It’s official: The Thrift Savings Plan’s G-Fund is back to full strength after losing almost $400 million courtesy of last year’s debt ceiling showdown.
The confirmation comes from a Government Accountability Office review of the Treasury Department’s maneuvering to head off an unprecedented U.S. default after Congress initially deadlocked over raising the nation’s borrowing limit. The standoff was resolved (at least temporarily) last August with approval of the Budget Control Act, which traded a debt-ceiling increase for spending cuts.
But in the months before the act’s passage, Treasury resorted to a number of “extraordinary actions” to buy time. One involved the G-Fund (officially known as the Government Securities Investment Fund), which is invested in short-term bonds. Because those bonds count against the debt ceiling, the government in May 2011 halted new investments as a temporary means of holding down borrowing. But, of course, if that money’s not invested, it’s not earning interest. Some $137.5 billion in G-Fund principal lay fallow during the 3-1/2 month hiatus. By GAO’ s reckoning, the lost interest amounted to $378.5 million.
By law, however, the government has to make up the difference once the crisis is over. That’s since been done, the review says, as the Treasury Department has “fully restored” the lost interest.
“It’s exactly as if they had never had to use the extraordinary actions,” Susan Irving, one of the report’s authors, said in an interview.
The G-Fund was not the only account touched in this way. The Treasury Department performed similar maneuvers–albeit in smaller amounts–with the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund. Both have also been made whole, according to the report.
So relax, already. At least until next time.