GOP budget plan has a surprise among list of cuts for federal employees [View all]

[mahatmakanejeeves]

GOP budget plan has a surprise among list of cuts for federal employees

The Fed Page

By Joe Davidson Columnist March 29 at 6:47 PM
@JoeDavidsonWP

At budget time, federal employees have come to expect a familiar series of hits from Republicans — shots that can ricochet off the public.
....

Among the policy retreads, there was a surprise in the House package. ... Republicans want to make the most popular employee investment fund in the Thrift Savings Plan (TSP) worthless. To save $32 billion over 10 years, House Republicans propose changing the fund’s interest-rate calculation, because, the resolution says, “those who participate in the G Fund are rewarded with a long-term rate on what is essentially a short-term security.”

Going after the TSP “is a new one,” said Kim Weaver, a TSP spokeswoman who has seen “nothing like this before.”
....

The fund’s current annualized interest rate is 1.88 percent. Adopting the House plan would result in a precipitous interest-rate drop to an annualized 0.01 percent, according to the TSP. ... About 4.3 million people, including current and former federal civilians and members of the military, are invested in the G Fund. If the House gets its way, “it would mean their investment is virtually worthless,” Weaver said.

ETA: full disclosure: I have money in the TSP, and I think a little bit of it is in the G Fund.