Watch Out! Feds Could Seize Your Private Retirement Savings
By Greg Brown
How long before Uncle Sam hits private pensions to balance the public budget? It’s quickly becoming a reasonable question to ask.
Treasury Secretary Timothy Geithner is ringing alarm bells across Washington, D.C., warning of a disastrous outcome if an agreement to raise the debt ceiling is not made soon. “A default would call into question, for the first time, the full faith and credit of the U.S. government,” Geithner wrote in a letter Friday to Sen. Michael Bennet, D-Colo.
After weeks of such warnings, the United States has hit its $1.43 trillion debt ceiling hard. In response, GOP leaders have demanded cuts in federal spending equal to any increase in the limit while maintaining a strong line against tax increases.
As Congress squares off over a debt ceiling vote, Treasury is scrambling to find cash in the couch cushions. One of the ways it will scare up extra money is by putting off saving for the retirements of federal workers — in effect, short-term “borrowing” from public pension funds.