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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (60626)	10/14/2004 8:52:00 PM
From: Ron	Read Replies (1) \| Respond to of 89467

Bush administration takes emergency steps to avoid debt ceiling Thu Oct 14, 4:26 PM ET WASHINGTON (AFP) - US President George W. Bush (news - web sites)'s administration weathered a pre-election mauling as it announced emergency measures to skirt a 7.38-trillion-dollar debt limit. Treasury Secretary John Snow, who shortly afterwards also revealed a record budget deficit for 2004, said he would use pension money to keep the government running. In a letter to Senate majority leader Bill Frist, Snow said he was immediately suspending payments to a federal employees' retirement scheme, the Government Securities Investment Fund (G-Fund). The missing money would be repaid in full later, with no net effect on the fund or retirees, he promised. The treasury secretary said he was forced to take the emergency accounting step because Congress had not acted on his August 2 request for the government's legal debt limit to be raised. Any move by Congress to raise the debt limit could be politically embarrassing. Democrats pounced on the news as evidence of fiscal mismanagement by the administration, less than three weeks before Bush faces Democratic challenger John Kerry (news - web sites) in the November 2 presidential election. "George Bush continues to make history for all the wrong reasons: He's the first president to go without creating a new job since the Great Depression and now he's run up more debt in shorter period of time than all the presidents combined in the 200 years from Washington through Reagan," said Kerry campaign spokesman Phil Singer. "On top of that, this is the third time he's broken his promise not to raise the debt ceiling. His fiscal mismanagement is taking its toll on America and it's time for a fresh start," he said in a statement. House Democratic leader Nancy Pelosi described Snow's manoeuvre as "a shameful admission" that the administration's economic policies had failed the American people. The overall US debt -- the total, accumulated financial liabilities of the country -- now amounted to 7.38 trillion dollars, she said. "The Republican leadership knew that the debt limit would be reached this month but did not want an embarrassing vote on raising the debt ceiling until after next month's election so Republicans are now resorting to extraordinary accounting measures to avoid that vote." Pelosi said the Bush tax cuts for "an elite few" were unaffordable, and corporate tax breaks for companies that exported jobs abroad had failed to create jobs. "The president's disastrous economic policies are just creating record deficits, higher interest rates, a drag on the economy, and a legacy of debt for our children. It is time for a change," she said. Snow called on lawmakers to raise the debt ceiling by mid-November, which would be well after the election. "Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November, at which time all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted," Snow said. "I know that you share the president's and my commitment to maintaining the full faith and credit of the US government." In the fiscal year to 2004, the US budget exploded to a record 413 billion dollars, the Treasury Department (news - web sites) announced later Thursday. Government spending for the year ended September 30 rose 6.2 percent to 2.29 trillion dollars, swamping income, which climbed 5.5 percent to 1.88 trillion dollars, it said. The result: the deficit mushroomed 9.5 percent from the previous year to 413 billion dollars, equal to 3.6 percent of total economic output, or gross domestic product (GDP (news - web sites)). -AP