U.S. Moves to Avoid Debt Default

Tue Apr 2,12:34 PM ET

By JEANNINE AVERSA, Associated Press Writer

WASHINGTON (AP) - The Bush administration will take steps this week to prevent an unprecedented default on the national debt by moving federal retirement funds into a non-interest-bearing account, freeing up room for more borrowing.

The juggling of federal retirement accounts, which has been done before in standoffs with Congress over raising the debt limit, will not harm federal employees' retirement nest eggs, Treasury officials said Tuesday. The lost interest payments will be made up in coming months.

Treasury Secretary Paul O'Neill explained his plans in a letter to congressional leaders.

He said his action involving the Federal Employees Retirement System interest-bearing account known as the G-Fund was done previously in 1995 by Robert Rubin, who was treasury secretary in the Clinton administration.

Without the shifting of funds, Treasury would not have been able to borrow the money it will need in coming weeks to keep the government operating, including making payments on debt that is coming due.

If it had missed those payments, the government would have been technically in default on the $5.95 trillion national debt, something that has never happened in the country's history.

"I know that you share the president's and my commitment to maintaining the full faith and credit of the U.S. government, especially at this critical time," O'Neill said in a letter to congressional leaders.

"Together we must continue working to enact an increase in the statutory debt limit as quickly as possible to avoid any negative repercussions at home or abroad," O'Neill said in his letter.

Republicans, who control the House, lack the votes to pass a measure increasing the debt limit because of opposition from GOP conservatives, who are leery that it will lead to more spending, and from Democrats.

Democrats seek to use the issue to drive home their message that the Bush administration's $1.35 trillion, 10-year tax cut last year was too generous and has pushed the country back into deficit spending.

Republicans counter that the tax cut was needed to lift the country out of recession. They blame the economic downturn and the war against terrorism for bringing back government deficits.

Treasury officials also announced Tuesday that they will auction 19-day and 12-day short-term cash management bills totaling $46 billion on Tuesday and Wednesday to refill government coffers.

Officials said the shift in the federal retirement accounts, which makes room for the increased borrowing, will begin Thursday and continue to around April 18, when the government will be receiving billions of dollars in income tax payments.

O'Neill stressed that the government retirement account "will receive complete restoration of all funds temporarily affected by this necessary action, including full and automatic restoration of any interest that would have been credited to the fund."

Treasury had warned that the $5.95 trillion debt ceiling would be hit sometime this week without action from Congress to raise the borrowing limit.

O'Neill has repeatedly asked Congress to boost the ceiling by $750 billion. But so far, Congress has not moved on the request.

Since the government began raising money to fight World War I in 1917, Congress has let the Treasury borrow the money it wants, as long as it stays within limits set by Congress.

-- (Nice going @ dumbass. Dumbya!), April 03, 2002

Answers

All I wanted was my TAX CUT.

Didn't care about the future, just wanted my TAX CUT.

TAX CUT TAX CUT TAX CUUUUUUUUUUT!!!!!

Didn't care about the old people, didn't care about the economy.

Didn't care about tomorrow.

I just wanted my TAX CUT. Wanted it NOW NOW NOW NOW NOW NOW NOWWWWWW.

Hey, WHAT HAPPENED TO THE ECONOMY????

-- (Gimme@My.TaxCut), April 03, 2002.

On April 15, all patriots will send an extra $2000.00 to the IRS. Only greedy repugs will refuse to do this.

-- (gimme@my.tax increase), April 03, 2002.

You know that "free" money (300.00) Bush sent to everyone? No one mentioned that it was what you were going to get back on your tax return anyway. It wasn't anything that wasn't owed you and you wouldn't have gotten anyway. Here you sit thinking you are getting XXX amount of money on your tax return, but there is this little line that subtracts that little $300.00 you got months ago was nothing more than an advance on what you were going to get anyway. WHAT??? you get no money back?? Now you have to pay the government BACK the $300.00 they loaned you earlier?

But hey, the bribe worked on you didn't it?

