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U.S. Starts Tapping Into Federal Pensions

May 16, 2011 by  

U.S. Starts Tapping Into Federal Pensions

On Monday, United States Treasury Secretary Timothy Geithner told Congress that he will begin suspending investments in government retirement funds in order to free up borrowing capacity.

CNBC.com reported, “Geithner said he would suspend investments in two government retirement funds, which will give the U.S. Treasury $147 billion in additional borrowing capacity.”

Geithner also said, “I again urge Congress to act to increase the statutory debt limit as soon as possible.” The Treasury has said that it will continue to suspend such investments as part of a plan to keep the government solvent, but that such measures would only work until Aug. 2.

The article said, “Previous administrations have also tapped the retirement funds at times to avoid breaching the debt limit. Over the past two decades, Treasury has suspended investments five times, with the most recent suspension in 2006.”

Geithner claimed, “Federal retirees and employees will be unaffected by these actions,” but that he “will be unable to invest fully” in the civil service retirement and disability fund and the government securities investment fund.

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