sedan
03-08-2006, 01:53 PM
Posted on Tue, Mar. 07, 2006
Higher national debt ceiling urged
By Martin Crutsinger Associated Press WASHINGTON
Treasury Secretary John Snow notified Congress yesterday that the administration had taken "all prudent and legal actions," including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national-debt limit.
In a letter, Snow urged lawmakers to pass a new debt ceiling immediately to avoid what would be the nation's first default on its obligations.
"I know that you share the President's and my commitment to maintaining the full faith and credit of the U.S. government," Snow wrote to House and Senate leaders.
Treasury officials said in briefing congressional aides last week that the government would run out of maneuvering room to keep from exceeding the limit sometime during the week of March 20.
Snow told lawmakers that the Treasury Department would begin tapping the Civil Service Retirement and Disability Fund, which Treasury officials said would provide a "few billion" dollars in extra borrowing ability.
Treasury officials also announced that on Friday they had used the $15 billion in the Exchange Stabilization Fund, a reserve that is normally used to smooth out dollar volatility in currency markets.
The Treasury also has been taking investments out of a $65.3 billion government pension fund known as the G-fund.
Officials have said that once the debt limit was raised, the investments taken out of the pension funds would be replaced and any lost interest payments would be made up. The formal title for the G-fund is the Government Securities Investment Fund of the Federal Employees Retirement System.
Democrats hope to use the forthcoming debate over raising the debt limit to highlight what they see as the failings of the administration's economic program with its emphasis on sweeping tax cuts.
A default, a situation when the government misses making payments to current bondholders, is a doomsday scenario considered highly unlikely given what it would do to the government's credit rating.
It is expected that, after intense debate, Congress will approve an increase in the debt limit by perhaps $781 billion.
The administration has sent Congress a budget that on paper would cut the deficit in half by 2009, the year President Bush leaves office.
But Democrats contend that the administration met its deficit-reduction goal only by leaving out major spending items such as the full costs of the Iraq war. They say the deficit will not improve unless Bush abandons his effort to make his first-term tax cuts permanent.
http://www.philly.com/mld/inquirer/business/14034495.htm
Higher national debt ceiling urged
By Martin Crutsinger Associated Press WASHINGTON
Treasury Secretary John Snow notified Congress yesterday that the administration had taken "all prudent and legal actions," including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national-debt limit.
In a letter, Snow urged lawmakers to pass a new debt ceiling immediately to avoid what would be the nation's first default on its obligations.
"I know that you share the President's and my commitment to maintaining the full faith and credit of the U.S. government," Snow wrote to House and Senate leaders.
Treasury officials said in briefing congressional aides last week that the government would run out of maneuvering room to keep from exceeding the limit sometime during the week of March 20.
Snow told lawmakers that the Treasury Department would begin tapping the Civil Service Retirement and Disability Fund, which Treasury officials said would provide a "few billion" dollars in extra borrowing ability.
Treasury officials also announced that on Friday they had used the $15 billion in the Exchange Stabilization Fund, a reserve that is normally used to smooth out dollar volatility in currency markets.
The Treasury also has been taking investments out of a $65.3 billion government pension fund known as the G-fund.
Officials have said that once the debt limit was raised, the investments taken out of the pension funds would be replaced and any lost interest payments would be made up. The formal title for the G-fund is the Government Securities Investment Fund of the Federal Employees Retirement System.
Democrats hope to use the forthcoming debate over raising the debt limit to highlight what they see as the failings of the administration's economic program with its emphasis on sweeping tax cuts.
A default, a situation when the government misses making payments to current bondholders, is a doomsday scenario considered highly unlikely given what it would do to the government's credit rating.
It is expected that, after intense debate, Congress will approve an increase in the debt limit by perhaps $781 billion.
The administration has sent Congress a budget that on paper would cut the deficit in half by 2009, the year President Bush leaves office.
But Democrats contend that the administration met its deficit-reduction goal only by leaving out major spending items such as the full costs of the Iraq war. They say the deficit will not improve unless Bush abandons his effort to make his first-term tax cuts permanent.
http://www.philly.com/mld/inquirer/business/14034495.htm