Feds to tap pension funds
Cortillaen sends us a link to the Obama Administration’s latest scheme to fund the government by tapping into the federal employee retirement fund;
Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers. The measure won’t have an impact on retirees because the Treasury is legally required to reimburse the program.
And we all know how the federal government takes seriously it’s legal obligations. Ya know, if a public corporation tried to continue operations by dipping into their employees’ pensions, the federal government would be crawling up their corporate assholes with microscopes, and rightly so.
How’s about they just stop paying retired Congressmen and Senators a pension, since the founding fathers never intended for Congress to be a career with benefits, anyway. Not only would we save a boat load of money, but they’d term limit themselves, too.
Category: Barack Obama/Joe Biden, Congress sucks
So far Little Timmy Geithner has a perfect batting average: he’s Zero for Everything.
Even bet that union membership will be the deciding metric on who pays.
Without an increase in the debt ceiling the federal government has to tap whatever source of liquidity it has available. This isn’t a scheme by the Obama administration, it’s the only course of action available to the Treasury Department to keep the government solvent because our Congress is full of children and idiots. Whether you like this sort of hardball or not this is 100% brought to you by the Tea Party.
Yeah, right. It’s ALL the TEA party’s fault. Couldn’t just reduce spending now, that’d be just CRAZY…
NSOM,
Beyond the total weight of the BS: “brought to you by the TEA Party” there is currently over $700bn in US dollars (or about 8 cents in real value) hanging out in the General Treasury, under the direct control of Geithner, that exists for the purpose of implementing Obamacare. That’s just for starters. There’s the Pigford Fraud, the money that went to over 600 congressional districts (it’s DNC math, go figure), and many other little accounting nooks and crannies.
So going for “whatever source of liquidity it has available” is stunningly incorrect. Since the TEA Party activists were mainly women and retirees, stabbing them in the eye with the ‘poor poor US government has to use whatever liquidity is available’ excuse is just business.
If you take away their funds, they can’t travel, can’t protest, and can’t make as much of an impact as in 2010. This is 100% brought to you by the White House.
This is one area where we diverge NSOM. As a proud member of the Tea Party, I can tell you that there is part of me that is for the “tough love” approach that is being execised right now, because if the goal posts just keep being moved, then the spending will just keep happening. Where is the fiscal discipline? I haven’t heard much about a real, honest approach to the out of control entitlement spending and programs that make absolutely no sense whatsoever. I havent’ heard about consolidating agencies that actually perform redundant functions within the government, which would save a lot of money. I haven’t heard about congress taking a little bit of the pain, so they could actually claim to have “skin in the game”. The only thing I’ve heard is a bunch of bitching about poor and old people being thrown out in the snow if there are any cuts to medicare/medicaid and how the only solution is to raise taxes. I’m sorry, but the rest of us have to curb our spending habits, because we have to live within our means, so I think the government can suck it up and quit spending like they have their own endless pool of cash……oh, wait, they think they already do; called the taxpayer. I haven’t heard anymore about rolling things back to 2005/2008 spending levels; why? All we here about is 1979 tax rates (and as I recall, raising taxes didn’t help the economy one bit).
Do the democrats offer a solution, other than cutting $6 billion from the budget (like THAT would do anything)? Oh, yeah, raise taxes. Not one proposal looking at really curbing spending, just more bullshit until election time. Well, by that time, we will be well over $15 trillion in the crapper.
Why not a combination of real, honest spending reductions coupled with a mild tax increase? Something that might actually give us a chance?
Like I said, whether or not you approve of using the debt ceiling as a weapon in budgetary battles or not this is the result of not being able to issue T-Bonds because the Tea Party caucus won’t allow it. Also, the other cash sources cited are tied up by law, they’re legislatively earmarked funds and so not available to be tapped by the DoT to cover the gap left by the inability to raise capital from the public. Pension funds are a source of monies available to be allocated at the discretion of Treasury. DoT was out in front of this and Geithner told everyone months ago that if you do “A” then “B” will happen. The Tea Party called his bluff and here we are.
NSOM,
Who would buy the T-Bonds? America’s not being rated at junk-bond status is only a courtesy.
The General Treasury contains funds that are not earmarked. For example, money stemming from a Statement of Charges goes into the General Treasury. If the issue of the budget ceiling was so important, the POTUS and the Senate Majority Leader would have made a deal for it long ago. Or stopped spending like two drunks on a bender. You’re assigning blame to a small group of Representatives and Senators who do not wield actual power, just rhetorical power. They are not the neck of Congress. You and I have just as much influence as they do in this process.
