Debt Ceiling

Next up in the budget battle:
playing the debt-ceiling card

January 27, 1996
Web posted at: 10:45 p.m. EST

From Correspondent Kathleen Koch

WASHINGTON (CNN) -- The government is up and running Saturday, thanks to a short-term spending bill signed by President Clinton Friday night. The measure keeps unfunded departments and programs going until March 15, many with reduced spending levels. The next hurdle in the continuing budget negotiations is raising the debt ceiling, which the president insists is a must.

The United States has hit its debt ceiling of $4.9 trillion, and Treasury Secretary Robert Rubin says that around March 1 the government will run out of borrowing power.

Pres. Clinton

In his Saturday radio address, Clinton called on Congress to stop playing politics on the issue. The consequences of default, he said, are grave.

"Interests rates could also go up for businesses, consumers, and homeowners. And for tens of millions of Americans, the unthinkable could happen. The Social Security checks they count on would not be able to be mailed out," Clinton said.

Alice Rivlin

Budget director Alice Rivlin said that's no exaggeration. "If we do not raise the debt limit, the Treasury will not be able to pay the Social Security checks. That is a fact," she said.

During debate over keeping the government funded, Republicans assured jittery financial markets that they will vote to raise the debt ceiling.

Sen. Gregg

But in its radio address Saturday, the GOP said giving the government a blank check is unacceptable. "It is wrong -- immoral, really -- to be borrowing against our children's future. The national debt is $5 trillion. A child born today will have to pay $187,000 just in interest on the national debt," said Sen. Judd Gregg, R-New Hampshire.

Republicans vow any debt-ceiling bill will have strings attached, advancing their agenda. "We have to negotiate what can we put on a debt ceiling that helps us start to lower the deficit and move towards a balanced budget," said House Speaker Newt Gingrich.

Republicans are promising cooperation, but their scheduling could push the debt ceiling issue to a critical point.

Congress is to adjourn next week until February 26, just days before the government is likely to default.

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