The 11th hour of fiscal cliff now in full effect, the big threats are starting to come out — one of which might see the U.S. Treasury tapping federal employee pension funds to keep the country afloat.
This worst-case scenario, discussed by the Washington Post, may be part political posturing, but federal officials are now scrambling to find measures to keep the wheels of government — and the economy — rolling as leaders continue to bicker over the details of a solution to the impending tax hikes.
In working to batten down the hatches before the fiscal storm hits, Treasury has announced that it temporarily suspend a program designed to help state and local governments handle their own spending issues — effective Friday. That’s expected to loosen between $4 billion to $17 billion.
If a political solution is not found in the near future, Treasury has announced that it will begin using the federal employee pension reserves as a bank — though it has promised to pay back the money once the fiscal cliff issue is fixed.