Treasury Secretary Paulson urges Congress to boost debt limit

[GrGr]

Treasury Secretary Paulson urges Congress to boost debt limit

The Associated Press
Published: July 30, 2007IHT


WASHINGTON: Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion (?6.56 trillion).

Paulson, in a letter to lawmakers, estimated the government is likely to bump into the statutory debt limit in early October.

"Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible," Paulson wrote. He did not say how much more borrowing authority the Bush administration needs.

Congress has already boosted the statutory debt limit several times during President George W. Bush's tenure. The last time Congress upped the government's borrowing authority was in March 2006 when it agreed to raise the debt ceiling by $781 billion (?571.8 billion).

Boosting the debt limit is more a matter of politics than economics.

Economists doubt Congress will refuse to raise the limit. A federal default is considered unimaginable because it would rattle bond markets, force interest rates higher and shake the economy.

Democrats have blasted the administration for ratcheting up the government's borrowing needs, while they deal with bloated budget deficits; they contend the greater borrowing needs show Bush's fiscal mismanagement.

The administration, however, has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.

In the past, Treasury has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority. Paulson argued against being forced to use such measures, saying they "would create unnecessary uncertainty for the financial markets and result in costs to the government." Such actions, he said. "should be reserved only for extraordinary circumstances, and should be avoided."

Separately, the government expects to borrow $73 billion (?53.4 billion) in the July-to-September quarter, which would be more than previously forecast, the Treasury Department said.

The new estimate is $31 billion (?22.7 billion) higher than a projection made in April. The department partly blamed increased government spending for the new, larger quarterly borrowing projection. It comes as the department considers the government's financing needs, which it does on a quarterly basis.

So looks like the US will break the $ 9 trillion barrier.

 

[techs]

IIRC by this time we should have reduced our debt to about 2 trillion.
Then Bush and Republicans gained power.....

 

[bctbct]

Are we out of money again?

 

[EagleKeeper]

Congress controls the purse.

What types of standoff will they try to force on Bush and who will blink first?

 

[RightIsWrong]

Maybe it's just me, but shouldn't we lower the debt instead of raise the ceiling on debt?

 

[piasabird]

Just freeze the funds and send all the federal workers home without pay. Start with the people in DC writing the checks.

We can not make passports fast enough with all this new legislation.

Lets see . . .
No SSN Checks
No Federal Retirement checks
Close the VA Hospitals
Tell the FBI to take a holiday
Close the National Parks and monuments
Tell the coast guard and the border patrol to just let the drugs come through.
Where does all that money go?

 

[Pens1566]

Originally posted by: piasabird
Just freeze the funds and send all the federal workers home without pay. Start with the people in DC writing the checks.

We can not make passports fast enough with all this new legislation.

Lets see . . .
No SSN Checks
No Federal Retirement checks
Close the VA Hospitals
Tell the FBI to take a holiday
Close the National Parks and monuments
Tell the coast guard and the border patrol to just let the drugs come through.
Where does all that money go?

Haliburton