Budgetary Maneuvers Continue

The TSP’s government securities G fund again has been “disinvested” as a short-term measure to provide operating funds to the government when it hit the debt ceiling, and the TSP once again has put out a notice reminding investors that as a practical matter there is no impact on their accounts. The House has passed a bill to set aside the debt ceiling for more than a year, a bill the Senate may have to consider soon because Congress will be out of session next week and currently available funds will run out just about when it returns. Meanwhile, the House has passed a bill to repeal the recently enacted limit on COLAs for nondisabled military retirees under age 62, but at the cost of extending budgetary sequestration for another year; the Senate also is moving to repeal that change, but without offsetting savings. The fate of the military COLA limit is being watched for the potential message it sends regarding COLA limit proposals in general, in particular an often-suggested idea to use a less generous inflation measure in all federal benefit programs, including federal retirement and Social Security.