§53723 Payments by Secretary or Administrator and Issuance of Obligations

Summary

Payments the Secretary or Administrator must make under sections 53721 or 53722 must be paid in cash. If the account under section 53717 does not have enough money, the Secretary or Administrator can issue obligations (IOUs) to the Secretary of the Treasury. The Secretary or Administrator, with the Treasury Secretary’s approval, decides the form, denomination, maturity, and other terms except the interest rate. The Treasury Secretary sets the interest rate using the average market yield on similar U.S. marketable securities from the month before the obligations are issued. The Treasury must buy those obligations and may use proceeds from selling securities under chapter 31 of title 31 to do so. The chapter 31 authority is expanded to allow these purchases. The Treasury may later sell, redeem, or buy back the obligations, and those actions count as public debt transactions. Any money borrowed this way must be put into the correct account under section 53717, and redemptions are paid from that account.