Bush administration takes emergency steps to avoid debt ceiling

[tuvor]

WASHINGTON (AFP) - US President George W. Bush (news - web sites)'s administration weathered a pre-election mauling as it announced emergency measures to skirt a 7.38-trillion-dollar debt limit.

Treasury Secretary John Snow said he would use pension money to keep the government running.

In a letter to Senate majority leader Bill Frist, Snow said he was immediately suspending payments to a federal employees' retirement scheme, the Government Securities Investment Fund (G-Fund).

The missing money would be repaid in full later, with no net effect on the fund or retirees, he promised.

http://story.news.yahoo.com/news?tmpl=story&cid=1521&e=16&u=/afp/us_vote_economy_debt

[Barrett808]

1. Didn't Bush just excoriate Kerry for raised the debt ceiling many times?

[shraby]

3. Isn't it a no-no to mess with pensions?

Private business recently got in trouble for the very same thing.

[truthisfreedom]

29. every time bush brings up a new subject with respect to Kerry he's talking

about some new dastardly crap he's about to pull himself. he has a subconcious revelation problem.

[struggle4progress]

38. Budget Gap Swells to Record $413 Bln

By Laura MacInnis and Tim Ahmann

WASHINGTON (Reuters) - The U.S. budget gap expanded to $412.55 billion in fiscal 2004, marking the Bush administration's second-straight record deficit, the Treasury Department said on Thursday. <snip>

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=6506402

[shaolinmonkey]

2. So we're totally broke? Thanks republicans!

Thanks a friggin' heap. I'll get my torch and my pitchfork and I'll meet you at your gated community mm'kay?

[LibertyorDeath]

7. I'm standing here all by myself So hurry up

and bring extra pitchforks mm'kay :)

[shaolinmonkey]

8. Sorry, I've got to sharpen them first. >:D

[Renew Deal]

13. Not broke. Over budget

There is a slight difference.

[KansDem]

18. Sorry, had to hock my torch and pitchfork to pay for prescription drugs.

Can I still come anyway?

[shaolinmonkey]

22. Sure, an angry mob is more about numbers than it is about

fire and pointy things.

[aquart]

4. WHOSE pension money????

Let me guess: not his.

[expatriot]

39. OMG... this is big. this is one hell of a talking point.

[whistle]

5. Raiding the Social Security/Medicare-Medicaid surplus funds....

...may become a feeding frenzy for republicans as the election draws closer and the Bush loose becomes eminent. A special session of congress should be convened immediately to prevent this wholesale destruction of these programs by republicans.

[Inland]

6. Uhh...aren't there, like, laws that tell the admin. where to spend money?

The Bush admin. decides that it doesn't want to raise the debt limit before the election, so it decides that some payments can wait--but Congress appropriated money for the pension fund.

Wonder why the impeachment proceedings haven't started?

[UpInArms]

9. related article: Treasury suspends debt issuance to state, local gov'ts

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7BF207842A-777A-487C-B88B-F7FC32C9832A%7D&

WASHINGTON (CBS.MW) -- The Treasury Department has suspended sales of State and Local Government series (SLGS) nonmarketable Treasury securities in order to prevent the federal government from reaching the $7.38 trillion debt ceiling. Earlier in the day, the department announced that the government could operate until mid-November without raising the debt limit if special measures were taken. Lawmakers are expected to return to Washington after the Nov. 2 elections to hold a special "lame duck" session to ensure the government continues running.

Hang on folks, it's going to be a bumpy ride.

[Jose Diablo]

43. After Nov 2 would be the proper time

to lock down Congress with back to back filibusters to stop any new spending until after 1/20/05.

I doubt the people or the media will fail to see what the lame ducks were up to. It would be better to see the government grind to a halt on the Republicans watch.

Sounds like the repubs timing is off, the screeching halt was not supposed to happen until March or so.

Something tells me we can expect a lot of recall petitions next year for repubs, maybe.

