US taps pension fund to avoid passing debt limit

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Associated Press

Posted on January 15, 2013 at 3:00 PM

Updated Tuesday, Jan 15 at 3:01 PM

WASHINGTON (AP) — Treasury Secretary Timothy Geithner says the government has begun borrowing from the federal employee pension fund to keep operating without surpassing its debt limit.

Geithner says in a letter to congressional leaders that the move will free up $156 billion in borrowing authority while Congress debates increasing the $16.4 trillion debt limit.

The government reached borrowing limit on Dec. 31, but began using bookkeeping maneuvers to keep from surpassing it. Geithner has told congressional leaders Treasury expects to exhaust those measures by mid-February to early March.

The action has been taken by other Treasury secretaries and will not put in jeopardy any monthly pension payments. Geithner said he will replace the funds removed from the pension account after the borrowing limit is raised.

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