The Treasury Department scrambled Monday to move money around as the US government hits its debt limit, preventing Uncle Sam from borrowing any more money to stay afloat while Congress remains in deadlock over a budget cuts and an extension of the limit.
Treasury Secretary Tim Geithner suspending payment to the Civil Service Retirement and Disability Fund, giving the government some spending relief until early August.
Geithner has warned Congress for month that the day would come when the government’s ability to borrow would end and was ready when the time came Monday but if the deadlock continues the government’s shaky rating in the financial markets could fall even further.
The move is primarily a gimmick. Eventually, the Treasury will have to catch up with the payments and that could cause more problems down the line but the move does give the government some breathing room while the naysayers in Congress continue to posture and pontificate.
- Treasury to Use Pensions to Keep Government Afloat (blippitt.com)
- US reaches debt limit: What comes next? (csmonitor.com)
- Geithner halts investments in 2 gov’t pensions (sfgate.com)
- Treasury Scrambling as U.S. Reaches Debt Limit (foxnews.com)