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Treasury Acts to Keep US from Defaulting on Debt 

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Old 05-16-2011, 04:29 PM
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Treasury Acts to Keep US from Defaulting on Debt

Treasury Acts to Keep US from Defaulting on Debt

Updated: Monday, 16 May 2011, 1:21 PM CDT
Published : Monday, 16 May 2011, 1:21 PM CDT

(NewsCore) - WASHINGTON -- The Treasury Department starting Monday will suspend investments in federal retirement and disability funds, the latest steps meant to keep the US government from defaulting.

"I have written to Congress on previous occasions regarding the importance of timely action to increase the debt limit in order to protect the full faith and credit of the United States and avoid catastrophic economic consequences for citizens," Treasury Secretary Timothy Geithner said in a letter to Congress. "I again urge Congress to act to increase the statutory debt limit as soon as possible."

A Treasury official said Monday the agency expects to hit the limit Monday as $72 billion in new debt auctioned last week is settled, though the final numbers will not be available until Tuesday morning.

Geithner ordered a debt issuance suspension period for two funds starting Monday and running until Aug. 2, when the Treasury projects that US borrowing authority will be exhausted.

Geithner said the Treasury Department would be unable to fully invest in the Civil Service Retirement and Disability Fund and the Government Securities Fund of the Federal Employees' Retirement System starting Monday. The funds "will be made whole" once the debt limit is increased and federal retirees will be unaffected, Geithner said.

Already, the Treasury had stopped issuing state and local government series securities, also known as SLGS. That action could make it harder for states and cities to issue debt.

Treasury actions announced Monday will free up about $147 billion in headroom under the debt ceiling, the Treasury Department said.

The ceiling, set by Congress, is $14.294 trillion. As of Thursday, total public debt subject to the limit was $14.256 trillion.

Treasury officials have suspended payments into the two funds five other times in the past 20 years during debt limit impasses.

Despite warnings, many Republicans and some Democrats say that any increase in the government's debt limit should be accompanied by hefty spending cuts.

The White House on Monday reiterated that the consequences of not raising the debt ceiling would be serious. "Those who suggest otherwise are whistling past the graveyard," said White House Press Secretary Jay Carney.

House Speaker John Boehner (R-Ohio) said Sunday it would be irresponsible to raise the debt ceiling without addressing America's long-term fiscal challenges.

"I'm ready to cut the deal today. You know, we don't have to wait until the 11th hour. But I am not going to walk away from this moment," Boehner told CBS's "Face The Nation."

It remains unclear how the sides will reach a deal.

One of the big worries is that investors will spurn US debt if a default appears imminent, forcing interest rates higher and inflicting broader damage on the economy.

Read more: http://www.myfoxhouston.com/dpps/bus...#ixzz1MXs9Izun

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Old 05-17-2011, 12:21 AM
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Re: Treasury Acts to Keep US from Defaulting on Debt

Good thing we bailed out all those banks and GM....

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Old 05-17-2011, 02:02 AM
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Re: Treasury Acts to Keep US from Defaulting on Debt

They are just going to end up raising the limit. No real reform ever gets done.

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Old 05-17-2011, 08:50 AM
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Re: Treasury Acts to Keep US from Defaulting on Debt

These assholes can't manage money for shit....yet they still hold those jobs. Ridiculous

Well, OUR money anyway. They probably manage their paychecks just fine.

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Old 05-17-2011, 12:44 PM
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Re: Treasury Acts to Keep US from Defaulting on Debt

Debt + FEMA = A new life for everyone!

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Old 05-18-2011, 01:39 AM
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Re: Treasury Acts to Keep US from Defaulting on Debt

Pretty soon an American dollar is going to be worth less than a fucking peso.

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