National debt near $7.4 trillion ceiling

October 05, 2004|Associated Press

WASHINGTON -- The government is poised to hit the national debt's $7.4 trillion ceiling this month, and yesterday the Bush administration told Congress again that it should raise the limit.

That would be a politically sticky move just weeks from the Nov. 2 elections.

Rob Nichols, Treasury Department spokesman, said the government is on track to reach the limit early this month. He said that the forecast is made "on a day-to-day basis" and that Congress would be notified.

The government can juggle accounts to stay under the limit through mid-November to avoid default, as it has in the past. But the Bush administration is urging Congress, which expects to adjourn Friday, to raise the ceiling.

"We've been calling on Congress to act now for months, and we think it's important that they do so," Nichols said.

The government's debt was $7.364 trillion as of Friday. Congress last boosted the limit in May 2003.

Democrats have cited the rising debt as evidence that President Bush is mishandling the economy.

The administration counters that the wars in Afghanistan and Iraq and efforts to strengthen security at home have forced the increase in government borrowing.

House Democrats sent a letter to Treasury Secretary John Snow yesterday requesting a meeting to discuss the limit, when it would be reached, and what options the department would pursue. The letter was signed by Representatives John Spratt of South Carolina, Charles B. Rangel of New York, and Charles Stenholm of Texas. Democrats said it was their second such letter.

Nichols said Snow intends to respond to both letters soon. Should Congress fail to act before the limit is reached, Snow "would take the appropriate steps to protect the full faith and credit of our government," Nichols said.