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Washington, D.C.—As she did six weeks ago when the government borrowed money from its own employees because political leaders could not agree on raising the national debt ceiling, the leader of the nation’s largest independent federal union took sharp issue with an administration decision to once again use money that rightfully belongs to federal employees to keep from breaking the law on exceeding the debt limit.

“This action is wrong,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU). “It is bad economics, bad management and bad politics—not to mention the adverse impact it has on the morale of present federal employees and the role it can play in the decisions of prospective employees to turn away from government service.”

Given the failure of Congress to pass, in an election year, an increase in the national debt limit of $5.95 trillion, as limited by current law, the Treasury Department said it will suspend or redeem investments in two trust funds that handle retirement money for federal workers—the Civil Service Retirement and Disability Fund (CSRDF) and the Government Securities Investment Fund of the Federal Employees Retirement System, known as the “G-Fund.”

Suspending investments in these two funds, Treasury said, will provide it with approximately $44 billion in borrowing capacity--$4 billion from the CSRDF and $40 billion from the G-Fund. In April, Treasury shifted some $40 billion from the Thrift Savings Plan (TSP) funds that form a substantial portion of the retirement savings of federal employees. As required under the law, those funds were returned to the TSP with applicable interest.

Despite that, President Kelley repeated her assertion that such actions are “an outrage.” She was particularly angry at what she called the “continued use of the money of federal employees and retirees in political games that are not only avoidable by doing what is right, but that clearly should be avoided.”

Such action, the NTEU leader said, “works at cross-purposes” with efforts by federal agencies to retain their quality employees—a growing problem in light of the large number of workers eligible for either early or regular retirement—and compete with the private sector for the best new employees.

“Every time the government takes a step like this,” President Kelley said, “it serves to wipe out any progress agencies might be making in either convincing quality employees to remain on the job or to attract new employees to public service. It is both foolish and extremely costly.”

She also expressed her disappointment at the continuing failure of the administration to communicate with federal employees and retirees about this use of their money.

“Federal employees and retirees have the right to full information about the circumstances and consequences of the administration’s intentions” in dealing with their money, the NTEU president said.

NTEU represents some 150,000 employees in 25 agencies and departments.