This is according to a letter to lawmakers from Treasury Secretary Jacob Lew.
This is one in a slew of "extraordinary measures" announced earlier in the month by Lew, to help the government continue functioning until at least September 2 without borrowing any new funds, as Congress refuses to raise the debt limit.
Starting Friday, the Treasury will stop reinvesting "G funds" – non-negotiable short term Treasury bonds.
The measure will give the government maneuvering room to the tune of $160-billion, a Treasury official said on condition of anonymity, adding that federal retirees will not be affected.
The measure had already been implemented during previous budget impasses, according to the official without giving further details.
On May 21, the Treasury Department started temporarily suspending investments in other public pension funds, to a much lesser amount.
Raising the cap on borrowing – which is currently set at $16.7-billion – is up to Congress, which uses it as leverage in budget negotiations. – Sapa-AFP