U.S. Treasury Secretary Janet Yellen listens to a reporter’s query at a news conference throughout the Annual Meetings of the International Monetary Fund and World Bank in Washington, U.S., October 14, 2022.Â
Elizabeth Frantz | Reuters
The U.S. Treasury has suspended latest investments in a federal retirement program, the newest in a string of actions it has taken to forestall default after the federal government hit its debt ceiling, Treasury Secretary Janet Yellen told congressional leaders Tuesday.
The Treasury is taking so-called extraordinary measures to maintain paying its bills after it breached its $31.4 trillion borrowing limit Thursday. Yellen has said she expects the actions to forestall default no less than until June 5.
That is the third motion the Treasury has taken to make sure the federal government, restricted from borrowing amid debt ceiling negotiations, still has enough money to pay its bills. Last week, Yellen suspended latest investments within the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Advantages Fund until June 5.
Lawmakers are attempting to strike a deal to lift the U.S. borrowing limit and forestall a first-ever default on U.S. debt. Some members of the brand new Republican House majority have pushed to tie spending cuts to a rise within the borrowing limit.
Senate Majority Leader Chuck Schumer, D-N.Y., said Tuesday that Republicans have “resorted to brinkmanship and hostage-taking” as they make “demands for draconian spending cuts.”
Yellen on Tuesday said the agency can not invest fully within the Government Securities Investment Fund, or so-called “G Fund,” until the debt ceiling is raised or suspended. The fund is a component of the Thrift Savings Fund under the Federal Employees’ Retirement System.
“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,” Yellen wrote in a letter addressed to House Speaker Kevin McCarthy, R-Calif., on Tuesday. “My predecessors have taken this suspension motion in similar circumstances.”
She added that the fund might be “made whole” once Congress raises the debt ceiling. Yellen said federal retirees and employees “might be unaffected by this motion.”
