200 billion total) including an immediate receipt of $1 billion in senior preferred stock from each GSE as well as warrants to purchase 79.9% of each GSE's common stock. On 2/13/2009, the Treasury Department increased the maximum amount of GSE stock they would agree to purchase by $100 billion each, bringing the total to $400 billion. At the time, they estimated that, in total, they would be required to purchase $50 billion from Freddie Mac and $16 billion from Fannie Mae.

In a release on December 24, 2009, the Treasury announced that it has terminated the $200 million cap on purchases on Fannie Mae and Freddie Mac preferred stocks, stating thatsuch steps "are necessary for preserving the continued strength and stability of the mortgage market."

Source:

Bloomberg News Article 8/7/2009

Treasury Release 12/24/2009

Notes:

Since the purchase of Freddie Mac preferred stock by FHFA constituted an intergovernmental transfer of stock from a GSE to a federal agency, the deficit impact is zero. Amount spent as of 2/25/2011 (http://www.fhfa.gov/Default.aspx?Page=70).

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Purchase of Fannie Mae Preferred Stock

suggp — Tue, 11 Aug 2009 01:33:02 +0000

Date:

September 7, 2008

Who:

FHFA

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Government and GSEs

Action Type:

Equity Purchase

Maximum Amount:

100000000000

Maximum Amount Special Symbol:

Amount Spent:

98700000000

Deficit Impact:

As part of conservatorship, the Treasury agreed to purchase up to $100 billion in stock from each GSE ($200 billion total) including an immediate receipt of $1 billion in senior preferred stock from each GSE as well as warrants to purchase 79.9% of each GSE's common stock. On 2/13/2009, the Treasury Department increased the maximum amount of GSE stock they would agree to purchase by $100 billion each, bringing the total to $400 billion. They estimated that, in total, they would be required to purchase $50 billion from Freddie Mac and $16 billion from Fannie Mae.

In a release on December 24, 2009, the Treasury announced that it has terminated the $200 million cap on purchases on Fannie Mae and Freddie Mac preferred stocks, stating that such steps "are necessary for preserving the continued strength and stability of the mortgage market."

Source:

Treasury/ FHFA Sept. 7 Announcement

Treasury Feb. 18 Statement

Wire Story 8/6/2009

Treasury Release 12/24/2009

Notes:

Since the purchase of Fannie Mae preferred stock by FHFA constituted an intergovernmental transfer of stock from a GSE to a federal agency, the deficit impact is zero. Amount spent as of 5/9/2011 (http://www.fhfa.gov/Default.aspx?Page=70).

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Purchase of Fannie Mortgage-Backed Securities

Maya MacGuineas — Fri, 10 Jul 2009 20:03:23 +0000

Treasury Purchases of GSE Mortgage-Backed Securities

Date:

September 7, 2008

Who:

Treasury

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Government and GSEs

Action Type:

Equity Purchase

Maximum Amount Special Symbol:

Amount Spent:

114800000000

Deficit Impact:

Program allows the Treasury Department to purchase government sponsored enterprise (GSE) mortgage-backed securities in the open market.

Source:

FHFA Release 8/6/09

Most Recent FHFA Report on Treasury and Federal Reserve Purchase Programs

Notes:

Maximum purchases of mortgage-backed securities are unlimited. Figure for amount spent is current as of 3/2/2010 (http://www.fhfa.gov/Default.aspx?Page=70). Since the purchase of Fannie Mae mortgage-backed securities from the general fund of the Treasury constitutes an intergovernmental transfer, the deficit impact is zero.

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Conservatorship of Fannie/Freddie

Maya MacGuineas — Fri, 10 Jul 2009 19:59:50 +0000

Date:

September 7, 2008

Who:

FHFA

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Government and GSEs

Action Type:

Government Conservatorship

Maximum Amount:

Amount Spent:

Deficit Impact:

389000000000

Placement of Fannie Mae and Freddie Mac into government conservatorship by the Federal Housing Finance Agency, until the institutions are deemed to have been stabilized. Conservatorship was coupled with other actions to ensure liquidity.

CBO estimates that $291 billion in federal outlays went towards the conservatorship of Fannie and Freddie in 2009, with a projected $98 billion in subsidies over the next 10 years.

As part of conservatorship, the Treasury agreed to purchase up to $100 billion in stock from each GSE ($200 billion total) including an immediate receipt of $1 billion in senior preferred stock from each GSE as well as warrants to purchase 79.9% of each GSE's common stock. On 2/13/2009, the Treasury Department increased the maximum amount of GSE stock they would agree to purchase by $100 billion each, bringing the total to $400 billion. They estimated that, in total, they would be required to purchase $50 billion from Freddie Mac and $16 billion from Fannie Mae.

