As US Reaches Debt Limit, Geithner Implements Additional Extraordinary Measures...

US Treasury ^ | 5-16-2011 | Colleen Murray

[blam]

As US Reaches Debt Limit, Geithner Implements Additional Extraordinary Measures To Allow Continued Funding Of Government Obligations

By: Colleen Murray
5/16/2011

Today, the United States has reached the statutory debt limit. Secretary Geithner sent the following letter to Congress this morning alerting them to actions that have be taken to create additional headroom under the debt limit so that Treasury can continue funding obligations made by Congresses past and present. The Secretary declared a "debt issuance suspension period" for the Civil Service Retirement and Disability Fund, permitting Treasury to redeem a portion of existing Treasury securities held by that fund as investments and suspend issuance of new Treasury securities to that fund as investments. He also suspended the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan. For more information on these measures, please read this FAQ.

Last Friday, Secretary Geithner also responded to an inquiry from Senator Bennet regarding the fiscal and economic consequences of failing to increase the debt limit. That letter can be found here.

Secretary Geithner continues to urge Congress to raise the debt limit in a timely manner in order to uphold the full faith and credit of the United States.

The Honorable Harry Reid Democratic Leader United States Senate Washington, DC 20510

Dear Mr. Leader:

I am writing to notify you, as required under 5 U.S.C. § 8348(l)(2), of my determination that, by reason of the statutory debt limit, I will be unable to invest fully the portion of the Civil Service Retirement and Disability Fund (“CSRDF”) not immediately required to pay beneficiaries. For purposes of this statute, I have determined that a “debt issuance suspension period” will begin today, May 16, 2011, and last until August 2, 2011, when the Department of the Treasury projects that the borrowing authority of the United States will be exhausted. During this “debt issuance suspension period,” the Treasury Department will suspend additional investments of amounts credited to, and redeem a portion of the investments held by, the CSRDF, as authorized by law.

In addition, I am notifying you, as required under 5 U.S.C. § 8438(h)(2), of my determination that, by reason of the statutory debt limit, I will be unable to invest fully the Government Securities Investment Fund (“G Fund”) of the Federal Employees’ Retirement System in interest-bearing securities of the United States, beginning today, May 16, 2011. The statute governing G Fund investments expressly authorizes the Secretary of the Treasury to suspend investment of the G Fund to avoid breaching the statutory debt limit.

Each of these actions has been taken in the past by my predecessors during previous debt limit impasses. By law, the CSRDF and G Funds will be made whole once the debt limit is increased. Federal retirees and employees will be unaffected by these actions.

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. I again urge Congress to act to increase the statutory debt limit as soon as possible.

Sincerely,

Timothy F. Geithner

  Identical letter sent to:

The Honorable John A. Boehner, Speaker of the House The Honorable Nancy Pelosi, House Democratic Leader The Honorable Mitch McConnell, Senate Republican Leader

cc: The Honorable Dave Camp, Chairman, House Committee on Ways and Means

The Honorable Sander M. Levin, Ranking Member, House Committee on Ways and Means The Honorable Max Baucus, Chairman, Senate Committee on Finance The Honorable Orrin Hatch, Ranking Member, Senate Committee on Finance All other Members of the 112th Congress

Colleen Murray is Spokesperson for Domestic Finance.

[Liz]

EDDIE HASKELL, TREASURY SECRETARY

Separated at birth?

[Liz]

"You look wonderful today, President Obama."

" And how is your lovely, tall wife, our well-dressed, toned and buff First Lady?"

"And those adorable children you sired when you finally managed to nail the assertive fem/libber in the sack?"

[unixfox]

I would say at least the big cities are going to have some kind of turbulence.

Good. It's time to clean up the sewers anyway.

[w4women]

Here’s my take: Obama wants Republicans to not raise the debt. He can then blame them for all the economic failures of this administration.

[blam]

IMO...it's all a show.

There is no way back from here.

Any cuts big enough to have any chance will cause a revolt in the streets. We are presently borrying 41% of the budget just to stay at this economic level. Any cuts will cause further economic slow-downs and result in less taxes collected and requiring more borrying.

The only solution is to inflate the debt away by printing more 'funny money' till it's worthless. This will also cause a revolt in the streets.

There's no (peaceful/bloodless) way back from here.

Prepare now.

[GOPJ]

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