Treasury raids federal pensions until debt ceiling hike

by Joel McDurmon on Jan 19, 2012

Reuters reports that the U.S. Treasury has begun raiding federal pension funds to keep the Obama administration afloat until the automatic debt-ceiling hike next week.

Part of the deal emerging from last year’s debt-ceiling stand-off which resulted in the supercommittee failure was a change in burden of approval: the $1.2 trillion dollar hike which before had to be passed by both houses of Congress is now considered passed unless both houses vote to block it—an unlikely event, especially in the Senate.

So this raiding of the pension fund does two things: First, it pressures Congress to act. It focuses the eyes of all federal employees whose pensions are at risk upon Congress, leaving Congressmen standing in the spotlight. And after all, the raided fund likely includes Congress’ pensions.

Secondly, and more importantly, the Treasury’s move is an almost arrogant voice of self-assurance that the debt-ceiling hike will indeed become a reality. The administration would be loathe to rob from its own pensions were it not quite sure it could pay them back in the near future. It may be acceptable to run Social Security on a phantom “trust fund,” but not the federal pensions. And borrowing from it permanently would be like robbing Robin Hood to pay Little John.

Meanwhile, the administration knows any effort from Congress to block the hike will be futile. While the House has already voted on a bill disapproving of the hike, the move is only symbolic. The Senate almost certainly will not follow, just as it refused to do in a similar measure last fall.

Besides, the Treasury has done this many times before, and has always gotten away with it—notably last spring when the whole stand-off began.

Continue Reading on news.yahoo.com

Tags:

Categories:

Bureaucracy Civil Government Economics

6 Comments

January 19, 2012 at 4:29 pm

Here we go again, the Federal Government raiding pensions with the provision that they will pay them back after a debt ceiling increase, don't make me laugh. The Federal Government has raided social security for the past 40 years and now we find it's bankrupt in all reality with no money to pay anything back much less keep the Federal Government running.

I say to hell with the Federal Government, don't raise the debt limit, make them reduce spending and close unneeded Federal Departments like the EPA, and Fema to begin with. We keep raising the debt limit, they Obama's minions keep spending and spending until the next dept limit increase. STOP IT NOW, WE HAVE NO MONEY PERIOD!!!!!!!

−Californian
Reply ↓
January 19, 2012 at 4:45 pm

This alone is reason enough to vote against Obama, no matter who his opponent may be, and then there is an even longer list for the same reasoning, contained in his record of failed policies, and the detriment of those policies, he has been able to pass, on the American business sector, as well as the American people themselves. Obama is undoubtably the worse President in our history, and has set the black people back a hundred years in white people's assesment of their capability to govern and lead this great nation, what a terrible shame, but they insist on backing Obama, despite his complete failure, just for the reason of the color of his skin, and shows the worse type of racism that most good people have fought against, for the benefit of those now applying that racism.

−Randy131
Reply ↓
January 19, 2012 at 7:14 pm

Borrowing money from one account to pay for another is dangerous. But hey, it is okay because the value of the U.S. dollar is whatever they say it is, right?

We truly are on the road to perdition.

What is next? States' printing their own money because the fed's dollar is so worthless? What a tragedy that would be but it could happen.

−Gringo Infidel
Reply ↓
January 22, 2012 at 5:28 am

Obviously not a "Robin Hood" fan. "Rob Robin Hood to pay PRINCE John".

−Maid Marion
Reply ↓