Treasury Secretary Janet Yellen advised Congress that her department is deploying an additional accounting maneuver to avert breaching the federal debt limit.
Yellen said in a letter to bipartisan congressional leaders that the Treasury will be altering the investments in a third government-run fund for retirees, after
The move was anticipated, as the Treasury chief had initially told Congress that
Yellen didn't offer any update on how long the extraordinary measures can be used to avoid the Treasury running out of cash. Earlier this month, she said "it is unlikely that cash and extraordinary measures will be exhausted before early June."
Tuesday's notice involved the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan, which is a defined-contribution retirement fund. As with the other two funds, Yellen said that it would be "made whole" once the debt limit is increased or suspended.
There are other measures still open to the Treasury.
Ones used in the past to conserve headroom under the debt limit include suspending the daily reinvestment of securities held by the Exchange Stabilization Fund.
That's a special vehicle that dates back to the 1930s, over which the Treasury secretary has wide discretion.
The Treasury previously has also suspended issuance of state and local government series Treasuries. Those securities are a place where state and local governments can park cash, and they count toward the federal debt limit. Those governments need to invest in other assets when SLGS issuance is suspended.
