The debate in the U.S. Congress over the federal government’s debt, which has caused intense political polarization and has led experts to warn of a possible default on the debt by August 2, has not caused those with investments in 401(k) and other retirement plans to panic, according to the Casa Grande Dispatch.
At major 401(k) firms such as the Vanguard Group and Charles Schwab & Co, company representatives have claimed not to see any significant level of withdrawal from accounts on the part of their clients. Others, such as Profit Investment Management CEO Eugene Profit, feel that this will depend entirely on the progress of the debt debate.
Profit told the Dispatch that if default becomes likely, “some investors will throw in the towel or think they’re better served with their money under their mattress.”
Regarding the debate’s progress, The Associated Press (AP) reports that on July 19th, the House of Representatives passed a bill cutting the federal budget by $6 trillion while raising the federal debt ceiling. The bill still awaits Senate approval, and President Barack Obama has publicly stated his intent to veto it, should it make it through the Senate.