With the U.S. on track to hit the debt ceiling limit next week, Treasury Secretary Janet Yellen warns 'extraordinary measures' will be taken to navigate the crisis.
The Wall Street Journal investigative reporter Rebecca Ballhaus on government officials allegedly trading stocks in companies that were affected by COVID-19 policies on 'The Evening Edit.'The Government Securities Investment Fund, known as the G Fund, is a money market retirement fund for federal employees enrolled in the Thrift Savings Plan that gets invested in special-issue Treasury securities that mature daily and are typically reinvested. The G Fund's balance was about $210.
When the federal government is operating at the debt limit, the Treasury Dept. has the authority to stop fully investing in the G Fund from day to day to prevent it from exceeding the debt limit. For example, if the Treasury wants to create $10 billion of space under the debt limit to allow the agency to sell more debt securities to the public that finance federal spending, it would simply not invest that amount on a given day.
After the debt limit is either raised or suspended, the G Fund is required to be made whole with interest, so federal employees and retirees who invest in it through the TSP are ultimately unaffected despite the accounting maneuvers.Treasury can also declare a "debt issuance suspension period" during which the agency delays some of its accounting moves to free up cash during a specific window of time.
It affects the Civil Service Retirement and Disability Fund , which is the main pension fund for federal employees; in addition to the smaller Postal Service Retiree Health Benefits Fund , which funds the healthcare expenses of retired Postal Service employees. Both funds are invested in special-issue Treasury securities.The Treasury Dept.
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