Federal Employee Retirement Funds and the Public Debt Limit

Publication Date: March 2002

Publisher: Library of Congress. Congressional Research Service

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Research Area: Banking and finance

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Abstract:

When the federal government’s expenditures exceed its income from tax collections, the Treasury may borrow funds by selling bonds to the public. The Treasury also issues bonds that are held by federal trust funds, including the Civil Service Retirement and Disability Fund (CSRDF). All of the bonds issued by the Treasury, whether held by the public or by federal trust funds, comprise the public debt of the United States. The total amount of this debt can be no greater than the maximum that has been authorized in law by Congress. When the amount of outstanding debt approaches the statutory maximum, Congress must act either to reduce the public debt or to authorize an increase in the debt limit.