The U.S. hit the debt ceiling set by Congress today, forcing the Treasury Department to start taking extraordinary measures to ensure the federal government can keep paying its bills.
This includes suspending investments in the Civil Service Retirement and Disability Fund as well as reinvestment of Treasury securities held by the Thrift Savings Plan G-Fund until Congress acts to raise the debt limit. By law, the funds will be made whole once the debt limit has been raised. Federal employees will not be affected by these actions.
Treasury Secretary Janet Yellen urged Congress to immediately raise the debt ceiling, which is the maximum amount the federal government is able to borrow to finance obligations that lawmakers and presidents have already approved. If the debt limit is not raised by the time the extraordinary measures are exhausted, the Treasury will be unable to continue paying the nation’s bills and the federal government will temporarily default on many of its obligations. Yellen said it’s unlikely the government will exhaust its cash and the emergency maneuvers before early June.
Raising the debt limit does not authorize new government spending, but rather allows the government to finance existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.
Because the U.S. has never before defaulted on its debt obligations, it is unclear how the government would operate if that occurs. Under one scenario, some federal workers could be furloughed or asked to continue working on the promise of back pay in the future.
As Congress and the White House begin discussion on the debt limit, NTEU will continue fighting to protect employee pay and benefits and ensure that the government does not default on its obligations.
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