Source:

Treasury/ FHFA Sept. 7 Announcement Treasury/ FHFA Sept. 7 Announcement

Treasury Feb. 18 Statement

CBO Report on Bugetary Treatment on Fannie and Freddie, January 2010

Notes:

Deficit impact represents CBO's estimate of the cost of bringing Fannie Mae and Freddie Mac "on-budget" for 2009-2019 (per CBO's proposed budgetary treatment) calculated by assessing the risk-adjusted net present value of Fannie Mae's and Freddie Mac's current net liabilities, plus their subsidy costs for 2009. (http://www.cbo.gov/ftpdocs/108xx/doc10878/01-13-FannieFreddie.pdf).

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Purchase of Fannie/Freddie Discount Notes

Maya MacGuineas — Fri, 10 Jul 2009 19:38:29 +0000

Fed Purchases of GSE Discount Notes

Date:

September 19, 2008

Policy Area:

Financial Sector Policy

Economic Target:

Government and GSEs

Action Type:

Equity Purchase

Maximum Amount Special Symbol:

Amount Spent:

57501000000

Purchase of short-term debt obligations of Fannie Mae, Freddie Mac and Federal Home Loan. Banks from primary dealers.

Source:

Federal Reserve Sep. 19th Release

Federal Reserve Balance Sheet

Notes:

Maximum amount limited only by total GSE debt obligations. Amount spent is purchases reported on the Fed balance sheet as of 3/30/2010. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.

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Purchase of Fannie/Freddie Debt

Maya MacGuineas — Fri, 10 Jul 2009 19:24:34 +0000

Purchase of Fannie / Freddie Debt

Date:

November 25, 2008

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Government and GSEs

Action Type:

Equity Purchase

Maximum Amount:

200000000000

Amount Spent:

75111000000

The Federal Reserve originally announced that it would purchase up to $100 billion in debt from Fannie Mae, Freddie Mac, and Federal Home Loan Bank, and up to and $500 billion in mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae. On March 18, 2009, the Federal Reserve raised its intended purchases of agency debt (Fannie, Freddie, Federal Home Loan Bank) to $200 billion (a $100 billion increase) and its intended purchases of agency mortgage-backed securities to $1.25 trillion (a $750 billion increase).

In a statement from the FOMC on 9/23/2009, the Fed will "gradually slow the pace" of its purchases of agency debt in order to promote a smooth market transition. In addition, the FOMC stated that such purchases should expire by the end of Q1 2010.

Source:

Federal Reserve 3/18/2009 Release

Federal Reserve 11/25/2008 Release

Notes:

Amount spent indicates holdings of agency debt and mortgage backed securities as of 1/16/2013. See http://www.federalreserve.gov/releases/h41/Current/. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.

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Purchase of Long-Term Treasury Bonds

Maya MacGuineas — Fri, 10 Jul 2009 19:22:13 +0000

Purchase of Long-Term Treasury Securities

Date:

March 18, 2009

Policy Area:

Monetary Policy

Economic Target:

Government and GSEs

Action Type:

Other

Amount Spent:

1327687000000

On 3/19/2009 The Federal Open Market Committee announced that the Fed would purchase up to $300 billion in "longer term" Treasury securities. This would have the effect of driving down interest rates on these securities and various types of loans.

This action was taken in conjunction with the Fed's decision to increase its purchase of federal agency debt and mortgage-backed securites.

On 8/10/2010, the FOMC announced that it would take the proceeds from maturing agency debt and mortgage-backed securities and invest them in long-term Treasury bonds. The move would keep the balance sheet constant, rather than having it shrink as previously expected.

On 11/3/2010, the FOMC announced that it would make an additional purchase of $600 billion in longer-term Treasury securities, on top of the commitment made back in August. The two moves combined would result in the purchase of about $900 billion by the end of the second quarter of 2011.

Source:

Federal Reserve Open Market Committee Announcement 3/18/2009

Notes:

Maximum amount is currently unknown. Amount spent as of 1/23/2013 (http://www.clevelandfed.org/research/data/credit_easing/index.cfm). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.

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Supplemental Financing Program to Federal Reserve

suggp — Fri, 10 Jul 2009 18:37:13 +0000

Supplemental Financing Program

Date:

September 17, 2008

Who:

Treasury

Policy Area:

Monetary Policy

Economic Target:

Government and GSEs

Action Type:

Other

Maximum Amount Special Symbol:

Amount Spent:

5000000000

At the request of the Federal Reserve, The Treasury will market a separate, new line of Treasury bills (short term securities) to help fund the Federal Reserve's actions taken in response to the economic and financial crisis.

In a release on 2/23/2010, the Treasury announced that the Treasury will increase the balance of the program from the current $5 billion to $200 billion, a level maintained between February and September 2009.

Source:

Monthly Treasury Statement for March 2009

Treasury Release 2/23/2010

Treasury Release 9/17/2008

Notes:

Maximum amount is unlimited. Amount spent reflects value of bills outstanding as of 2/17/2010. Deficit impact unknown.

Is not a top-level node