Rutherford: Illinois Was Prepared To Deal With Federal Government Default
(CBS) -- The deal on Capitol Hill that avoids default and reopens the federal government is a relief to Illinois Treasurer Dan Rutherford, but he said the state was ready if default occurred.
Rutherford: Illinois Was Prepared To Deal With Fed Default
Rutherford said Wednesday, after the compromise was announced, that he had three priorities -- safety of investment, liquidity and return, and he had $1.2 billion worth of treasury bills due between Thursday and Nov. 5. So, over the past two weeks, he said, his investment team has moved away from treasuries.
"We have the ability for a cash flow of $1.2 billion," he said. "We put it into money market funds. We put it into overnight repurchase. We put it into commercial paper."
He said it has been a couple of busy weeks for his investment team, which is headquartered in Springfield and begins meetings at 6 a.m. each weekday to determine how Illinois will invest its money.
Rutherford said the state will begin to buy T-bills again short-term, although nothing beyond Feb. 7, when this deal runs out. But he said he remains quite concerned about the safety of investments globally and what default could mean on a larger scale, especially to China and Japan, which carry trillions of dollars of U.S. debt.
"I don't want to go into default and I don't want to see a cataclysmic occurrence of the economy on the planet," he said. "Let me just suggest to you as the treasurer of Illinois that would not be a good situation."
He said he won't know for another day or so how much the move to alternative investments cost the state.
Gov. Pat Quinn, in impromptu remarks, said the deal on Capital Hill "didn't resolve anything."
