Gov’t pension fund raided to avoid 8 trillion debt limit
Shocking news via the Chicago Sun-Times:
The Bushadministration told Congress on Thursday it had begun to use agovernment pension fund to keep from hitting the $8 trillion debt limit.
Treasury SecretaryJohn Snow warned in a letter to congressional leaders that he would runout of room to make such maneuvers in about four weeks, meaning thegovernment would lose the ability to meet its obligations unlessCongress had raised the borrowing limit by then.
As of Tuesday, thegovernment’s borrowing subject to the limit stood $38.8 billion belowthe current debt limit of $8.184 trillion.
In his letter, Snowsaid Treasury would begin taking investments out of a $65.3 billiongovernment employee pension fund called the G-fund.
By withdrawing investments, Treasury is making room on the government’s books for increased borrowing.
Snow said he isutilizing a maneuver that has been employed by other Treasurysecretaries during times when the government’s borrowing levels wereapproaching the debt limit. Without the action, the debt limit wouldhave been reached on Thursday, said Treasury spokeswoman BrooklyMcLaughlin.