The Treasury Department has been warning us of it for months. And we’re not without options. Specifically, we have about 11 weeks of options. The first evasive maneuver, begun about 10 days ago, was for the Treasury to stop offering a certain type of debt that state and local governments use to smooth out their finances. Today, the Treasury will begin to borrow from the pension[s] of federal employees. And the emergency measures only get worse and more disruptive from here.
Five in the morning
1) We’re at the debt limit, so the Treasury will start raiding pensions, reports Zachary Goldfarb: “The Obama administration will begin to tap federal retiree programs to help fund operations after the government loses its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt. Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With the government poised to reach that limit Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills. Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers.