U.S. Treasury Secretary Timothy F. Geithner said he was suspending reinvestment of the Government Securities Investment Fund of the Federal Employees’ Retirement System, as one of the measures to avoid exceeding the $16.4 trillion debt limit.
“Federal retirees and employees will be unaffected by this action,” Geithner said today in the letter to congressional leaders.
Using this measure frees up $156 billion, according to the Treasury Department, which estimates that all the emergency measures will run out as early as mid February. After that, the U.S. may no longer be able to meet its obligations, such as Social Security or Medicare payments, causing “irreparable harm to the American economy,” Geithner said in a separate letter yesterday.
This step leaves Treasury with one last extraordinary measure it can still tap, suspending reinvestment of the Exchange Stabilization Fund.
President Barack Obama warned Republicans in Congress not to use the debt limit as an opportunity to force new spending reductions, while many Republicans say a boost in borrowing authority must be linked to cuts in government expenditures.