February 16th 2006 - The U.S. Treasury acted Thursday to avoid hitting the national debt limit and said it's "imperative" Congress raise the debt ceiling by the middle of March.
Treasury is suspending reinvestment in the so-called "G-Fund," an investment vehicle for a federal employees' retirement system. The action will free up $65.266 billion, a Treasury spokeswoman said.
"Without this action we would reach the debt limit today," spokeswoman Brookly McLaughlin said Thursday.
Congress and the Bush administration have been negotiating an increase in the current $8.18 trillion debt limit. On Wednesday Treasury said it would suspend sales of state and local government non-marketable securities.
Now Treasury Secretary John Snow is urging Congress to raise the debt limit by mid-March.
"I know that you share the president's and my commitment to maintaining the full faith and credit of the United States," Snow wrote to Senate Majority Leader Bill Frist, R-Tenn., on Thursday.
Beneficiaries of the government retirement fund won't be affected by the temporary halting of reinvestment, Snow explained to Frist. The fund will recoup all payments, including interest, Snow said.
"Once I am able to make the G-Fund whole, the effect on the G-Fund and its beneficiaries will be the same as if this temporary action had never taken place," Snow wrote to Frist.
Meanwhile, with the federal budget deficit projected to reach $423 billion in 2006, both Republicans and Democrats have so far balked at raising the debt limit.