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U.S. Treasury Takes Another Step to Avoid Hitting Debt Limit

May 31 (Bloomberg) -- U.S. Treasury Secretary Jacob J. Lew said he is suspending reinvestment of the Government Securities Investment Fund of the Federal Employees’ Retirement System, one of the measures to avoid exceeding the nation’s $16.7 trillion debt limit.

The measure, disclosed today in a letter from Lew to congressional leaders of both parties, provides about $160 billion in headroom under the debt limit, according to a Treasury official.

The so-called G-Fund is a money market defined-contribution retirement fund for federal employees. It is invested in special-issue Treasury securities, which count against the debt limit.

Lew said this month that the Treasury’s extraordinary measures and a one-time payment from Fannie Mae will allow the U.S. to stay under the debt limit at least until September.

To contact the reporters on this story: Ian Katz in Washington at ikatz2@bloomberg.net; Kasia Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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