Statement of Administration Policy: H.R. 3024 - Increase in the Public Debt Limit

(House)
(Rostenkowski (D) Illinois and Archer (R) Texas)

H.R. 3024, as reported by the House Ways and Means Committee, provides for a short-term increase in the limit on the public debt. The $70 billion temporary increase would expire at the close of October 31, 1989. The Adminiistration would prefer increasing the public debt limit from its current level of $2,800 billion to $3,122.7 billion, consistent with H.J. Res. 280, as originally deemed passed by the House, which is expected to be enough to permit the Government to meet its obligations through September 30, 1990. The Administration supports enactment of H.R. 3024, however, which would provide the Congress with additional time in which to consider a longer-term debt ceiling.

It is essential that the Congress enact an increase in the debt ceiling before it adjourns for the August recess. Without an increase in the debt ceiling by August 1st, full investment of the social security trust funds most likely will not be possible. Furthermore, the Administration's estimate is that the Treasury would run out of cash and default on the Government's obligations on August 15th in the absence of enactment of a debt ceiling increase.