The White House Bulletin

April 17, 2002 Wednesday

SECTION: IN THE WHITE HOUSE AND AROUND TOWN

Treasury Replaces Borrowed G-Fund Money, Repeats Call To Raise Debt Ceiling.

The Treasury Department today reported that it has made the federal retirement G-Fund whole, replacing the money borrowed from the fund to avoid default in the wake of a congressional failure to raise the national debt ceiling. However, Treasury used an influx of April tax revenues to replenish the G-Fund, and continues to warn that is not a permanent solution to the nation's financing needs. Treasury Assistant Secretary for Financial Markets Brian Roseboro said today in a statement, "As Secretary O'Neill informed Congress on April 2, the Treasury would use its statutory authority on April 4 to suspend investments in the Government Securities Investment Fund (the 'G-Fund'), just as Secretary Rubin did in 1995. .

Yesterday, April 16, with new revenues, the Treasury was able to fully restore the G-Fund, including full credit for all foregone interest. From the perspective of G-Fund beneficiaries, it is as if nothing happened." Roseboro added, "The Federal Government will confront the debt ceiling again this summer, unless Congress raises the debt ceiling beforehand. On June 28, for instance, the Treasury must pay about $65 billion in interest to the Social Security trust fund. Current projections estimate reaching it again in the second half of June. A revised estimate will be made in early May, after analyzing the April tax receipts.

This summer, similar stop-gap measures will not be sufficient to avoid reaching the debt limit. We hope that Congress will enact the $750 billion permanent increase as soon as possible, and we will continue to work with Congress to achieve that goal."