Treasury suspends some federal retirement funding
U.S. Treasury Secretary Janet Yellen listens to a reporter’s query at a information convention through the Annual Conferences of the Worldwide Financial Fund and World Financial institution in Washington, U.S., October 14, 2022.
Elizabeth Frantz | Reuters
The U.S. Treasury has suspended new investments in a federal retirement program, the most recent in a string of actions it has taken to stop default after the federal government hit its debt ceiling, Treasury Secretary Janet Yellen instructed congressional leaders Tuesday.
The Treasury is taking so-called extraordinary measures to maintain paying its payments after it breached its $31.4 trillion borrowing restrict Thursday. Yellen has stated she expects the actions to stop default no less than till June 5.
That is the third motion the Treasury has taken to make sure the federal government, restricted from borrowing amid debt ceiling negotiations, nonetheless has sufficient cash to pay its payments. Final week, Yellen suspended new investments within the Civil Service Retirement and Incapacity Fund and the Postal Service Retiree Well being Advantages Fund till June 5.
Lawmakers try to strike a deal to elevate the U.S. borrowing restrict and stop a first-ever default on U.S. debt. Some members of the brand new Republican Home majority have pushed to tie spending cuts to a rise within the borrowing restrict.
Senate Majority Chief Chuck Schumer, D-N.Y., stated Tuesday that Republicans have “resorted to brinkmanship and hostage-taking” as they make “calls for for draconian spending cuts.”
Yellen on Tuesday stated the company can not make investments absolutely within the Authorities Securities Funding Fund, or so-called “G Fund,” till the debt ceiling is raised or suspended. The fund is a part of the Thrift Financial savings Fund beneath the Federal Workers’ Retirement System.
“The statute governing G Fund investments expressly authorizes the Secretary of the Treasury to droop funding of the G Fund to keep away from breaching the statutory debt restrict,” Yellen wrote in a letter addressed to Home Speaker Kevin McCarthy, R-Calif., on Tuesday. “My predecessors have taken this suspension motion in related circumstances.”
She added that the fund shall be “made complete” as soon as Congress raises the debt ceiling. Yellen stated federal retirees and staff “shall be unaffected by this motion.”