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U.S. Treasury suspends government retirement, health fund payments as debt limit resets

Reuters
Reuters
 2021-08-02
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WASHINGTON, Aug 2 (Reuters) - U.S. Treasury Secretary Janet Yellen on Monday took additional steps to preserve the federal government's borrowing capacity under a reinstated debt limit, suspending some investments in government employee retirement and health benefits funds.

In a letter to House of Representatives Speaker Nancy Pelosi and other congressional leaders, Yellen said she was suspending investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund that are not immediately required to pay beneficiaries.

A two-year suspension of the federal debt limit expired on Saturday, reinstating the cap at the current debt level of about $28.5 trillion.

The Congressional Budget Office has estimated that the extraordinary measures could claw back more than $340 billion in borrowing capacity under the limit. CBO said these actions, combined with the Treasury's current cash balance of about $459 billion, would allow the government to avoid a payment default into October or November as a partisan fight unfolds over a new suspension or increase in the debt cap. read more

Yellen warned Congress in late July that a critical date could be Oct. 1, when the government faces $150 billion in mandatory payments as the 2022 fiscal year starts. read more

Yellen's letter on Monday offered no new timetable for how long the extraordinary measures, which also include suspending daily reinvestments in the federal retirement "G-Fund," would last.

"I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible," Yellen wrote.

Treasury is required by law to make the funds whole once Congress approves a new borrowing limit.

Our Standards: The Thomson Reuters Trust Principles.

Comments / 575

Judy Martin
08-02

great also cut Congressional salaries make them live like the people they represent not like royal elitist they have become. no more paying out for big spending lawmakers to line their family fortunes off the taxpayers.

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War Eagle
08-02

Be prepared for a deep recession followed by a depression it’s coming folks. It is exactly what the Dems want. That way they can implement their socialist agenda and control everything

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Travis Kurelo
08-02

No more increasing the debt limit. We are borrowing money in the debt, and giving that money to other countries. We need a budget, one that pays down our debt. Budget should be no more then 3.5 trillion, that's how much the IRS takes in taxes. Fire all the congressional and senator staffers too, all of them.

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