# Bush Administration Works to Avoid Hitting Debt Limit



## Robert A. Langager (Feb 22, 2002)

http://www.foxnews.com/story/0,2933,185136,00.html

Bush Administration Works to Avoid Hitting Debt Limit

Thursday, February 16, 2006

WASHINGTON - The Bush administration told Congress on Thursday it had begun to use a government pension fund to keep from hitting the $8 trillion debt limit.

Treasury Secretary John Snow warned in a letter to congressional leaders that he would run out of room to make such maneuvers in about four weeks, meaning the government would lose the ability to meet its obligations unless Congress had raised the borrowing limit by then.

As of Tuesday, the government's borrowing subject to the limit stood $38.8 billion below the current debt limit of $8.184 trillion.

In his letter, Snow said Treasury would begin taking investments out of a $65.3 billion government employee pension fund called the G-fund.

By withdrawing investments, Treasury is making room on the government's books for increased borrowing.

Snow said he is utilizing a maneuver that has been employed by other Treasury secretaries during times when the government's borrowing levels were approaching the debt limit. Without the action, the debt limit would have been reached on Thursday, said Treasury spokeswoman Brookly McLaughlin.

Snow said once the debt limit was raised, he would make the employee pension fund whole, putting back the investments that had been withdrawn and making up any lost interest payments. The fund's formal title is the Government Securities Investment Fund of the Federal Employees Retirement System.

Treasury has other bookkeeping maneuvers that can be used and they announced that as of Thursday they suspend sales of debt securities to state and local governments.

Treasury officials said they did not expect auctions of debt to the public to be disrupted as long as Congress acts soon to raise the debt limit.

While Congress is expected to raise the debt limit, Democrats hope to use the upcoming debate to highlight what they contend are the failures of the administration's economic policies.

The administration sent Congress a budget last week that on paper would cut the deficit in half by 2009, the year President Bush leaves office.

But Democrats contend the administration met its deficit-reduction goal only by leaving out major spending items such as the full costs of the Iraq war. They say the deficit will not improve unless Bush abandons his effort to make his first-term tax cuts permanent.

Rep. Charles Rangel of New York, the top Democrat on the Ways and Means Committee, said Snow's announcement Thursday "is proof positive that deficits do matter and that Republican leadership needs to take action."

The last time Congress voted to increase the debt limit was in November 2004 when it was raised from $7.38 trillion to its current level of $8.18 trillion.

The administration has not said how much of a boost should be made in the current limit, but the expectation is that Congress will probably end up raising the debt limit by around $800 billion.


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## DecoyDummy (May 25, 2005)

Well, well, well ... wouldn't that be interesting if the Federal Government Retirement program went the way of some of the Airlines and even maybe GM.

Just gives all the more meaning to the term "Ownership Society"

GWB was touting that a while back, but I haven't heard the term coming out of Washington lately ...

Being a "Self Employed Entrepreneur" myself ... I live by the notion of "Ownership" and do so by my own "Wits, Ability and Means" every day of my life ... whether anyone in the Federal government trumpets it or not.

Maybe folks should listen a little closer to GWB about that "Ownership Society" philosophy.

Why should any of us expect someone else to "pay our freight" when we can (or desire to) no longer work? :-? :-? :-?


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## Robert A. Langager (Feb 22, 2002)

Well that wasn't really the reaction I was looking for, but I'll take a shot. I don't really see a pension, whether it be govt. or private, as an entitlement in the sense of welfare, whether personal or corporate.

Paying the freight? Correct me if I am wrong, but don't employees pay into their pensions througout their working lives? I would hate to think the federal pension plan will go the way of the airlines.

What I was driving at was the fact the the administration is borrowing from the govt. pension plan to avoid hitting the $8 trillion debt ceiling, and is using that to convince congress to raise the debt ceiling even higher.

Robert


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## DecoyDummy (May 25, 2005)

Nope ... I don't imagine you do ...

But ... take it from a "reverse psychology" perspective ....

Why would I want to pay into something for my entire working life which then requires me to "rely" on someone else's "PROMISE" to cover my "Behind" once am for all intents an purposes "incapacitated."

I simply ask ... doesn't that reality make an "Ownership Society" much more valuable to average working stiff on the street?????

Somehow in my mind ... that particular "stock pile of cash" has no business existing to begin with. I suppose that would be my point ... it sure has helk has no benifcial purpose in my life.


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## Alaskan Brown Bear Killer (Feb 22, 2005)

Your smoking crack if you believe anyone is going to take money out of the G fund, That's just *B S*!


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## buckseye (Dec 8, 2003)

It would only be fair to take some from the gov workers too, they have robbed social security all ready. Heck it's only paper, they make new paper every day. It's gonna be real interesting when the gov declares bankruptcy on us and the other lenders around the world.


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## KEN W (Feb 22, 2002)

Buckseye....we agree again....they are writeing IOU's on Soc. Sec.....might as well take money from Gov't workers also.....especially congressman.Maybe then they would wake up and stop the pork barrel garbage.


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## Bobm (Aug 26, 2003)

> Buckseye....we agree again....they are writeing IOU's on Soc. Sec.....might as well take money from Gov't workers also.....especially congressman.Maybe then they would wake up and stop the pork barrel garbage.


That makes all three of us agreeing  
I better go out and see if its a full moon :wink:

If congress and govt workers were on the SS security system it would be fixed and there would be money on it.

But we are all too economically illiterate to demand that. So they go on plundering our retirement


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