Retirement Fund Tapped to Avoid National Debt LimitSo we're in the deepest debt we've ever been and the Bush Administration's solution is pushing for the national debt limit to be raised? In the meantime they're "borrowing" from the retirement of federal employees?
The Treasury Department has started drawing from the civil service pension fund to avoid hitting the $8.2 trillion national debt limit. The move to tap the pension fund follows last month's decision to suspend investments in a retirement savings plan held by government employees.
In a letter to Congress this week, Treasury Secretary John W. Snow said he would rely on the Civil Service Retirement and Disability Fund to avoid bumping up against the statutory debt limit. He said the Treasury is suspending investments and will redeem a portion of the money credited to the fund.
Once Congress raises the debt limit, the Treasury will "restore all due interest and principal" to the pension fund as soon as possible, Snow said. He made a similar promise when the Treasury announced that reinvestment of some assets in the Thrift Savings Plan's government securities fund, or G Fund, had been suspended.
Colleen M. Kelley, president of the National Treasury Employees Union, said last month that federal employees should not have their pension accounts "used as a rainy day fund. . . . No private-sector employer would ever be allowed to do this."
Snow wrote to Congress that his maneuvers will buy time until mid-March and urged lawmakers "to pass a debt limit increase immediately." He said the Treasury "has now taken all prudent and legal actions to avoid reaching the statutory debt limit."
Maybe this is an overly simplistic analysis, but let's bring this down to a personal level. If you find yourself getting close to your debt (or credit) limit, no matter the circumstances, the responsible, commonsense thing to do is to decrease spending and start paying down that debt-- the irresponsible, myopic solution is to borrow from your retirement (or other people's retirement!) while you wait for an increase in your debt limit.
Everyone who reads a newspaper with any regularity knows that too much debt and lack of savings is a huge problem in America, that far too many Americans are just a paycheck or two away from serious financial trouble. Even Cheney got into the act recently, just a few days ago he warned that we all need to save more money.
Hmmm. I wonder where we get the message that there is nothing wrong with spending money that you don't have and going deeply into debt? Perhaps the Bush Administration should take a little of their own advice. Or maybe the Democrats and all the real fiscal conservatives in congress should get together and send a message to the Bush Administration-- by rejecting their request to take us deeper into debt.