At the very least, Geithner could make the symbolic gesture in resolving the issue by ensuring his taxes were paid. On time. In full. Like the rest of us slobs.
Of course Geithner predicted this months ago. He’s the man who writes the cheques, and he has been given priority of fire and a target list last year. He won’t touch a single program such as Obamacare, repayment of the TARP and Stimulus, or any one of a dozen other programs and projects that support his bosses. By reducing spending, you don’t need to consider the question of the debt ceiling.
A serious question is: would Geithner still have pulled this trigger after getting an increased debt ceiling? Yes.
DaveO,
China, amongst others, would buy the T-Bonds. There’s never a shortage of people who want T-Bonds, even if its just as hedge on inflation.
I don’t understand your assignment of blame on the Pres and the Senate Majority Leader not making a deal on the budget (aside from their being Democrats), neither head bodies responsible for writing the budget, that’s the House’s purview. The Republican Speaker of the House, to his credit, has been trying to wrangle in a deal with House Dems for some time but the far from impotent Tea Party Caucus keeps outflanking him on the right every time.
As for money sitting in the Treasury’s balance sheet for legislated projects, they can’t just take it and spend it on something else. What they can do, under existing law, is borrow against the federal pension system, which is what Geithner is doing. There may be some other places they can raid still but the provisions for borrowing against obligations such as these are already codified in law. As such DoT is legally on the hook to repay the loan. Even after that there isn’t much else they can legally borrow on whether Obama wanted to or not. These pensions funds are the DoT’s last resort and in about 3 months it’s game over.
NSOM, this China? While, yes, there are countries and people still willing to buy our bonds, selling debt isn’t some endless money-well. What, exactly, do you think happens when our debt has grown so large that those bonds cannot be sold anymore? What is happening in the Eurozone can, and, without drastic changes, will, happen here. From one perspective, it already has, but we’re kicking the can down the road by selling the very bonds you advocate. You’re fixating on the inability to shovel more dirt on our own grave as though it is a bad thing. How dare that Tea-Party rabble refuse to hand over the next nail for our coffin?! A ceiling on our government’s ability to mortgage our futures is not the problem, here. A government that insists on living beyond its means is.
Corteillaen,
Yeah, that China. China still holds over a trillion in T-Bonds and is buying plenty more. As I already said, there are plenty of people willing to buy T-Bonds and every time that herd thins we can up interest rates. I don’t recall saying anywhere we should just keep blindly borrowing money and to assert that is the only other option is to create a false dilemma. The Congress must both address the deficit and maintain the integrity of the United States government, a task not beyond their capability. Right now they’re doing neither.
NSOM, Debt is our gold-standard. That won’t end well. I assign blame where Civics 101 says it belongs. I make no bones about not caring a whit for Progressives, but this is procedural politics. Financial legislation begins in the House, and continues in the Senate. The POTUS is supposed to be the master politician and legislator pushing his agenda. You know your civics – a minority can not outvote a majority. The TEA Partiers only have the power of rhetoric and public perception in the House and Senate – and that’s all they have. Those are plenty strong, and absolutely useless as we witnessed during the negotiations for the latest Continuing Resolution. Boehner’s not being outflanked at all. Many of his own people are running the committees and sub-committees. There’s no legislation, amendment, vote, or legislative action that can take place without his approval. That was how then-Speaker Pelosi shut down debate over Obamacare and other legislation – no debate, no amendments introduced, et cetera. Speaker Boehner is letting the TEA Partiers charge forward, say their peace, take the heat, play the sapper in the wire so he can do what he intends to do. Both sides play that game. Under Pelosi, it was the Progressive Caucus that did most of the yammering to stake out their initial position. TEA Partiers are being employed in the same manner. The kicker: the enemy is not the folks on the other side of the aisle. The enemy, according to the House, is the Senate. Those positions are for Reid and McConnell to deal with as they wish. The Senate usually creates an alternative bill that addresses its priorities. The main battle is in the negotiation to harmonize the Senate bill with the House bill. Neither side really loses because they’ve staked out extreme salients that they know will get cut off. And where is the POTUS? He’s off campaigning for reelection instead of taking care of business. Geithner can, at the direction of the POTUS, stop writing the cheques. Would that force a Constitutional showdown where both sides (Congress and POTUS) get… Read more »