The White House Bulletin

February 20, 2002

SECTION: IN THE WHITE HOUSE AND AROUND TOWN

Debt Limit Causing Friction Between House Republicans And Administration.

The Bush Administration has already signaled that it believes the nation's debt limit needs to be adjusted higher in order for the government to meet its obligations, particularly Social Security checks, beginning next month. However, most members of Congress are not eager to cast a vote in an election year raising the debt limit, and a number of House Republicans are pressuring the Administration to figure out some short-term debt management mechanisms that will tide the government over until April 15, when tax payments flood Treasury's coffers.

Said to be under consideration on the Hill are ideas like a temporary debt limit increase or a temporary use of the Federal Employee Pension System to cover shortfalls until April 15. House Republicans have also been working on analytical pieces that single out "intra-government" debt as the culprit, and contend that can be treated differently than publicly-held debt. That reaction is causing some consternation inside the Administration, which does not want to engage in any kind of complex accounting procedures while the Enron story dominates the media. One Administration official noted, "Even if you could do something like that, we would only have enough to carry through July. Would they rather have that [debt limit] vote closer to Election Day?"

Moreover, some in the Administration and other GOP strategists see the debt limit bill as a political/legislative opportunity in two ways. One, as must-pass legislation, a bill raising the debt ceiling would be used to pull along other legislation, like a supplemental spending bill. Alternatively, it could become the vehicle for a new variation of a stimulus bill, including unemployment insurance and perhaps some small tax items like extenders.

Two, some Republicans see an opportunity for political jujitsu. Expecting that Democrats will "play politics" with the debt limit bill, Republicans are already contemplating ways of capitalizing on that. For example, should Democrats try to move items on the debt limit bill that would never make it through the Congress in normal order, Republicans may position themselves as the defenders of Social Security benefits that Democrats "imperil" with unrelated legislation.