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

EconomyAug 02, 2021 07:45PM ET
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© Reuters. U.S. Treasury Secretary Janet Yellen answers questions during the Senate Appropriations Subcommittee hearing to examine the FY22 budget request for the Treasury Department on Capitol Hill in Washington, DC, U.S., June 23, 2021. Greg Nash/Pool via REUTERS

By David Lawder

WASHINGTON (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.

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.

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.

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

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Comments (6)
Julie Sugar
Julie Sugar Aug 02, 2021 10:33PM ET
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Funny how we are supposed to be the most democratic country but average Americans like us cannot stop the elite rich from plundering our countries reserves and buys lavish lifestyles with our taxes T_T FML
king michael
king michael Aug 02, 2021 9:25PM ET
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This is what bankruptcy Trump, sleepy Biden and the corrupted FED have done to America. National bankruptcy is just too close.
New Jazenevd
New Jazenevd Aug 02, 2021 7:53PM ET
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Free-spending government folks should pay national debt out of own pockets.
ben sc
ben sc Aug 02, 2021 7:11PM ET
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13% raises will do that
Warren Wesley
Warren Wesley Aug 02, 2021 5:53PM ET
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why isn't she weighing in on the Congressional over spending? 2021 budget was 2.3 trillion. looks like we are heading for a doubling/tripling of that mark.
Christian Gustafson
Christian Gustafson Aug 02, 2021 4:42PM ET
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Biden is not POTUS. What is she doing?
Tamio Anderson
Tamio Anderson Aug 02, 2021 4:42PM ET
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Hello
Franco Dominguez
Franco Dominguez Aug 02, 2021 4:42PM ET
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is 👿😈🤘
 
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