FROM THE OFFICE OF PUBLIC AFFAIRS

April 2, 2002

The Honorable Dennis Hastert
Speaker of the House
United States House of Representatives
Washington, D.C. 20515

Dear Mr. Speaker:

Since December, I have written Congress three times requesting an increase in the statutory debt limit. Unfortunately, the debt limit has not yet been raised.

I regret that I must inform Congress that, pursuant to 5 U.S.C. § 8438(h)(2), it is my determination that by reason of the public debt limit I will be unable to fully comply with the requirements of 5 U.S.C. § 8438(e), beginning on April 4, 2002 and ending on or about April 18, 2002. This statute provides for the investment of the Government Securities Investment Fund ("G-Fund") of the Federal Employees Retirement System in special interest-bearing Treasury securities; it also grants the Secretary of the Treasury explicit authority to suspend this G-Fund investment to avoid breaching the statutory debt limit. Such a suspension action was taken in 1995 by then-Treasury Secretary Rubin.

G-Fund beneficiaries are fully protected and will suffer no adverse consequences from this action. The statute ensures that once the Secretary of the Treasury can make the G-Fund whole without exceeding the public debt limit, he is to do so. Under the governing law in this case, the G-Fund will receive complete restoration of all funds temporarily affected by this necessary action, including full and automatic restoration of any interest that would have been credited to the Fund. In short, the result on the G-Fund and its beneficiaries will be the same as if this temporary action had never taken place.

I know that you share the President's and my commitment to maintaining the full faith and credit of the U.S. government, especially at this critical time. Together we must continue working to enact an increase in the statutory debt limit as quickly as possible to avoid any negative repercussions at home or abroad.

Sincerely,

Paul H. O'Neill