House Approves Bill to Raise Debt Limit; Fiscal Crisis Averted

Associated Press

The House today approved and sent to President Reagan a bill temporarily refilling the Treasury's empty coffers with borrowed money, apparently averting a government financial crisis Friday.

The House, by voice vote and without debate, accepted the Senate's version of a short-term increase in the government's debt limit.

The bill avoids potential embarrassment for the President as he leaves for his summit with Soviet leader Mikhail S. Gorbachev. Reagan has indicated through a spokesman that he will sign the legislation.

White House Warning

The White House warned Wednesday that unless the Treasury has the power to borrow more money, the government will stop paying its bills Friday.

"We are not going to issue checks that will bounce," presidential spokesman Larry Speakes said.

The Administration supports permanent legislation raising the national debt ceiling to $2.078 trillion--more than twice the red ink of when Reagan took office in 1981 and enough to last through another $200-billion deficit year.

Still, the President was ready to sign a short-term debt hike.

"The President accepts the obvious sentiment of both houses of Congress," White House spokesman Edward Djerejian said Wednesday night. "But he will continue to urge Congress to deal with our federal deficit once and for all."

Senate Refuses

The Republican-led Senate, with White House support, has refused to raise the debt ceiling above the $2-trillion threshold without attaching a plan to gradually end the annual deficits.

To keep up the pressure for the balanced-budget plan, the Senate on Wednesday night approved extending the debt ceiling only until Dec. 6, rejecting the Dec. 13 date passed earlier in the day by the House. Both houses passed measures for $80 billion in new borrowing, but by cutting off that authority earlier, the Senate bill brings about the next crisis sooner.

The Senate had been resisting a short-term bill altogether, but the opposition melted for fear of embarrassing the President on the eve of the summit. Reagan leaves on Saturday, the day after the money crunch would have hit the federal bureaucracy.

"We believe that we can't have a cloud of fiscal collapse hanging over the President's head as he goes to Geneva," said Sen. Phil Gramm (R-Tex.), co-sponsor of the balanced-budget plan.

The Senate, by voice vote, sent the short-term debt bill back to the House in a package with other measures also due to expire at midnight tonight, including extending the 16-cent-a-pack federal tax on cigarettes through Dec. 14.

The House had approved the debt hike separately from the cigarette tax and some other extensions needed while permanent bills are pending.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World