Bush seeks to raise U.S. debt limit
CNN Washington Bureau
CHARLOTTE, North Carolina (CNN) -- President Bush, citing the recession and the massive new spending to fight the war on terrorism, urged congressional leaders Wednesday to swiftly increase the nation's legal debt limit, due to expire in late March.
Bush told Congress not to play politics with the debt limit because doing so could inject uncertainty into the bond and stock markets at a time when the U.S. economy is showing signs of recovering, White House Press Secretary Ari Fleischer said.
"We're at war, we've got troops all around the world, we've got men and women whose lives are at risk and now is not the time to be playing politics," Bush said during a stop in Charlotte, North Carolina, to tout his welfare-to-work initiatives and to attend fund-raisers for U.S. Senate candidate Elizabeth Dole and Rep. Robin Hayes, R.-North Carolina.
"We need a good sane policy and I think the members there at breakfast agreed with me. It's happened in the past. Both parties are guilty about playing politics with the debt ceiling," Bush said.
The Treasury Department says the government will exceed its legally allowable debt load of $5.9 trillion in late March. Congress must approve additional borrowing power to allow the government to auction bonds to finance government debt.
Without an extension, the Treasury Department would almost immediately stop selling U.S. savings bonds, Treasury Department spokeswoman Michelle Davis said. Treasury bond auctions would continue for an limited period of time, though they would be conducted with less advance notice, Davis said.
The Treasury Department is seeking $750 billion in additional borrowing to finance government obligations. Davis said that amount is projected to cover anticipated debt financing through fiscal year 2003.
"We know Congress is not eager to do this but it's something that has to be done," Davis said. "I have no doubt that congressional Democrats are going to look for some political gain in this, but they are not going to find any magic bullet."
Ranit Schmelzer, spokeswoman for Senate Majority Leader Tom Daschle, D-South Dakota, said he is committed to voting on a debt ceiling extension before Congress adjourns for its Easter recess in late March. Schmelzer said it was crucial for the House, which must act first, to send a clean debt ceiling bill. That means a bill with no amendments seeking additional tax cuts.
Democrats have criticized the president's tax cut for returning the country to deficit spending, saying that deficit is what is driving the need to boost the debt ceiling.
In Bush's August budget review, the Office of Management and Budget projected the current $5.9 trillion debt ceiling would cover obligations through fiscal year 2003. But the recession and costs associated with the terrorist attacks on September 11 simultaneously drained projected tax revenue and added billions in unanticipated spending, administration officials said.
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