washingtonpost.com: Treasury Moves to Avoid Piercing Debt Limit
washingtonpost.com
Treasury Moves to Avoid Piercing Debt Limit
By Laura MacInnis
Reuters
Thursday, October 14, 2004; 12:59 PM
The U.S. Treasury Department tapped into a federal employee pension fund Thursday as a stop-gap measure to keep the government below its $7.384 trillion borrowing limit, Treasury Secretary John Snow said in a letter to Congress.
Congress adjourned for an election break last weekend without raising the politically sensitive limit. Snow said it was critical that lawmakers raise the debt ceiling when they return on Nov. 16.
"Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November, at which time all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted," he said.
The United States was just $10 billion below its legal borrowing limit as of Tuesday, according to the latest data.
Snow said the Treasury Department would stop investing in the $56 billion Federal Employee Retirement System's Government Securities Investment Fund, known as the G-fund, as a means to keep issuing debt in the near-term.
"Such a suspension action has been taken in the past by my predecessors and by me," Snow said. He said the funds would be restored once Congress raises the debt ceiling.
Congress has already increased the debt limit twice during the Bush administration's tenure, in 2002 and 2003.
Republicans in Congress avoided a vote on a debt ceiling increase before next month's presidential election, as it would have likely drawn Democratic criticism about President
Bush's huge budget deficits.
"Rep. John Spratt of South Carolina, the top Democrat on the House Budget Committee, said Thursday's announcement was "the latest in bad fiscal news resulting from Republican mismanagement of the budget."
"When this administration took office, it claimed that the debt limit would not be reached until 2008, even if the administration's tax cuts and other policies were implemented," Spratt said in a statement.
"Instead, largely as a result of the tax cuts proposed by the administration and enacted into law by Congressional Republicans, the debt limit now will have to be raised for the third time in three years," he said.
The White House said in July it expects the budget deficit for fiscal 2004, which ended Sept. 30, to be about $445 billion, the largest on record. Treasury is expected to release the year-end data in the next few days. The previous record deficit was $374 billion, set in fiscal 2003.
Congressional aides have suggested the debt limit increase might be attached to another bill when lawmakers return to session, but have not said which one.
Democrats were angered earlier this year when Republicans tried to sneak the debt limit through on a spending bill and it was eventually removed.
Treasury spokeswoman Brookly McLaughlin said the next quarterly refunding announcement, set for Nov. 3, is not expected to be delayed due to debt limit concerns.
(Additional reporting by Anna Willard)
washingtonpost.com: Treasury Moves to Avoid Piercing Debt Limit
Treasury Moves to Avoid Piercing Debt Limit
By Laura MacInnis
Reuters
Thursday, October 14, 2004; 12:59 PM
The U.S. Treasury Department tapped into a federal employee pension fund Thursday as a stop-gap measure to keep the government below its $7.384 trillion borrowing limit, Treasury Secretary John Snow said in a letter to Congress.
Congress adjourned for an election break last weekend without raising the politically sensitive limit. Snow said it was critical that lawmakers raise the debt ceiling when they return on Nov. 16.
"Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November, at which time all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted," he said.
The United States was just $10 billion below its legal borrowing limit as of Tuesday, according to the latest data.
Snow said the Treasury Department would stop investing in the $56 billion Federal Employee Retirement System's Government Securities Investment Fund, known as the G-fund, as a means to keep issuing debt in the near-term.
"Such a suspension action has been taken in the past by my predecessors and by me," Snow said. He said the funds would be restored once Congress raises the debt ceiling.
Congress has already increased the debt limit twice during the Bush administration's tenure, in 2002 and 2003.
Republicans in Congress avoided a vote on a debt ceiling increase before next month's presidential election, as it would have likely drawn Democratic criticism about President
Bush's huge budget deficits.
"Rep. John Spratt of South Carolina, the top Democrat on the House Budget Committee, said Thursday's announcement was "the latest in bad fiscal news resulting from Republican mismanagement of the budget."
"When this administration took office, it claimed that the debt limit would not be reached until 2008, even if the administration's tax cuts and other policies were implemented," Spratt said in a statement.
"Instead, largely as a result of the tax cuts proposed by the administration and enacted into law by Congressional Republicans, the debt limit now will have to be raised for the third time in three years," he said.
The White House said in July it expects the budget deficit for fiscal 2004, which ended Sept. 30, to be about $445 billion, the largest on record. Treasury is expected to release the year-end data in the next few days. The previous record deficit was $374 billion, set in fiscal 2003.
Congressional aides have suggested the debt limit increase might be attached to another bill when lawmakers return to session, but have not said which one.
Democrats were angered earlier this year when Republicans tried to sneak the debt limit through on a spending bill and it was eventually removed.
Treasury spokeswoman Brookly McLaughlin said the next quarterly refunding announcement, set for Nov. 3, is not expected to be delayed due to debt limit concerns.
(Additional reporting by Anna Willard)
washingtonpost.com: Treasury Moves to Avoid Piercing Debt Limit
posted by Gary at 9:41 AM
<< Home