Congress Extends Debt Ceiling for 1 Week
The Senate and House approved an emergency one-week increase in the national debt ceiling Wednesday, an extension needed to prevent the nation from running out of money and defaulting on its obligations by midnight tonight.
The legislation, which was signed into law by President Reagan, maintains the debt ceiling at $2.3 trillion through Aug. 6, while the Senate continues to debate a longer-term extension.
House members approved the debt extension on a 263-155 vote. The Senate approved the measure early in the evening on a voice vote.
Warns of Economic Calamity
If Congress had failed to extend the debt ceiling--technically, the amount of money the government can borrow to keep operating--there would be “a global economic and financial calamity,” said Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee.
By law, the debt ceiling would have shrunk to $2.1 trillion, he explained, and the sudden shortfall in money would have caused the federal government to begin defaulting on loan payments, Social Security and veterans benefits checks and many other obligations, he said.
In recent years, Congress invariably has waited until the last minute before approving emergency extensions of the debt ceiling, usually because of partisan wrangling over budgetary issues. Democrats and Republicans said it is unthinkable that the nation would default on its obligations, but that has not stopped them from delaying action--sometimes until only hours before the debt ceiling is set to expire.
“We go through this every year,” Sen. J. Bennett Johnston (D-La.) complained. “You’d think we’d find a way to put all this behind us once and for all because the issue is so important.”
Last week, the House approved a bill increasing the debt ceiling for seven days, but the issue never came to a vote in the Senate. Democrats and Republicans, jockeying for political position on budgetary reform issues, tried and failed to amend the bill with competing proposals to strengthen the Gramm-Rudman deficit reduction law.
Those amendments would have required lawmakers to make automatic budget cuts each year until the federal deficit is eliminated. Both sides said they did not want to increase the debt ceiling without taking a crack at reducing the nation’s $187-billion deficit.
Senate Democrats and Republicans announced late Wednesday that they had agreed on a plan to implement the automatic budget cuts and predicted passage by the Senate today. The plan calls for a reduction in the budget deficit to $150 billion next year and envisions a balanced budget by 1992.
If the House agrees to the plan, lawmakers expect to approve yet another extension of the debt ceiling next week, this one lasting at least through Oct. 1. Some senators, however, hope to make the extension much longer, perhaps even for several years.
“We think that’s a practical and achievable goal,” Sen. Pete V. Domenici (R-N.M.) said. “We don’t want to keep wrestling with this issue all the time.”