[AlCzervik]

10. Wow, raiding the pension fund, United States of Enron

Oh please let Kerry seize on this. how many Federal empolyee's dont know this is going on?

[The Magistrate]

21. Indeed, Ma'am

The polite term for this is embezzelment of pension funds....

"Republicanism is a character flaw."

"LET'S GO GET THOSE BUSH BASTARDS!"

[Mountainman]

11. That's how San Deigo got in trouble.

The city stopped paying in to the retirement fund and now is millions in the hole.

[Q3JR4]

12. "The missing money would be repaid in full later,

with no net effect on the fund..." Sounds very Enron-esque to me.

[Renew Deal]

14. Exactly

How exactly are they going to do this? A special appropriation? Next years budget?

[Zorra]

15. OMG - This is unbelievable. How could anyone vote Bu$h/repubican?

Anyone who votes for these dangerous, incompetent, irresponsible frauds has got to be completely nuts.

[AlCzervik]

16. I'm hoping Lou Dobbs will cover this today.

[Amigust]

17. Waiting till after the election

eom

[coreystone]

19. The “G Fund” is one of the choices of Federal Employees…

in the Thrift Savings Plan (TSP); basically a 401(k) for federal employees. There are other funds which are inherently more risky. This is the web site for the TSP.
http://www.tsp.gov/

Just to give anyone a rough idea of the basic concept of the G Fund, I have copied this from another site:
http://www.tsp.gov/features/chapter08.html

" What is the G Fund?
The G Fund consists exclusively of investments in short-term, nonmarketable U.S. Treasury securities specially issued to the TSP. G Fund investments earn interest at a rate that is equal, by law, to the average rate of return on outstanding U.S. Treasury marketable securities with 4 or more years to maturity. Currently, the maturities of the securities in the G Fund range from 1 day (on business days) to 4 days (over holiday weekends).
What are the advantages and risks of investing in the G Fund? 
There is no credit risk (that is, risk that principal or interest will not be paid) for the Treasury securities in the G Fund. They are guaranteed by the full faith and credit of the U.S. Government.
Because of the Board's current policy of investing only in short-term securities, there is also no market risk in the G Fund. Market risk is the risk of fluctuations in the value of securities due to changes in overall market rates of interest. If you are uncomfortable with market risk, the G Fund may be the most appropriate investment fund for you. However, G Fund rates of return may well be lower than those of the other TSP funds over the long term.
As a result of the G Fund rate calculation and the Board's policy of investing exclusively in short-term securities, investors receive a longer-term rate on short-term securities and at the same time avoid the market risk associated with longer-term securities."

I am employed by the USPS, and this news from the Treasury Department is MOST disturbing. I am 54 years old and about a third of my money is tied into the G Fund. I always have the option to move to a “more risky” fund, but, considering the current economy, I am rather throwing the dice in a crap game if I do that. I used to allocate a lot of money into the C Fund (very representative of the S & P 500). BOY, needless to say, I really lost my shirt when everything fell down several years ago.

Between Social Security and this new scam by Snow, I am getting to be somewhat TICKED! To put it mildly!

:grr:

[The_Casual_Observer]

20. They ought to simply cancel the fund, just like they do when any other

enterprise goes bankrupt. What makes them special? Every was all for the tax cuts, so they also should be OK with the consequences.

[AlCzervik]

23. Well i just talked to my friend that works for social Sec.

she had no clue this was happening and neither did her co-workers. they are not happy to say the least.

[coreystone]

24. We Are Definitely Talking About MANY votes......

here. I am off from work today, but, I can assure everyone that there will be some very PO'd Postal Employees, to say less about the other members of our massive Federal bureaucracy. We are talking about millions of voters distributed across the the United States as well as those working in foreign countries.
:nuke:

:kick:

[Zhade]

25. ...AGAIN.

Bastards.

