Rutherford ready to defend state assets if debt deal isn’t reached

(WJBC file photo)

The state treasurer is planning to pull state assets out of treasury bonds if there’s no increase in the debt limit.

We’re talking about $3.6 billion in state funds – that’s the portion of the state’s $10 billion investment portfolio that will become liquid and require re-investment within 30 days – and $3.2 billion in municipal funds invested by the treasurer’s office.

Treasurer Dan Rutherford says he’s looking for safety. Treasury bonds have traditionally been safe, but they will become risky instruments if there’s no debt ceiling increase by next week.

“It is imperative for me to safe-keep the state treasury as opposed to looking for something that might have a return, and this is what we’re looking at if for some reason the debt ceiling is not raised,” Rutherford said.

Rutherford says treasury bonds will pay almost zero interest if there’s no debt ceiling increase, so he’ll put the money in non-interest bearing accounts that are FDIC insured.