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Our govt. is now drawing from pension funds to avoid hitting debt limit
Location: BlogsJim's Blog    
Posted by: Jim Hansen 3/6/2006
It should be a wake up call to Congress that the US Treasury Department has now started drawing from the civil service pension fund to avoid hitting the $8.2 trillion national debt limit. Congress is accountable for letting the national debt climb to this unacceptable level. Yet, Congress's response appears to be to just raise the debt ceiling and go on with business as usual so as not to upset the big money interests that are reaping the benefits from our nation's debt crisis.
I have spoken often of the massive problem of our nation's debt that Congress has not only failed to grasp, but has aggravated by its close ties to the many special interests that are making money off of that debt. Who is at risk? Well, today's news from the Treasury Department makes it clear one group expected to bail out Congress are our retired civil servants. The move to tap their pension fund follows last month's decision by the department to suspend investments in a retirement savings plan held by government employees.

Treasury Secretary Snow sent a letter to Congress today to inform them that to avoid bumping up against the statutory debt limit of $8.2 trillion, he is relying on the Civil Service Retirement and Disability Fund. Snow said his department is suspending investments and will redeem a portion of the money credited to the fund. The pension fund will give Snow several billion dollars for extra borrowing.

The Treasury Department has leaned on these retirement funds before when there was concern about possible default on the national debt. Not surprisingly, many pensioners object to their accounts being used as a rainy day fund. The fact that we have reached this point is unacceptable. Not only is our nation's fiscal health at risk, now our government is putting the retirement security of thousands of people at risk.

For more on this see an article by Stephen Barr in today's Washington Post.
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