Treasury Secretary Timothy Geithner notified members of Congress this week that, until they raise the federal debt limit, he would tap one of their retirement funds — known as the “G Fund”— to keep the government running. The lawmakers need not fear for their golden years, however. The threat is hollow: Once the debt showdown is over, the Treasury will by law restore all contributions and earnings. The G Fund is guaranteed to earn money for members of Congress and other federal employees. The $128 billion fund is an oft-overlooked perk of congressional service. It offers the return of long-term Treasury bonds, at no risk. The average American taxpayer guarantees the G Fund but can’t buy a share. “What possible justification could there be for establishing a special class of higher-paying U.S. Treasuries, available only to federal employees? On top of a too-generous pension plan? On top of a too-generous thrift plan? There is none,” said Jim MacDougald, president of The Free Enterprise Nation, a group of free market conservatives. In addition to their congressional pensions, and Social Security payments, members of Congress qualify for the federal Thrift Savings Plan, which is similar to a private sector 401(k). The government match to the TSP is 5 percent, and costs are low because much of the program is administered by federal employees. Yet the truly unique feature of the TSP is the Government Securities Investment Fund—or G Fund—which offers, as the U.S. government puts it, “the opportunity to earn rates of interest similar to those of long-term Government securities but without any risk of loss.” The G Fund is invested in non-marketable short-term US Treasury securities “specially issued” to the TSP, the government notes. “Payment of principal and interest is guaranteed by the U.S. Government.”
Posted on: Thu, 15 Aug 2013 22:21:18 +0000
Trending Topics
Recently Viewed Topics
© 2015