Treasury halts investment in retirement fund due to debt limit

The federal government has stopped fully investing in a retirement fund for federal employees due to reaching its $16.4 trillion borrowing limit.

Treasury Secretary Timothy Geithner told congressional leaders Tuesday that he is no longer able to fully invest in the "G Fund" of the retirement system for federal employees.

The move is one of the "extraordinary measures" Geithner is currently employing to free up funds, since the government can no longer issue new debt after reaching the debt ceiling on Dec. 31. When the government can no longer borrow funds, these measures allow it to meet vital obligations for a period of time, giving Congress time to hike the borrowing cap. 

Geithner warned lawmakers in a separate letter Monday that the government will no longer be able to meet all its obligations as soon as mid-February, and criticized any lawmaker seeking to use the nation's full faith and credit as a way to gain political leverage.

By law, federal employees will be made whole on any missed investments once the debt limit is increased, he added Tuesday.

"Federal retirees and employees will be unaffected by this action," he wrote.