U.S. Taps Exchange, Pension Funds as Debt Limit Looms

Treasury Secretary John Snow authorized the government to use the $15 billion available in the exchange stabilization fund on March 3 and issued a ``debt issuance suspension period'' to temporarily stop investments in the Civil Service Retirement and Disability Fund. The Treasury also redeemed some of the fund's current investments.

Actions by the Treasury provide ``only a few days of additional borrowing capacity, which we expect will be exhausted by mid-March,'' Snow said in a letter to House Speaker Dennis Hastert. ``Treasury has now taken all prudent and legal actions to avoid reaching the statutory debt limit.''

The Treasury said beneficiaries of the civil service retirement fund ``will be fully protected and will suffer no adverse consequences'' from the funding suspension. The department is required to restore all interest and principal due the fund as soon as possible, without exceeding the debt limit.

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"As soon as possible..." Mmmm, given the current state of our federal government, I'd say that those who have money in the retirement fund are screwed. Just like those who have contributed to pensions at companies like United Airlines and GM.

What is the Exchange Stabilization Fund?

What is the Civil Service Retirement and Disability Fund?