Dole Calls for Debt-Ceiling Increase to Avert Default

Despite tough talk from House Republicans, Senate Majority Leader Bob Dole (R-Kan.) said Tuesday that Congress should increase the government’s borrowing limit by March 1 to avert a possible default on the national debt.

One day after Treasury Secretary Robert E. Rubin told congressional leaders that he would run out of “legal and prudent” means of keeping the government from going into default by the end of February, Dole told reporters: “My view is he probably is correct and we need to act on that by March 1.”

On another front in the battle of the federal budget, House Republican leaders announced that they are preparing legislation to extend government spending authority until March 1, and they seemed to be backing away from a proposal to attach a scaled-back version of their tax break for families with children.

That proposal, floated by GOP leaders late Monday, ran into opposition from Senate Republicans who want to keep the stopgap spending bill free of controversy--and from conservative activists who do not want to compromise on the original, $500-per-child tax cut. “They want to keep their focus on the $500-per-child tax credit,” said Rep. John A. Boehner (R-Ohio).

On the debt limit, Rubin traveled to Capitol Hill to reiterate his plea that Congress raise the $4.9-trillion ceiling on federal borrowing. “There will be no further measures that we can take that are both legal and prudent,” Rubin said after meeting with Senate Democrats. He brushed aside Republican demands that Clinton offer a big concession on the budget in exchange for GOP action on the debt ceiling. “That should be done independently of the budget process,” he said. “That is a separate issue.”

House Republicans have said that they want the request for a debt-ceiling increase to come directly from Clinton because Rubin’s past predictions of fiscal disaster have amounted to “crying wolf.”

“Secretary Rubin doesn’t have, frankly, very much standing up here right now to tell us when the debt ceiling is expired, because the fact is each time he has told us, it has disappeared again,” said House Speaker Newt Gingrich (R-Ga.).

Although Dole said that Congress should increase the debt limit, he agreed with House leaders that it will be nearly impossible to pass without some amendments to satisfy GOP conservatives.

“Obviously you are not going to pass a clean debt ceiling in the House,” Dole said. “It’s not very easy to do on this side.”

Meanwhile, Standard & Poor’s Corp. said Tuesday that it would slash the government’s credit rating from its highest AAA ranking to a D rating, its lowest, if the federal government were to default on its debts, although it said that it does not expect that to happen.

But, Hendrick Kranenburg, executive managing director at the New York-based credit-rating agency, told Reuters: “It is a concern that even the prospect of default is being raised.”

Moving to avoid another partial shutdown of the government, GOP leaders are trying to pass a one-month extension of government spending authority before Friday, when the current stopgap measure expires.

House Appropriations Committee Chairman Bob Livingston (R-La.) said that details of the spending bill are still being worked out with Senate Republicans. The measure would cover nine Cabinet departments that have not received their regular 1996 appropriations and would fund most programs at levels set in spending bills vetoed by the president.

To avoid provoking a presidential veto, Republicans are considering providing modest funding for Clinton’s prized national service program, which Congress voted earlier to eliminate. The new stopgap bill would abolish a dozen or more minor programs and might include language to restrict travel by Clinton’s Cabinet secretaries, Livingston said. It also could include a proviso that ran into trouble in the Senate earlier this year--restrictions on funding international organizations that provide abortion services.

Gingrich and other House leaders considered adding a one-year, $125-per-child tax credit as they scrambled for ways to salvage parts of the GOP agenda that have stalled in the failed budget talks with Clinton. But Senate leaders warned Gingrich that the tax cut would doom the measure in the Senate, where Democrats could easily block it.

“It’s unlikely that we will pass any kind of tax break for anybody” on the stopgap spending bill, said Senate Minority Leader Tom Daschle (D-S.D.).