If you work for the federal government, do you think the federal government is a good guardian of your tax and retirement dollars?
The Pentagon has admitted that more than $3 trillion is missing from the Department of Defense; $59 billion went missing from HUD in 1999, and the Social Security Trust Fund has been ripped off at least three times since the attacks of 9/11.
Now, the Treasury Department has begun dipping into the civil service pension fund, according to The Washington Post. The reason, The Post said, is to avoid hitting the $8.2 trillion ceiling on the national debt. The move follows a decision last month to suspend investments in a government employees retirement savings plan.
Treasury Secretary John Snow, writing to Congress last week, said he would bank on the Civil Service Retirement and Disability Fund to avoid bumping against the statutory debt limit. Snow said his department is suspending investments and will redeem part of the money credited to the fund.
The civil service trust fund, like the Social Security trust fund, will afford the Treasury several billion dollars for extra borrowing. Snow said when Congress boosts the debt limit, the Treasury Department will restore all due interest and principal to the pension fund as soon as possible. Snow made a like promise when he announced that reinvestment of some assets in the Thrift Savings Plans government securities fund had been suspended.
The civil service trust fund had an estimated balance of about $655 billion at the beginning of the year, The Post said, but only a fraction of that is available to the Treasury because of laws restricting the use of the fund during debt issuance suspension periods. The G fund, or securities fund, holds about $65.3 billion, and all of that can be taken by the Treasury.
The Treasury has carried out this kind of transferring of funds from federal employee retirement accounts in the past when Congress feared a possible default on the national debt. Most federal employees take it as part of the way things are, but many others object to the financial maneuvers, claiming it is a raid on their personal funds.
The president of the National Treasury Employees Union, Colleen Kelly, said last month that federal workers should not have to see their pension accounts used as a rainy day fund. No private sector employer would ever be allowed to do this.
Meantime, Secretary Snow is urging Congress to hurry and raise the debt limit.
From the March 15-21, 2006, issue