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Treasury, Congress exchange words on tactic of borrowing to avert debt

December 26, 1995
Web posted at: 10:00 p.m. EST

WASHINGTON (CNN) -- The Treasury Department asserted Tuesday that it will buck Republican attempts to use the federal debt ceiling to make President Clinton yield in Washington's budget battle.

Bill Archer

Earlier in the day, the chairman of the House Ways and Means Committee, Bill Archer, R-Texas, said that the White House may soon go too far if it keeps borrowing money during the budget stalemate to avoid a U.S. default on its debt.

In a letter to Treasury Secretary Robert Rubin, Archer said that if federal borrowing continues, the Treasury department in February would reach a "crucial crossroads that tests the bounds of legality and constitutionality."

In a stinging response, a spokesperson for Rubin said the Republicans had forced the department to take unusual steps to avert a default.

"These measures ... have been made necessary only because of the majority's insistence on using the debt limit as leverage to force the president to accept their budget priorities," spokesperson Howard Schloss said in a printed statement.

Robert Rubin

Rubin has kept the Treasury from defaulting on the $4.9 trillion debt ceiling by "disinvesting" about $76 billion from two retirement funds administered by the department for federal workers.

Archer's letter specifically targets the Treasury department's intent to withhold a $14.5 billion interest payment to the Civil Service Retirement Fund. Archer claims there is "growing bi-partisan uneasiness about the uncharted waters that you are about to enter."

He wrote that congressional Republicans would view any new steps taken by the administration to "circumvent" the statutory debt limit as being "of an entirely new character" from measures taken so far.

The Republican-led Congress has refused to give the Treasury the power to raise federal borrowing authority -- and thus avert a default -- as it attempts to force Clinton to sign a seven-year balanced budget that meets GOP criteria.

Some museums reopen


Despite the federal shutdown, the Smithsonian National Museum of American History reopened to the public Tuesday, at least temporarily.

The museum had enough money set aside to operate for one week in a limited manner. "We managed to find a way to use very precious trust funds of ours -- not federal funding," said I. Michael Heyman, secretary of the Smithsonian. "We were able to use it in a way so that we could get ample security into the museum and ample custodial services. Of course, none of our curators are in and none of the staffers are in, but we've been able to open the museum."

Tourists in the nation's capital for the holidays were happy at the chance to visit the museum.(162K AIFF sound or 162K WAV sound)

The National Air and Space Museum, the IMAX theater and the Einstein Planetarium also opened Tuesday. But all other Smithsonian museums, the National Zoo, and other Smithsonian facilities will remain closed until the federal budget impasse is resolved.

Federal workers try to stage 'work-in'

protesting workers

Meanwhile, about 100 furloughed federal workers Tuesday protested the partial federal shutdown inside the Social Security Administration's national headquarters in Woodlawn, Maryland.

Union leaders had said employees would stage a "work-in" by going to their desks to start working. But the union officials said employees were able only to gather in an auditorium before they were asked to leave about 15 minutes later.

However, Social Security officials said no one was ordered out, even though federal law prohibits the employees from volunteering their services.

Thousands of "non-emergency" federal employees have been idle since December 16 because of the federal budget impasse.

"It's absurd. We have a good staff of people where I work in systems," said one federal worker. "This is just shutting us down to the point where people lose initiative and I'm disturbed by it." (230K AIFF sound or 230K WAV sound)

Workers will hold another demonstration later in the week, said John Gage, president of the American Federation of Government Employees Local 1923 in Baltimore.

"We have tremendous work to do and this shutdown is a body-blow to the agencies," Gage said. "We're trying to put some common sense into this. We want to work and there's a lot of work to be done."

Negotiations to reopen the federal government are set to resume Wednesday.

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