Government may disinvest in fed worker retirement fund to avoid default

Treasury_Department_rear_view

An article by the Post’s Eric Yoder explained that the federal government may temporarily disinvest in a retirement fund for federal employees to help avoid debt default while lawmakers work out their differences on spending. 

The Treasury Department has said it may resort to “extraordinary measures” to pay the government’s bills in coming months, as political leaders try to negotiate deals on the debt limit and deficit reduction. One way to buy time would be to suspend or limit the government’s issued securities to the Government Securities Investment Fund, also known as the “G Fund.”

Thrift Savings Plan executive director Greg T. Long has assured investors that such a maneuver would have no affect on their earnings through the program. “G Fund account balances will continue to accrue earnings and be updated each business day, and loans and withdrawals will be unaffected,” he said in a statement. 

President Barack Obama’s said in a weekly address that he “will not compromise” with Congress over lifting the federal debt ceiling. The nation’s credit rating dropped the last time lawmakers threatened inaction on the ceiling in 2011.

For more federal news from The Washington Post, visit The Federal Eye, The Fed Page, and PostPolitics.

Follow Josh Hicks on Twitter or subscribe his Facebook page.

Josh Hicks covers Maryland politics and government. He previously anchored the Post’s Federal Eye blog, focusing on federal accountability and workforce issues.

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Josh Hicks · January 8, 2013