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Debt near ceiling again { February 20 2003 } Original Source Link: (May no longer be active)    http://www.nytimes.com/2003/02/20/politics/20DEBT.html http://www.nytimes.com/2003/02/20/politics/20DEBT.html February 20, 2003 Federal Debt Near Ceiling; Second Time in 9 Months By EDMUND L. ANDREWS WASHINGTON, Feb. 19 — With budget deficits climbing rapidly, the Bush administration acknowledged today that the government had reached its legal limit on borrowing and would run short of cash by early April unless Congress once again raised the debt ceiling. Because Congress inevitably does raise the ceiling after intense jousting, the announcement will have little, if any, effect on operations. But it highlights the new era of red ink that the government faces even before President Bush's latest proposals for more than $1 trillion in tax cuts over 10 years. Two years ago, administration forecasters predicted large budget surpluses. But the economic slowdown and the faltering stock market sent tax revenues plunging, even as government spending continued to increase. The White House now projects a deficit of more than $300 billion this year and next, as well as deficits for at least the next decade. Democratic lawmakers have begun to attack the administration over raising the borrowing limits. The Blue Dog Budget Watchdog Group, 34 Democrats who emphasize reducing deficits, has created the phrase "debt tax" to discuss the additional interest that will have to paid on the growing debt. Hoping to minimize the embarrassment associated with raising the ceiling, House Republicans reinstituted a rule last month that lets them include such increases in an overall budget resolution. That procedure, which the Democrats used when they controlled the House, lets the party sidestep a separate recorded vote. "They're trying to raise the debt ceiling in the cloak of night rather than in the sunshine of the morning," said Tom Kahn, staff director for Democrats on the House Budget Committee. The Senate does not have a comparable rule, which means that Senate Democrats may be able prolong a fight on the debt ceiling. Congress raised the limit nine months ago by $450 billion, to $6.4 trillion. That was less than the $750 billion increase that Mr. Bush had requested, at least partly reflecting the determination of Democratic lawmakers to make the administration endure a repeat battle as soon as possible and to continue to highlight the return to deficits. Such jockeying has prompted some experts to propose scrapping the ceiling entirely. Alan Greenspan, chairman of the Federal Reserve, told a House hearing last week that having an official ceiling did nothing to force deficit reduction. To make ends meet for the next month or so, the Treasury Department said it would postpone making mandatory contributions to two big investment funds for government employees. Such shuffling tactics can allow the government to keep borrowing money without technically breaching the overall ceiling. But the Treasury Department said the tactics might not be enough to carry the government to the point when new cash starts pouring in from tax returns due on April 15. Treasury Secretary John W. Snow pleaded in a statement today for "prompt action" by Congress. "I know that you share the president's and my commitment to maintaining the full faith and credit of the U.S. government," Mr. Snow said in a letter to Speaker J. Dennis Hastert, Republican of Illinois. Copyright 2003 The New York Times Company | Privacy Policy

Billions in federal lands sold off { December 3 2007 } Budget deficit hits 374b { October 20 2003 } Buffett attacks america as rich spending junkies { March 7 2005 } Buffett makes billions betting against dollar { March 5 2005 } Bush presides over biggest spending since 1990 Cheney says deficits dont matter { January 12 2004 } China holds the mortgage to the dollar { August 31 2005 } China loses faith in dollar Congress approves 1tr debt { May 27 2003 } Debt near ceiling again { February 20 2003 } Fd chair blames long term rates on world savings glut { March 20 2006 } Federal deficit estimated almost another trillion { January 25 2005 } Financial crisis if foreign investors pull out { November 21 2005 } Foreign investors finance US debt by 2b a day Government borrows billion a day { October 8 2004 } Greenspan leaves us with record debt { January 23 2006 } Greenspan warns not to pay down debt { March 22 2001 } Raise debt limit Raises debt limit { June 27 2001 } Republicans raise debt limits to 9 trillion { March 17 2006 } Short term yields above long term in reinversion Snowballing debt awaits taxpayers { December 1 2003 } Treasury needs to raise 8 trillion debt limit { February 2006 } UN calls for asian help US deficits { January 26 2005 } US debt tops 9 trillion for first time { October 2007 } War spending drives record deficit estimate Whitehouse urges raise debt ceiling { May 20 2003 } Files Listed: 27

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