Does the Tea Party owe approximately $378 Million in Interest?

By Patricia L Johnson

The consequences of default on U.S. Government obligations would be so horrific that U.S. law allows the Treasury Department to utilize various methods to avoid default, including suspending investments into the Civil Service Retirement and Disability Fund and eliminating daily reinvestment of the G fund.

Federal law (Sections 8348 and 8438 of U.S. Code Title 5) then requires the Treasury Secretary to reimburse both the G Fund and the Civil Service Retirement Fund once the debt ceiling issued is resolved, including paying back any interest that was lost on the investments.

According to an article in Government Exec, Tom Trabucco, Director of External Affairs for the Board, estimates the interest to be approximately $378 million dollars.

The report on the May 16, 2011 through August 2, 2011 debt limit suspension period will soon be sent to the Federal Retirement Thrift Investment Board.

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