Gingrich Retracts Offer to Lift Debt Limit, Fearing ‘Trick’

House Speaker Newt Gingrich (R-Ga.) backed away Wednesday from an offer to temporarily extend the government’s borrowing authority, saying Clinton Administration warnings of a crisis by Halloween could not be trusted.

In the latest exchange in a war of nerves, the Georgia Republican said Treasury Secretary Robert E. Rubin’s projections that the federal debt limit would be reached Oct. 31 could be “a Halloween trick to try to scare people.” Before agreeing to raise the debt ceiling for even a short time, Republicans would insist that Rubin provide details on the government’s borrowing needs, Gingrich said.

White House Press Secretary Mike McCurry, expressing Administration chagrin, said the standoff over federal borrowing “is now apparently going to be a crisis because Congress won’t act to extend the debt ceiling.”

Both sides know that neither would benefit if a failure by President Clinton and Congress to break the impasse leads to an unprecedented default.

The likely results of a default would include higher interest rates, tumult in the financial markets and possibly greater interest in a third-party presidential candidate.

Nonetheless, Republicans plan to tie the debt-limit increase to their seven-year package for balancing the budget and cutting spending and taxes.

The Administration, on the other hand, wants to see the debt-limit extension separated from the budget issue, which would make it easier for Clinton to veto the GOP package.

White House officials say that, ideally, they would like to see the debt limit extended until after the 1996 elections, or at least until this Christmas, when the year’s budget work may be completed.

Gingrich and Rubin spoke by telephone Wednesday and agreed to continue discussing their differences, said Treasury spokesman Howard Schloss.

Under current law, the government’s total debt cannot exceed $4.9 trillion.

On Tuesday, the Treasury Department said it would sharply scale back its short-term borrowing plans to help stay within limits.

Shortly afterward, Gingrich said lawmakers would agree to raise the limit until mid-November.

But after meeting with House GOP lawmakers Wednesday, Gingrich said he and Senate Majority Leader Bob Dole (R-Kan.) would consult before deciding whether to support extending the limit until Nov. 14.

“We have no belief the Treasury has accurate figures,” Gingrich told reporters. “We have no belief that Rubin’s advice is anything other than politics.”