By YOUNG MONEY Staff
3 August 2011

Although a possible resolution to the U.S. government debt crisis surfaced on August 1 when the House of Representatives' passed a bill raising the federal debt ceiling, the issue's effects were felt right up to the day of that vote.

Billions in consumers' 401(k) assets were shifted from stocks to bonds during the past week of July 25-31 and continuing into August 1 , according to Associated Press (AP). The firm Aon Hewitt, tracking 401(ks) for 4.7 million workers, noted that 95 percent of the assets were transferred from stocks to stable value funds and other fixed-income investments.

The past Thursday, July 28, marked $900 million in traded 401(k) assets, far above Aon Hewitt's stated average of $300 to $400 million. The firm stated that the amount transferred since July 25 was the third-highest volume of assets traded in such a time period in the nearly 14 years it has been tracking data.

Pam Hess, director of retirement research for Aon Hewitt, told the news source, "More fear and uncertainty had folks running to the sidelines rather than wanting to weather another one of those downturns."

CBS News stated that the House bill would cut $1 trillion in federal spending in the coming decade and create a congressional committee tasked with reducing deficit even further.