Capping the Debt
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KWAME HOLMAN: They’re well aware that President Clinton will veto it, but House Republicans went ahead this afternoon and pushed through an extension of the debt ceiling. It would enable the government to borrow enough money to meet a $25 billion interest payment and prevent it from defaulting on its debt for the first time in history.
SPOKESMAN: All time is expired on this vote. The yeas are 219; the nays are 185. The motion’s agreed to.
KWAME HOLMAN: The bill’s most controversial provision would end the Treasury Department’s ability to dip into government trust funds to meet loan obligations in times of fiscal emergency.
REP. BILL ARCHER, Chairman, Ways and Means Committee: The Treasury Department right now is planning to raid the Civil Service Trust Fund as a circuit breaker to avoid breaching the debt limit. But this circuit breaker is really a high voltage wire that directly taps into retiree trust funds. In time, the administration may be even tempted to raid the Social Security Trust Fund. And currently, the law does not protect the Social Security Trust Fund, but the provisions in this bill do. The provisions prevent the Secretary from the Treasury from ever raiding the Social Security Trust Funds.
KWAME HOLMAN: But House Democrats say removing the Treasury Department’s flexibility could cause a financial disaster.
REP. JAMES MORAN, (D) Virginia: These provisions were enacted by President Reagan in 1987, when we had–that’s the last time we had the most serious debt ceiling crisis. This debt ceiling extension takes away those provisions. Now, there’s an article in the “Post” today. It says analysts, financial analysts, say the United States is unlikely to default. It talks about how blase they all are. The reason they are is because they are assuming that those provisions enacted in 1987 are still law. In other words, we can borrow from other trust funds so as to get us by a crisis. And then there is a law that requires that that money be paid back to those trust funds. This debt ceiling bill repeals those provisions. That’s why it has to be defeated. That’s why it has to be vetoed.
KWAME HOLMAN: And Democrats contend Social Security is one trust fund the Treasury Department has vowed never to touch.
REP. SANDER LEVIN, (D) Michigan: The Social Security argument is a complete sham. You were there when the Treasury Secretary assured through his representatives this country under no circumstances will Social Security be touched, and you get up here and make that argument.
KWAME HOLMAN: Not included in this bill is a provision to eliminate the Commerce Department. Freshman Republicans had demanded the provision be included but backed away because it lacked support in the Senate.
REP. SAM BROWNBACK, (R) Kansas: We received assurances from the Senate leadership that they will push for the elimination of the Department of Commerce the next available opportunity this year. So I urge my colleagues to vote for this temporary debt ceiling.
KWAME HOLMAN: And once the votes to pass the debt ceiling extension were assured, members used the rest of their time pointing fingers, placing blame, and charging irresponsibility and blackmail.
REP. ROBERT WALKER, (R) Pennsylvania: What we’re hearing from now are the debt junkies who for 40 years ran up trillions of dollars worth of debt and gave us the situation that we’re now in, and now are out complaining about, about the process. It’s fascinating. They not only ran up trillions of dollars worth of debt, but then they were such debt junkies that they adopted what was called the Gephardt rule so that they put the entire debt of the United States on automatic pilot. And so any time we had to have more debt, we simply passed it and kind of deemed the debt to have been passed under the Gephardt rule. These debt junkies wouldn’t even bring bills like this to the floor, because they didn’t want to go through the agony of ever raising the debt, and the debt swelled by trillions and trillions of dollars.
REP. HAROLD VOLKMER, (D) Missouri: I first wish to address my words to the person I believe in this country who has worked the hardest for the last two years to bring our economy to the great economic conditions that we have today, and that’s our President of the United States, Bill Clinton. And what the Republican leadership is now proposing to do is to put him on the hot spot, to say if you veto this, then we may have a default in our bonds and our Treasury notes and the economy may go to blazes. Well, Mr. President, I want to tell you that I stand here today urging you to veto this lousy bill.
KWAME HOLMAN: And the President will, possibly as soon as it gets to his desk this evening.