Statement of Administration Policy: H.R. 5350 - Debt Limit Increase

(House Rules)
(Rostenkowski (D) Illinois)

H.R. 5350, as reported by the House Ways and Means Committee, would increase the public debt limit from $3,122.7 billion to $3,195 billion through October 15, 1990.

The Administration supports prompt enactment of a clean debt limit extension bill. A default would almost certainly occur on August 15th if the debt limit is not increased. Failure to enact a debt limit increase by August 13th would prevent Treasury from auctioning securities on August 14th and settling on August 15th.

An auction of Treasury securities is scheduled to be announced on August 1st. Failure to enact a debt limit increase by that date would compress the time period for distributing those securities. This would raise the cost of Treasury borrowing, all other things being equal. The cost of the delay would grow with its length.