Notes to Financial Statements September 30, 2010 and 2009 (Dollars in thousands)
Additionally, at September 30, 2010 and 2009, the Bank had borrowings of $10,238,990 and $11,921,240 and an associated unamortized premium of $180,007 and $228,927, respectively, from the Civil Service Retirement and Disability Fund (CSR&DF), which is administered by the Office of Personnel Management (OPM).
Why would the Civil Service Retirement fund lend money to FFB? $22 billion is not chump change. It’s a third of FFB’s total liabilities.
CSR&DF has a surplus and invests that money in Special Issue Treasury securities in its normal operations. This is exactly the same for the other federal trust funds. Social Security is a perfect example. SS holds $2.6 trillion in Special Issue Treasuries. But it does not hold a penny of paper issued by the FFB. Why is the CSR&DF lending FFB 22b? The answer is not that the FFB is having any difficulty in raising money directly from its parent (Treasury). The rules are pretty clear; FFB has a blank check:
The Bank is authorized to issue obligations in unlimited amounts to the Secretary and, at the discretion of the Secretary, may agree to purchase any such obligations. (BK note: Secretary = Geithner)
More
1 comment:
Kind of like "borrowing" money from the Social Security Trust Fund.
You can't borrow money from a Trust Fund. The Fund is "trusted - to be used for a very specific purpose"
Post a Comment