Treasury plans to steal from retirement funds

[J]

Federal Times link

Treasury may borrow federal retirement funds in debt emergencyBy
SEAN REILLY | Last Updated: April 5, 2011

The government could temporarily tap tens of billions of dollars from two federal employee retirement programs if Congress fails to raise the federal debt ceiling next month, Treasury Secretary Timothy Geithner told lawmakers.

The government expects to hit a $14.3 trillion debt ceiling on May 16 or before, Geithner said in a Monday letter.

Geither implored Congress to extend the debt ceiling by that deadline and said that if Congress does not, Treasury will be forced to borrow money from the Civil Service Retirement and Disability Fund, and the Thrift Savings Plan's Government Securities Investment Fund, or G Fund, both of which are invested in U.S. Treasury securities. Those two moves could free up $142 billion through early July.

The government has taken similar steps before with no effect upon federal retirees. If the debt ceiling is extended by Congress within a couple months of the deadline, retirees and TSP participants should have nothing to worry about, several experts said. By law, both funds have to be repaid with interest, said Susan Irving, director for federal budget analysis at the Government Accountability Office.

"I would anticipate no impact," echoed Dan Adcock, legislative director for the National Active and Retired Federal Employees Association.

Geithner said borrowing money from the federal retirement programs and other "extraordinary measures" available to the government would stave off the need to raise the debt ceiling until around July 8. Once those measures are exhausted, the government "will be limited in its ability to make payments across the government," Geithner said.

In that case, retirees' pensions could be affected. Adcock said that, if that were to happen, any impact on retirement payouts would be "the least of their problems because we'll face a worldwide economic collapse.

"I think people would understand what's at stake and cooler heads would prevail," Adcock added.

Translation: Raise the debt ceiling or we'll steal your pension funds, and if you still don't raise it we'll have financial armageddon!

This is what happens when you let a tax cheat run your Treasury.

[Jaepheth]

So... the Treasury isn't subject to ERISA then?

[Sam Or I]

Great I have been paying into the TSP for about a year. $400 a month paying into it. I should know better.

[Phantasee]

What do you have to fear? You'll get the money back or money won't matter.

[Starglider]

Hardly surprising, given that Ireland and Hungary have already doing it. Of course socialists should rejoice at the later, everything is always better under government control right?

[TheHammer]

What do you have to fear? You'll get the money back or money won't matter.

Yeah I don't get what the big deal is about. Thread title is rather misleading considering it will all be paid back with interest. Unless you are proposing that it will never be paid back due to a government collapse...

[evilsoup]

Well, the government could probably find a way to write it off, if they were so inclined (note: I know very little about American law).

[TheHammer]

Well, the government could probably find a way to write it off, if they were so inclined (note: I know very little about American law).

Would never happen.

[Uraniun235]

Of course socialists should rejoice at the later, everything is always better under government control right?

No. No significant proportion of people, here or in the world, literally thinks that every aspect of human activity would function better under government control. It is unfortunate that your views are so tenuous as to require the construction of fantastically exaggerated antagonists. You might wish to reevaluate your choices and beliefs before making any further posts which highlight your faulty thinking.

[phongn]

So... the Treasury isn't subject to ERISA then?

Government pensions are not subject to ERISA.

Great I have been paying into the TSP for about a year. $400 a month paying into it. I should know better.

This only applies if you invested into the G Fund and this will be repaid. If you have invested into the L fund, you have lessened exposure.

[J]

What do you have to fear? You'll get the money back or money won't matter.

Yeah I don't get what the big deal is about. Thread title is rather misleading considering it will all be paid back with interest. Unless you are proposing that it will never be paid back due to a government collapse...

By law, for what the law is worth these days which isn't much. By law, specifically, section 13 of the Federal Reserve Act, the Fed is not allowed to take defaulted bonds and common stock as collateral for its loans. It did so anyway and no one has gone to jail or even been prosecuted, in fact there aren't any indictments at all. By law they must pay everything back with interest. If you believe they'll do so I have a unicorn for you, it even poops out pure gold bars.

Going to Phantasee's point, it's claimed that a global economic collapse will occur if the US debt ceiling isn't raised by around July 8th, and that the collapse will be so bad that pension payouts won't matter. They're essentially saying "It's Mad Max if we don't get the debt ceiling raised to fund the US government". I don't believe it. Sure it could be bad, but I'm struggling to think of a plausible scenario which results in something bad enough that pension payouts would be "the least of their problems".

[KrauserKrauser]

How anyonne can trust Geihtner and co's predictions of the impact and the proposed needs to weather the storm is beyond me.

The banks fucked themselves and the rest of us, obviously let's give the banks piles of unregulated cash and fuck everybody else.

Why does anyone trust a word that comes out Goldman Sac - I mean the Treasury department. They have been wrong in predicting pretty much everything in the last 20 years, so now they must have gotten it right with this prediction?

Fool me for the 8th time and I'm fucking retarded. Anyone trusting what Geihtner says that is not in "the club" is fucking retarded.