House Passes Own Balanced Budget Plan

The Democrat-led House challenged the GOP-controlled Senate today by passing its own plan to balance the budget, continuing a political squabble that could force the government to sell off Social Security assets to keep checks from bouncing.

In a virtual party-line 249-180 vote, the House approved a Democratic plan that supporters said would do the job faster than a Senate-passed proposal while doing more to protect the needy from spending cuts.

However, the vote did nothing to ease the government’s credit crisis that was forcing the Treasury Department to redeem securities in the Social Security trust funds to keep money in the federal till.

Borrowing Authority

The balanced budget plan is an amendment to legislation raising the national debt limit--the government’s borrowing authority--from the current $1.824 trillion to more than $2 trillion.

The House action threw the issue back to the Senate. Republican leaders there indicated that they would not accept the House plan, leaving it doubtful anything would be done before a midnight deadline for restoring the government’s borrowing authority.

Treasury Department spokesman Arthur Siddon said there was an absolute deadline for action of midnight tonight.

“If we don’t have an increase in the debt ceiling by midnight, we will have to disinvest (Social Security) funds,” he said.

Jim Brown, a Social Security Administration spokesman, emphasized that beneficiaries will not be affected by the government’s credit problems.

‘Checks Are Good’

“The (Social Security) checks will be delivered today to the 37 million Social Security beneficiaries and to the 4 million Supplemental Security Income recipients,” Brown said. “Those checks are good.”

But White House Budget Director James C. Miller III said that if the congressional impasse continues, the government will be flat broke sometime around Nov. 15, and that the President stands ready to close federal agencies and send employees home.

“If there is no congressional action, the President will be forced to shut the place down,” Miller said. “The checks will bounce. This is something we all hope to avoid.”

Leaders in both chambers agreed that there was no way to garner enough votes to increase the debt limit without an accompanying gesture to cut government red ink.