[nibbana]

26. Promises..promises...

[donkeyotay]

27. Well, you didn't expect them to be accountable for their actions

First, the fraudulent one whines about Kerry voting to increase the spending ceiling... how many of them to accomodate this miserable misadministration? Then, the Republican Crime Family, in a desperate move they hope no one will notice, plunders a pension fund rather than - horrors - admit the truth???

Just another lie in a long series of lies.

[GoddessOfGuinness]

28. Federal employees ought to strike...

and we should be able to sue these pigs for gross mismanagement of funds!

[coreystone]

31. Can't!!! It's Illegal!.....

Please remember what happened to the "air controllers" during the Reagan administration. I happened to know one. There was no mercy.

In any event, that is not the issue. If any have checked my links on a earlier posts you will notice that the number of employees is phenomenal (I don't know the exact number), but, this includes people such US Attorneys, military, and so forth. The TSP (401(k)) retirement investment program is not just limited to the "lower echelons" of the Federal Government, it IS the primary means of Federal employees on every level to independently deduct funds from their payroll checks to enhance the Federal Employees Retirement System (FERS), Civil Service Retirement System (CSRS), and, others! This is not a good approach to making friends.

[Media_Lies_Daily]

30. Once it fails to arrive in the pension funds, I wouldn't count on....

...it ever getting there.

[thecrow]

32. so..... should we pull out our investments from the stock market?

I'd rather pay the penalty than lose it all again.
It has taken me three and a half years to get it back to where it WAS. I'm a 55 year old single mom with absolutely no parachute.
I just found out today that this was another "no pay raise" kind of year. At least I have a job, and I'm thankful for that.

[goforit]

33. Where the hell did all that $$$$$$$ go?

[coreystone]

34. Tax Cuts to the Rich to Boost the Economy, "unexpected ....

International military actions,.....BOY! You name it!!


----------------------------------------------------------
Just a side track from Lou Dobbs, Gergen actually thinks Kerry may win??????????:dem:

[ianrs]

35. is it too much to hope that

"messing with military pensions", or "fiddling the Republic's books because there's an election on" replaces "Kerry's mean to Mary, er Lynne, er, lesbians, who terrify us,er,um" as the theme of the week? And as a happily gay man from Gayville on the planet Gaiety, I mean no disrespect to my sisters.

[struggle4progress]

36. Borrow and spend! Borrow and spend! eom

[muriel_volestrangler]

37. The household equivalent: rather than extending your overdraft

when you've screwed up your finances, you decide not to pay the electricity bill, and hope that some money comes in before they tell your family you're going to get cut off.

[expatriot]

40. Bush: Putting more cash in the wallets of the wealthy by...

...by looting the piggy banks of the workers.

[expatriot]

41. Could you imagine what would happen if Clinton did this?

H-Y-P-O-C-R-I-S-Y

The rightwing would be foaming.

[expatriot]

42. Hey Big Dawg... how's your heart holding up? We need you about now...

...to tell the country how you did it and who can get us back to fiscal sanity.

[UpInArms]

44. related article: Treasury skirts $7.4 trillion debt limit

http://www.newsday.com/business/ny-bzdebt1015,0,2999454.story?coll=ny-business-headlines

WASHINGTON -- Awash in red ink, the federal government has torn up its credit card to keep the national debt under the legal $7.384 trillion ceiling.

Treasury Secretary John Snow made the announcement in a letter to Congressional leaders, warning that he had stopped borrowing funds and would run out of time and gimmicks by mid-November. At that point, he wrote, "all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted."

Snow also asked Congress to raise the raise the debt limit.

At the moment, there is no threat to government operations. "The Treasury has more than enough funds," said Lou Crandall, chief economist for Wrightson ICAP, bond research firm based in Jersey City, N.J.. Nor do investors face any risk as long as Congress does indeed raise the debt limit next month.

It would be the third hike in four years as the federal debt has risen by $1.8 trillion since 2000. In that time, federal finances have also swung from a $127 billion budget surplus to the $413 billion deficit for the 2004 fiscal year, which Snow also announced Thursday.

...more...