2012   Financial Report of the United States Government

Notes to the Financial Statements

Note 28. Subsequent Events

Statutory Debt Limit

As of September 30, 2012, debt subject to the statutory debt limit was $16,027.0 billion, as stated in Note 14—Federal Debt Securities Held by the Public and Accrued Interest. As of September 30, 2012, and the issuance date of this Financial Report, the statutory debt limit was $16,394.0 billion per Public Law 112-25. On December 26, 2012, the Secretary of the Treasury notified the Congress that the statutory debt limit would be reached on December 31, 2012. On December 31, 2012, Treasury began to depart from its normal debt management procedures and invoke legal authorities to avoid exceeding the statutory debt limit. As of the issuance date of this Financial Report, the statutory debt limit had not been increased.

Statement of Social Insurance-Medicare

HHS considered the financial impact of both the reductions in Medicare payment rates for physician services and the budget sequestration, which was then expected to take effect, respectively, on January 1, 2013, and January 2, 2013, when preparing the fiscal year 2012 SOSI for Medicare. For policy changes enacted after the end of the fiscal year, but prior to the issuance of the financial statements, the financial statements should disclose the nature of the policy changes and, if known, the estimated effect on the projections related to the Statements of Social Insurance. The American Taxpayer Relief Act of 2012, enacted on January 2, 2013, included certain provisions affecting Medicare. As of the issuance of the Financial Report, the full financial effects of this Act on the Medicare SOSI projections are not known.

Updates to Troubled Asset Relief Program (TARP) Investments

American International Group, Inc.

During December 2012, Treasury sold the remaining 154 million shares of AIG common stock held by Treasury under TARP at a share price of $32.50. The sale of the AIG common stock resulted in proceeds of $5.0 billion to Treasury under TARP.

General Motors

During December 2012, Treasury sold 200 million shares of GM common stock held by Treasury under TARP at a share price of $27.50 per share, which resulted in proceeds of $5.5 billion to Treasury under TARP.

See Note 5—Troubled Asset Relief Program (TARP)—Direct Loans and Equity Investments, Net for further information on TARP investments related to AIG and GM.

Sale of Non-TARP Investments in AIG

During December 2012, Treasury sold all remaining 80 million shares of AIG common stock held by the General Fund at a share price of $32.50 per share. The sale of the AIG common stock resulted in proceeds of $2.6 billion to the General Fund. See Note 6—Non-TARP Investments in American International Group, Inc. for further information on the non-TARP investments in AIG.

Hurricane Sandy

In late October 2012. Hurricane Sandy made landfall in the mid-Atlantic region of the United States, impacting the physical landscape, the people and the region’s economy. As a result of the storm, the Government launched various response and recovery efforts, including power restoration, provisioning of food, fuel shelter, and security, reestablishing connectivity, and flood level and damage (e.g., erosion) assessments. The Government is still in the process of evaluating the impact of this storm and is unable to quantify damages at this time related to emergency relief assistance to the impacted states.

Emergency Unemployment Compensation Benefits

Subsequent to September 30, 2012, emergency unemployment compensation benefits, first authorized by the Supplemental Appropriations Act, 2008 and extended by the American Recovery and Reinvestment Act of 2009 and other authorizing legislation through January 2, 2013, were extended through January 1, 2014, by the American Taxpayer Relief Act of 2012.


Last Updated:  February 27, 2013