commissioner.org
| Source | Eubulides |
| Date | 06/03/09/22:40 |
| Retirement Fund Tapped to Avoid National Debt Limit
By Stephen Barr Wednesday, March 8, 2006; D04 THE TREASURY DEPARTMENT HAS started drawing from the civil service pension fund to avoid hitting the $8.2 trillion national debt limit. The move to tap the pension fund follows last month's decision to suspend investments in a retirement savings plan held by government employees. In a letter to Congress this week, Treasury Secretary John W. Snow said he would rely on the Civil Service Retirement and Disability Fund to avoid bumping up against the statutory debt limit. He said the Treasury is suspending investments and will redeem a portion of the money credited to the fund. Once Congress raises the debt limit, the Treasury will "restore all due interest and principal" to the pension fund as soon as possible, Snow said. He made a similar promise when the Treasury announced that reinvestment of some assets in the Thrift Savings Plan's government securities fund, or G Fund, had been suspended. The civil service trust fund will provide the Treasury with several billion dollars for extra borrowing. The fund had an estimated balance of about $655 billion at the start of the year, but only a small portion of that is available to the Treasury because of the statutes restricting the fund's use during "debt issuance suspension" periods. The G Fund has assets of about $65.3 billion, and all are available for Treasury's use. The Treasury has leaned on federal employee retirement funds in past years when officials worried about a possible default on the national debt, and most federal employees take it in stride. Still, many employees object to the financial maneuvers, arguing that they amount to a raid on their personal accounts. Colleen M. Kelley , president of the National Treasury Employees Union, said last month that federal employees should not have their pension accounts "used as a rainy day fund. . . . No private-sector employer would ever be allowed to do this." Snow wrote to Congress that his maneuvers will buy time until mid-March and urged lawmakers "to pass a debt limit increase immediately." He said the Treasury "has now taken all prudent and legal actions to avoid reaching the statutory debt limit." |
Copyright (c) 1998, Joongpil Cho