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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: jlallen who wrote (448502)	8/26/2003 4:45:48 PM
From: Kenneth E. Phillipps	Read Replies (1) \| Respond to of 769667

U.S. CBO sees govt debt cap hit in July-Sept 2004 Tue August 26, 2003 03:50 PM ET By Jonathan Nicholson WASHINGTON, Aug 26 (Reuters) - Aside from the bleak budget news, Tuesday's updated budget figures from the Congressional Budget Office gave the Bush administration another potential political headache to worry about: the federal debt limit. According to the CBO, the ceiling on the government's virtual credit card is likely to be hit some time in the fall of 2004, giving Democrats more ammunition to criticize the administration's fiscal policy in the months leading up to the November general election. "CBO estimates that under current policies, the present debt limit may be reached sometime in the last quarter of fiscal year 2004," the CBO said in its updated budget projections released on Tuesday. The final quarter of the federal fiscal year extends from July through September. In June of this year, a Treasury spokesman said the current limit would likely be hit sometime between April and October 2004. The ceiling has been raised twice during the Bush administration so far. On June 28, 2002, it was increased to $6.400 trillion from $5.950 trillion. On May 27, it was upped again, this time to $7.384 trillion. As of Friday, the debt subject to the limit stood at $6.741 trillion. Tuesday's CBO report forecast a deficit of just under $1.4 trillion over the next decade and a $480 billion one in the 2004 budget year. The budget year ending in September 2003 is expected to post a $401 billion shortfall, the largest ever. The Bush administration has blamed the turnaround from four straight years of surpluses that ended in 2001 to deficits on a combination of the economic downturn and needed spending on defense and security in the wake of the Sept. 11 attacks. Hitting the debt ceiling could set up a confrontation with Congress, which must approve any hike. If Congress tarries, though, Treasury can take certain accounting measures to stay below the ceiling, which it has done in the past. Those measures, however, could come under criticism as accounting gimmicks. "In the most recent debt-limit crises, such accounting measures have bought the Treasury enough room to remain below the limit for more than three months," the CBO noted in its report.