Bush urges House lawmakers to increase debt ceiling
As House and Senate leaders remain at a standoff on how to address a debt limit increase, President Bush Tuesday wrote House Speaker Dennis Hastert, R-Ill., urging him and House Minority Leader Dick Gephardt, D-Mo., "to show the same spirit of bipartisan cooperation that Senate Majority Leader Tom Daschle, D-S.D., and Senate Minority Leader Trent Lott, R-Miss., showed two weeks ago" when the Senate passed its free-standing measure to increase the debt limit by $450 billion.
House leaders are still insisting that the debt limit be attached to the fiscal 2002 supplemental, while the Senate insists that House leaders pass its bill. Treasury Department officials have said they need a debt limit increase by Friday to prevent a default.
In his letter, Bush said steps taken so far by Treasury officials to avoid the crisis "are only temporary measures, not an excuse for Congress to fail to fulfill its duties." The letter continues, "As we fight for freedom, we must not imperil the full faith and credit of the United States government and the soundness and strength of the American economy."
House Majority Leader Dick Armey, R-Texas, lamented Tuesday that Congress' failure to raise the debt ceiling is "not a desirable situation, not a happy situation." Armey said House Republicans still lack the GOP votes needed to pass a separate debt limit increase and he sees no other avenue to raising the ceiling other than attaching it to the supplemental. Armey complained that House Democrats, particularly members of the Blue Dog Coalition, are not being helpful by insisting on passing a short-term increase while calling for a "budget summit" to deal with long-term budget questions.
Armey acknowledged the House could break for the July Fourth recess without increasing the debt limit, but suggested pressure might build at home. "An awful lot of members would come back after the Fourth of July break with a whole new attitude about their desire to see it get done," he said.
A Treasury official said the administration remains confident Congress will raise the debt limit ceiling before it leaves for the July Fourth recess. But the official said two measures Treasury Secretary Paul O'Neill can take to circumvent the problem-temporarily suspending investments in the Civil Service Retirement and Disability Fund and the so-called G-Fund-would be exhausted if Congress fails to act by June 28. On that date, Treasury must pay $67 billion to Social Security and other federal trust funds. A May 14 statement issued by Treasury says the two funds would provide $44 billion. The official would not comment on other options, or whether such options would be needed to meet the June 28 payment.
But there is further trouble not far down the road. Treasury is obligated to make another $54 billion in payments to trust fund and other federal beneficiaries between July 1-3. The May 14 statement lists two additional measures-suspension of investments in the Exchange Stabilization Fund and a swap of non-Treasury securities held by the Federal Financing Bank for CSRDF securities. These maneuvers could provide an additional $36 billion, the statement indicates. "Treasury will do everything in its power to preserve and protect the full faith and credit of the United States," the Treasury official said.
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