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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (52354)3/17/1999 3:38:00 PM
From: RealMuLan  Read Replies (1) of 132070
 
Wednesday March 17, 3:07 pm Eastern Time
Rubin warns Congress against debt limit curbs
WASHINGTON, March 17 (Reuters) - Treasury Secretary Robert Rubin warned Congress on Wednesday against any proposal that would place curbs on raising the debt limit, saying he would urge a presidential veto of any such legislation.

In a letter sent in response to an inquiry from Senate Democratic leader Thomas Daschle, Rubin said imposing such curbs might hinder the United States' ability to borrow in order to pay its debts ''and could also run the risk of worsening a future economic downturn.''

Rubin's sharply worded letter, sent to a half dozen key Democrats in the House and Senate, referred to a legislative proposal currently before the Senate called the Social Security Surplus Preservation Act sponsored by several Republican lawmakers.

Its key provision aims to force the government to stop increasing the public debt by reserving all of the Social Security surpluses while reducing the public debt limit by the amount of the surplus every two years.

Rubin pointed out that a debt crisis was precipitated in November 1995 when government borrowing hit a statutory limit and protested that the Senate proposal would only heighten the risk of more such crises in future.

He also said it could worsen any future economic downturn by limiting the government's options for spurring growth to counter a slowdown. ''Either cutting spending or raising taxes in a slowing economy could aggravate the economic slowdown and substantially raise the risk of a significant recession,'' Rubin said.

biz.yahoo.com

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