“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies, all who question its methods or throw light upon its crimes… As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong it’s reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.
Uncle Sam is running a little short, and he has turned to his loyal staff for help.
It’s ironic that even as government leaders consider cuts to federal employees’ retirement programs, those same programs are being used to make room under the debt ceiling.
When the ceiling was reached Monday, Treasury Secretary Timothy F. Geithner told Congress that the Civil Service Retirement and Disability Fund had to take a hit to keep the government afloat.
His letter to congressional leaders also said he is unable to “invest fully” in another fund, the G Fund, which is part of the Thrift Savings Program (TSP) that federal workers pay into for retirement.
What this means is that until Aug. 2, the government can keep the cash by redeeming investments and suspending new investments in the retirement and disability fund. That fund provides defined benefits to retired and disabled workers. The maneuver will free up $17 billion in headroom under the ceiling, according a Treasury list of frequently asked questions.
The entire balance of the G Fund matures daily and is reinvested. Treasury will suspend that reinvestment to generate headroom worth $130 billion.
That’s a lot of federal employees’ money Sam is using, without even asking their permission. But federal workers should not fret. They are in no danger of losing any money while they help Sam out of a jam.
“The fundamental message is G Fund investors are fully protected,” said Tom Trabucco, a TSP spokesman. “This will have no effect on TSP activities. Participants may continue to contribute, borrow and withdraw. Their accounts will be updated every day. The fundamental message I would like to send is G Fund investors should not feel their investments are at risk and feel, ‘I’ve got to protect my investments by moving to another fund.’ ”
If further assurance is needed, Geithner said that, by law, the funds “will be made whole once the debt limit is increased. Federal retirees and employees will be unaffected by these actions.”
History can testify to that. The two funds have been used to help Uncle Sam from hitting his head on the ceiling five times in the last 15 years: in 1996, 2002, 2003, 2004 and 2006.
Nonetheless, reaction to Geithner’s action was not good from supporters of federal workers.
“This is no way to run the most powerful nation in the world,” said Rep. James P. Moran, a Northern Virginia Democrat. “It puts our fragile economic recovery at risk and the retirement savings of the American people on the line.”
Matthew S. Biggs, legislative director of the International Federation of Professional & Technical Engineers, which represents employees in the Navy Department, Army Corps of Engineers and NASA, was more blunt.
“Raiding any pension fund, regardless of the circumstance, is playing with fire,” he said. “It really is unfortunate that we are faced with a situation where the United States is paying its bills with the pension resources that federal employees have paid into and earned. . . .
“The question is, what will happen with federal employee pension resources if the Congress somehow finds a way to not increase our debt limit? Right now, nobody has that answer.”
Congress might find a way to save money by cutting the government’s contribution to retirement benefits and making employees pay more out of their pockets, a move that would amount to a decrease in pay of at least 5 percent.
Re-enactment of The Glass Steagall Act will take back/nullify all the fake IOUs from the world’s richest aka; banking cabalists like Rothschild Banking Cartel and instantly and dramatically reduce The United States debt ceiling.
What’s new about this, as my colleague Lori Montgomery reported Sunday, is that the Obama administration is seriously considering the idea, which has been pushed by Republicans and the National Commission on Fiscal Responsibility and Reform.
The view among proponents of the plan is that federal retirement programs should be brought more in line with less generous private-sector plans. But that view violates an understanding — a contract, in their view — that federal workers believe they have with government.
As Patricia LaSala, a Veterans Affairs nurse and National Federation of Federal Employees official, said last week: “I entered into a contract where I agreed to make less money because I knew that in the end I would have health care and a pension.”
Although administration officials are sympathetic to LaSala’s point, their consideration of using retirement funds to help solve the nation’s financial problems demonstrates that nothing is safe for federal employees.
On one hand, federal retirement contributions are seen as drag on the nation’s finances and need to be cut back. On the other hand, those retirement programs are called upon to help Sam out of a tight spot.
“It is clear that federal employee retirement funds aren’t bankrupt or bankrupting America,” said Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association. “Rather, the funds are strong enough to save the nation from bankruptcy.”
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