AP Online

December 4, 2001 Tuesday

SECTION: WASHINGTON DATELINE

Bush Considers Raising Debt Limit

by ALAN FRAM; Associated Press Writer

DATELINE: WASHINGTON

The Senate probably won't consider raising the government's borrowing limit in the waning weeks of this year's session, despite the Bush administration's wishes, a top Democrat says.

"To try to raise that in the last days of the session, when we have an agenda that is overflowing, just on a common sense basis doesn't add up to me," said Senate Budget Committee Chairman Kent Conrad, DN. D.

Conrad said congressional aides have been approached by Bush administration officials about boosting the current $5.95 trillion debt limit. Federal borrowing authority has not been increased since 1997, as a string of four straight budget surpluses under President Clinton was beginning, making the request a source of potential embarrassment for Bush. Talk of raising the limit is also the latest indication of the federal budget's declining health.

Administration officials have made no formal request but have said that without action, the current limit could be breached by March, congressional aides said Monday on condition of anonymity. The officials say that if the economy continues to weaken, the ceiling could be hit by mid-February.

Pushing the new debt ceiling through Congress in this year's final hectic weeks could benefit the administration by lessening the attention the effort would receive. But quick action would be difficult, congressional aides of both parties agreed.

Democrats would probably use debate over the request to draw attention to what they say has been fiscal mismanagement by President Bush, including his push for this year's tax cut. It could be especially tempting for them to delay that debate until early next year, as campaigning intensifies for the November 2002 elections for control of Congress.

White House budget chief Mitchell Daniels acknowledged last week that annual budget deficits are likely for at least the next three years. Daniels blamed the return of deficits on the recession and the costs of waging war in Afghanistan and battling terrorism at home.

Democrats said the fiscal picture has worsened because of the $1.35 trillion, 10-year tax cut that Bush pushed through Congress last spring, and would get worse with additional tax cuts the GOP wants in economic stimulus legislation.

"They dug a hole with their tax cuts," said Thomas Kahn, Democratic staff director of the House Budget Committee. "They're now digging the hole deeper, and now they want us to throw them a rope" by raising the debt limit.

Administration officials have made no specific requests about how high they would raise the debt limit. But they have said an increase of $750 billion to $800 billion would be enough to preclude an additional increase for at least a year, said one congressional aide.

The overall national debt stands at $5.825 trillion - $125 billion below the limit.

Underlining the turnaround in the government's fiscal picture, the Republican-written budget that Congress approved last spring forecast that the current $5.95 trillion ceiling would be sufficient until 2009.

But the string of growing surpluses now seems certain to have disappeared, driving up federal borrowing needs.