Two years ago the economy was in good shape, The administration had a bead on OBL and the Taliban, The CIA and FBI were watching known terrorists, refusing to let them in the country. Then we get the Bush administration barely into office when they pull back the government coverage of known terrorists, Bush sends a group of buddies over to "bribe" (threaten) the Taliban and OBL with a deal they thought they could not refuse. Let American oil companies build a pipeline throught Afghastan and we will pave their streets with gold, if not, we will pave their streets with bombs. Guess they (our administration) believes everyone else thinks like them, money is more important than anything else. The 47million dollar down payment didn't It is ironic that it was the American CIA wh brought together all of the terrorists and trained them in the methods of terrorism which they are now using against us. It is also pretty pathetic that our CIA are gutless wonders, unwilling to put their own lives on the line for our country. Why did the Bush administration emmediatly remove all of the safeguards that Clinton had in place to protect our country againt terrorism and start interacting with known enemies of our country? Why did Busie babie take a month vacation and stay out of Washing DC when he did? Right after the Taliban turned down their offer. What was he hiding from? Why didn't he jump up in concern when told of the second WTC bombing? Every normal person over the age of 15 stopped and gave it their total undevided attention. It was rather obvious that he was expecting retaliation, perhaps not exactly the way it happened, but we had been warned by the Soviet Union anf France that there was a plan in place which involved commercial aircraft.

During Clinton's time in office he tried to instigate major safeguards in the airports, which were thrown out by republicans in congress. The same safeguards that they are screaming for now. But then you never heard about those things, with Clinton's dickplastered across the headlines.

-- Cherri (whatever@gigesdr.org), April 03, 2002.

G'nite Cherri.

-- Carlos (riffraff@cybertime.net), April 04, 2002.

YAWN

-- more fun (watching@grass.grow), April 04, 2002.

Yep, the repugs sure are disgusting. Willing to destroy our country by voting for King Dipshit just so they could get a $300 advance on their taxes 6 months early. Absolutely pathetic. No, it's WAY beyond pathetic, there is no word disgusting enough to describe it.

-- (greedy@scumbag.repugs), April 04, 2002.

Calm down ‘scumbag’, these are issues for the working people of this country. So, move along, there’s nothing here for you.

-- Send (mo@money.please), April 04, 2002.

And what exactly is your job "Send (mo@money.please)", a Professional Internet Jerkoff? Since you are on this forum all day and night, I hardly think you qualify as one of the "working people".

-- (send mo money @ full time. asshole), April 04, 2002.

Two years ago Clinton was bringing Palistine and Isrial together to make peace between them. Shrub gets put into office and declairs that it is not the place of America to babysit other countries and try to bring peace to the world, he had too much to change in Amerika, he had to undo all of the "damage" Clinton had done to te country. Now it isn't "if" we are going to go to war with Saddam, but when. The economy is shot, unemployment is at a 20 year high, corruption is accepted as normal. Not many people think thy have to work for a living-they think the world owes them instant riches(especially in their job) just because they exist. They are confused and upset when it just doesn't happen and willing to corrupt threir own values if that is the only way to get all they want.

-- Cherri (whatever@gigesdr.org), April 04, 2002.

Yeah, but what about Clinton's cock??? Clinton's cock!! Clinton's cock!! Clinton's cock!!

And don't forget Clinton's cock!!

So what if the America is going to hell? Remember Clinton's cock!!

-- (ClintonBad@Bush.Good), April 04, 2002.

Word has it that no one wants Bush's cock, Incliding laura.Seems he is doing all the typical things inaduquate men do to copensate for their lack of talent in the bedroom.

-- Cherri (whatever@gigesdr.org), April 04, 2002.

So tell us Cherri, when was the last time YOU saw a man’s cock? Many years ago is my guess…pictures/movies don’t count (neither does the neighbor’s dog).

-- Ms. (piggy@gets.nodick), April 04, 2002.

Shame on that Clinton for giving into his human urges! We repugs are much more dignified and have total control over our urges. We join a Christian church, say our prayers every morning, then molest little boys in the rooms in the back of the church.

-- John Ashcroft (dignified@conservative.fundamentalist), April 04, 2002.

Uhh,Cherri...Clinton had a handle on OBL? I guess if you call getting our embassies and ships bombed having a handle on him, then yes, he sure had a handle on them.

You are correct that two years ago Clinton tried to bring Israel and Palestine closer together, only to discover that Arafat was playing him and Barak like a fiddle.

-- give yourself (a@dopeslap.cherri), April 05, 2002.

Clinton had a handle on OBL, unfortunatly all the little boys had been sent to their little schools where they were taught the cia's ways of terrorism and brainwashed against our country. Once they were let lose in the world OBL had no direct contol over them, ever hear what a "mole" is? Our CIA did a GOOD job in teaching OBL and his terrorist group.Do you actually think there will be any direct contact between terrorists and OBL? Of course not. Send them out to blend in with the rest f the world and there is no way to find them. The reason theyhave cells is for the protection of all, one person in a cell knows ONE person in another cell, usually a cell above them which continues up to the highest cell. The people in the highest cell each only know one person below them. It's an old cold war trick.

So there is no direct connection between the terrorists and OBL and none can be proven.

-- Cherri (whatever@gigesdr.org), April 05, 2002.