Treasury suspends G Fund investments in debt crisis
Department is forced to take the temporary measure because Congress did not raise the federal debt ceiling before adjourning.
Treasury Secretary John Snow Thursday indicated the government has reached the statutory federal debt ceiling, notifying Congress that he must begin to tap a federal retirement fund to avoid breaching the limit.
In a letter to Senate Majority Leader Bill Frist, R-Tenn., Snow wrote that, starting Thursday, he would be unable to fully invest in the Government Securities Investment Fund, the so-called G Fund.
"The statute governing G Fund investments explicitly authorizes the Secretary of the Treasury to suspend investment of the G Fund to avoid breaching the statutory debt limit," Snow wrote.
The action is temporary and will not affect G Fund beneficiaries because, by law, Treasury must make up the lost investments when the debt crisis is over.
Congress failed to raise the debt limit before departing this week to campaign. Snow said Congress must raise the limit by mid-November, "at which time all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted."
Congress is planning to return Nov. 16.