Treasury eyes TSP’s G fund as stopgap way to avoid debt ceiling

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The Treasury Department will have to take extraordinary measures, including borrowing from the Thrift Savings Plan’s G fund, for the next few months in order to keep the federal government from defaulting on its debts.

As the federal government comes close to reaching its current borrowing limit of nearly $20.5 trillion, the Congressional Budget Office on Nov. 30 released a report outlining some of the ways the government can continue to pay back its debts.

“To avoid breaching the limit, the Treasury would then begin to take the extraordinary measures that allow it to continue to borrow additional amounts for a limited time,” the CBO report said. “Continued use of those measures, along with regular cash inflows over the next few months, should allow the Treasury to finance the government’s activities for that period without an increase in the debt ceiling.”

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By law, all three of these funds would eventually be paid back, with interest, after Congress raises the debt limit. A spokesperson for the Federal Retirement Thrift Investment Board, which manages the TSP, said federal employees and retirees will be unaffected by any temporary borrowing measures.

“As always, we want to remind our participants that the G fund will be made whole once the debt ceiling issue is resolved and that participants will not lose a penny, thanks to the statutory protections afforded to the TSP,” she said.

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