WASHINGTON– U.S. Treasury Secretary Timothy Geithner told Congress he would start tapping into federal pension funds on Monday to free up borrowing capacity as the nation hits the $14.294 trillion legal limit on its debt.
The U.S. Treasury will issue $72 billion in bonds and notes on Monday, pushing the nation right up against its borrowing cap at some point during the day, a Treasury official said.
Geithner said he would suspend investments in two government retirement funds to give the U.S. Treasury additional room to borrow.
"I will be unable to invest fully" in the civil service retirement and disability fund and the government securities investment fund, he said in a letter to congressional leaders.
The Treasury has said the suspension of the investments and other measures it could take would give the government until about August 2 before it will start defaulting on obligations, such as paying bond investors.
Congress is in charge of increasing the debt ceiling, but Republicans are demanding deep cuts to federal spending for the price of their support in doing so.
Geithner reiterated previous pleas for action. "I again urge Congress to act to increase the statutory debt limit as soon as possible," he said.
© 2013 Thomson/Reuters. All rights reserved.