Bush may tap retirement funds to avoid hitting debt ceiling

The Bush administration may borrow billions of dollars from federal employee retirement funds, temporarily eliminating the need for Congress to raise the debt ceiling and helping Republicans sidestep a public relations thicket.

According to several sources familiar with the issue, Treasury Secretary Paul O'Neill, who has the authority to tap federal retirement kitties to meet federal obligations, is likely to act on the idea. The move would be a temporary measure that would not jeopardize the retirement accounts, Republicans said. The funds would have to be repaid, with interest.

According to a House Republican leadership aide, Treasury officials presented several options to House leaders last week for tapping retirement funds.