The Washington Post reports that Treasury Secretary John Snow said that he will rely on the fund to avoid reaching the statutory limit in a letter to Congress. He said the Treasury is suspending investments and will redeem a portion of money credited to the fund.
Snow said that once Congress raises the debt limit the Treasury will “restore all due interest and principal” to the pension fund, according to the Post. 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. All of the G Fund assets of about $65.3 billion are available for the Treasury’s use.
Many employees object to the move, arguing that it amounts to a raid on their personal accounts. Colleen Kelley, president of the National Treasury Employees Union, said last month, according to the Post, 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 said the move will buy time until mid-March and urged Congress “to pass a debt limit increase immediately.” He also said the Treasury “has now taken all prudent and legal actions to avoid reaching the statutory debt limit.”