As U.S. Debt Ceiling is Reached, Bush Seeks to Raise It Once Again

Less than a day after President Bush implied that Senator John Kerry lacked "fiscal sanity," the Bush administration said on Thursday that the federal government had hit the debt ceiling set by Congress and would have to borrow from the civil service retirement system until after the elections. Federal operations are unlikely to be affected because Congress is certain to raise the debt limit in a lame-duck session in November. Congressional Republicans had wanted to avoid an embarrassing vote to raise the debt ceiling just a few weeks before Election Day. Since Mr. Bush took office in January 2001, the federal debt has increased about 40 percent, or $2.1 trillion, to $7.4 trillion. Congress has raised the debt ceiling three times in three years, raising it most recently by $984 billion in May 2003. On Thursday, Treasury Secretary John W. Snow said that the federal government was about to breach the limit again and would be able to keep operating only if it started tapping money intended for the civil service retirement fund, the pension system for federal workers. "Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November,'' Mr. Snow warned in a statement, declaring that his arsenal of financial tools "will be exhausted'' at that point. [more ]

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