Treasury dips into pension funds to avoid debt

Reuters ^ | January 17, 2012 | Reuters

[John W]

The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion.

[WOBBLY BOB]

this from April 2010:

Unions want to dump pensions on taxpayers

Legislation introduced last week could shift costs of union pension plans to taxpayers in an attempt to stave off organized labor’s pension funding crisis.

Senator Bob Casey, Pennsylvania Democrat, introduced the Create Jobs & Save Benefits Act of 2010 to address the funding problems faced by union-administered multi-employer pension plans.

Multi-employer pension plans have to cover the benefits of members, even if their companies are defunct.

(Excerpt)

http://dailycaller.com/2010/04/06/troubled-labor-looks-to-federal-government-for-help-on-pensions/

[MadMax, the Grinning Reaper]

If Geithner and all the other Obama crooks would pay their back taxes and then pay 75% of their wealth into the Treasury, our economy would be in good shape. But nooooo! They are keeping their money for themselves and screwing the American taxpayer/worker, again, and without vaseline.

[MHGinTN]

Democrats have been talking about doing this for a long time. I watched Richard Gephardt being interviewed more than a decade ago and he was floating the idea, rationalizing it with ‘private investment of retirement funds needs to be done by the federal government because individuals won’t know how to do it without getting burned.’ The democrap party went european socialist decades ago. We’re just starting to realize how much they hate the We The People Republic.

[Prokopton]

We are in debt up to our ass, They have stolen 500 Billion from Medicare, they are killing Social Security and now they are fugging over the Pension system.

And the "they" are Republicans led by Democrat plant, Crybaby Boehner.

[Linda Frances]

Lesson 1:
 
Why the U.S. credit rating was downgraded:
 
• U.S. Tax revenue: $2,170,000,000,000
• Fed budget: $3,820,000,000,000
• New debt: $ 1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cuts: $ 38,500,000,000
 
Let’s now remove 8 zeros and pretend it’s a household budget:
 
• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts: $385
 
Got it?
 
OK, now Lesson #2:
 
Here’s another way to look at the Debt Ceiling:
 
Let’s say, you come home from work and find there has been a sewer backup
in your neighborhood, and your home has raw sewage up to your ceilings.
 
What do you think you should do?
 
1. Raise the ceilings, or
2. Pump out the sewage.
 
 
Your choice is coming in November of 2012. 

[jiggyboy]

Does anyone think they will attempt to seize private bank accounts?

Bank of America is using customer deposits as margin for their derivatives. You would think that should be completely illegal (think MF Global) but it's just another day in the incestuous relationship between a TBTF bank and the government.

BTW, "nobody should make the mistake that BofA is alone in this move: every other bank that has major derivative exposure and has a depository base has certainly been forced to do precisely the same..."

http://www.zerohedge.com/news/bank-america-forces-depositors-backstop-its-53-trillion-derivative-book-prevent-few-clients-dep

[95B30]

They have done this on multiple occasions and never once paid the monies back. The worst one was back in the 90’s when they took money out of this fund and paid WELFARE while working folks had to beg for charity to feed their kids and were still required to show up for work. They also stopped all Veteran payments too.

[LucyT]

Treasury dips into pension funds to avoid debt

The Treasury on Tuesday started dipping into federal pension funds in order to give the 0hbummer administration more credit to pay government bills

Thanks Jet Jaguar.

[Cobra64]

.

.

[JohnBovenmyer]

how do they plan to pay it back and make the pension fund whole??

During the government 'shutdown' under Clinton 'because' of Newt, the Treasury robbed from several pension plans and furloughed many 'workers.' When Newt's GOP caved not only were the pension plans made whole, but the 'furloughed' were granted their normal pay for those days. Even though they hadn't done any work! And afterwards it came out that the unions had planned the whole paid vacation in advance with Clinton, well before the 'crisis' ever started.

[businessprofessor]

This action is a non event. There is no pool of assets to dip into unless this involves the personal retirement accounts. I assume that Little Timmy does not have access to the personal retirement accounts for federal employees. There is no asset pool for the FERS plan (nor CSRS either). Any money put into the FERS fund is immediately spent on other programs. It makes no difference if the money is put into the fund or not. It is simply an accounting gimmick (fraud is more accurate) to dupe the public and give government employees a reason to gripe.

The reporting on government finances is atrocious. Do news organizations have an ounce of financial literacy?

[preamble]

I think Tim Geithner did this before.

He takes money out of the TSP -— the federal employee 401(k) system.
Basically it’s stealing the Federal Employees’s own money.

Then he pays it back later. Probably the G fund, Treasury fund.

Of course, it sounds like Mr. Jon Corzine— let me just take these customer
funds which are supposed to be segregated! !!!!!

Pretty soon the Feds are coming after your 401(k) not just federal employees!!!

[muawiyah]

We've gone through this many times.

Eventually "they" will need to detach federal employee retirement systems from the government ~ maybe simply vest us in public lands or something that can be sold or used profitably.

So, folks at the moment I'm subsidizing you!

[traditional1]

Where's the SEIU outrage?

There is none....because they KNOW taxpayers will be leaned on to make up the shortage.

Let the government Union employees have cuts to their pensions!

[seowulf]

It is simply an accounting gimmick (fraud is more accurate) to dupe the public...

Not exactly.

What they are "borrowing" from is the G fund of the Thrift Savings Plan that covers federal employees under FERS and the military.

The TSP is the equivalent of a 401k that employees have contributed to with a 5% matching by the employer (Fedgov).

The G fund is a close as the TSP comes to having a cash account and is invested in special issue treasury bonds.

This is not the first or the last time that retirement accounts have been raided.

[businessprofessor]

“The G fund is a close as the TSP comes to having a cash account and is invested in special issue treasury bonds.”

Special issue treasury bonds are just another fraudulent accounting scheme. You have been duped into believing that these non marketable TBills have some economic significance. The Social Security Administration has a warehouse full of this fraudulent and worthless paper.

The only possible significance is if Congress prevented Obama from spending beyond the debt limit. Since Congress will lift the debt limit, this transfer is just a non economic event.

[jpsb]

"Let’s now remove 8 zeros and pretend it’s a household budget:

Excellent!

[seowulf]

Special issue treasury bonds are just another fraudulent accounting scheme.

Probably no more or less fraudulent than any other treasury bond or dollar bill for that matter.

When push comes to shove, they're all only worth what the government tells us they're worth.

[Go Gordon]

Where's the SEIU outrage? There is none....because they KNOW taxpayers will be leaned on to make up the shortage.

I true tinfoil hatter would say the unions are okay with it because they know the market is about to take a big dump. So, they'll liquidate some of the retirement funds' investments now, but the feds have promised to wait to pay it back until after the big dump occurs. You know, sell high, buy low.

[milagro]

And--probably--so are the TSP accounts. You know, those PRIVATE RETIREMENT ACCOUNTS each and every Congress critter has (or can have if they wish) since, circa 1985, Fed employees were switched from Civil Service Retirement System (CSRS) to FERS. TSP (Thrift Savings Plan)is a system whereby Fed employees can take a percentage of their pay and INVEST it in private accounts--of varying risks. At one time, the Government even matched those investments (at a rate of 5%, I think).

I know personally of one Fed employee who earned $50,000 over 7 years, with a MINIMUM investment.

Just think how much the Congress critters have been able to put away, especially those who have been there over 25 years (since 1985).

So why do the Dems in this Congress RAIL against ANYONE who suggests allowing non-government employees to have PRIVATE RETIREMENT ACCOUNTS????