Star Tribune (Minneapolis, MN)

May 28, 2002, Tuesday, Metro Edition

SECTION: NEWS; Pg. 1A

Ceiling on national debt may be raised

by Rob Hotakainen; Staff Writer

DATELINE: Washington, D.C.

Not so long ago, paying down the national debt was considered a good idea in Washington.

But then came a $1.35 trillion tax cut, a war on terrorism and the sudden demise of the federal surplus. Now the government is trying to figure out a way just to pay the bills. "We have deficits as far as the eye can see," said Rep. Robert Matsui, D-Calif., a member of the House Ways and Means Committee. To keep the government solvent, the Bush administration has asked Congress to act by late June to raise the legal limit on the national debt by $750 billion, to $6.7 trillion. Congress is likely to oblige, though no one is happy about it.

"Raising the debt limit is a necessary evil," said Rep. Gil Gutknecht, R-Minn., a member of the House Budget Committee.

But for some opponents of President Bush's 10-year tax cut, it's a tough sell: They say the administration acted recklessly in winning congressional approval last year and is behaving even more recklessly now by trying to make the cut permanent.

"I'll vote against it, because it shouldn't be necessary," said Sen. Mark Dayton, D-Minn. "This administration needs to face up to this crisis it has created through its own fiscal irresponsibility. . . . It's going to get worse, not better."

Last week, House Republicans made it clear that they sympathize with Bush's request but they declined to put the issue to a straight up-or-down vote. Instead, they infuriated Democrats by getting the job done with a complicated procedural vote: They tucked language that would allow a higher debt limit into a rule governing debate on a bill containing money for the war in Afghanistan.

Minnesota's three Republican House members _ Gutknecht and Reps. Jim Ramstad and Mark Kennedy _ supported the back-door approach. But tempers flared among Democrats, who accused Republicans of trying to conceal an embarrassing action. "The next thing, we'll be able to declare war by putting it in a rule and not having to vote on it," said Minority Leader Richard Gephardt, D-Mo.

Rep. Martin Frost, D-Texas, said Republicans were trying to "shield their weak-kneed members from having to vote to put us deep in debt. . . . They do not want a telltale receipt for their spending spree."

Republicans responded by promoting the underlying bill, saying it would provide $14 billion for the war on terrorism. "If you vote no, you ought to know that you are voting against our military," said Speaker Dennis Hastert, R-Ill. But he acknowledged that the legislation would give the president the authority he needs to raise the debt limit.

'A miserable job'

Gutknecht said that Congress has paid down the debt by nearly half a trillion dollars over the past four years but has little choice. "The administration and Republican leaders in the House have done a miserable job of explaining why the debt ceiling has to be raised," he said.

He blamed a "$100 billion shock wave" that hit the budget as a result of the recession, the Sept. 11 attacks and increased spending on security. At the same time, he said, more money is coming into the Social Security and Medicare trust funds than is going out in benefits: "The only thing these trust funds can invest these surpluses in are government bonds _ that drives the debt up."

Minnesota's Democratic senators are of mixed minds on the issue.

Like Dayton, Sen. Paul Wellstone called the tax cut "fiscally irresponsible" but said he would vote to increase the debt limit. "I don't see how you can have the federal government default on its bills _ the payments to farmers, the Social Security payments," he said. "I just think the consequences would be too severe."

Dayton and Matsui, who appeared together at a recent news conference, said the tax cut has wiped out the surplus and is threatening Social Security payments in the years ahead.

"No one wants to have the government default on its debt," Matsui said. "On the other hand, I think the president has to come with a real program as to how we're going to seek a balanced budget."

Dayton said the fiscal situation "is serious now and catastrophic in the years ahead," adding: "There's an aura of complete unreality around Washington now when they're talking about making these tax cuts permanent."

Wellstone said that supporters of the tax cut "should step up to the plate and make some changes." He said supporters of the tax cut argued last year that Congress could pay down the debt, spend more on priorities and cut taxes _ all at the same time. "Obviouslythat's not the case," he said.

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_ Rob Hotakainen is at rhotakainen@mcclatchydc.com.