Newspaper article St Louis Post-Dispatch (MO)

Gingrich Hesitates to Raise Debt Limit

Newspaper article St Louis Post-Dispatch (MO)

Gingrich Hesitates to Raise Debt Limit

Article excerpt

House Speaker Newt Gingrich backed away Wednesday from an offer to temporarily extend the government's borrowing authority.

Gingrich, R-Ga., said Treasury Secretary Robert Rubin's projections that the federal debt limit would be reached Oct. 31 could be "a Halloween trick to try to scare people." Before agreeing to raise the debt ceiling for even a short time, Republicans would insist that Rubin provide details on the government's borrowing needs, Gingrich said.

Mike McCurry, the White House press secretary, said the standoff over federal borrowing "is now apparently going to be a crisis because Congress won't act to extend the debt ceiling."

Both sides know that neither would benefit if a failure by President Bill Clinton and Congress to break the impasse leads to an unprecedented default. The likely results would include higher interest rates, turmoil in the financial markets and possibly greater interest in a third-party presidential candidate.

Nonetheless, Republicans plan to tie the debt-limit increase to their seven-year package for balancing the budget and cutting spending and taxes. Lawmakers have long used that strategy to force presidents to handle issues they would rather avoid. The administration, on the other hand, wants to see the debt limit extension separated from the budget issue, which would make it easier for Clinton to veto the GOP package. White House officials say that ideally, they would like to see the debt limit extended until after the 1996 elections, or at least until this Christmas, when the year's budget work may be completed.

Gingrich and Rubin spoke by telephone Wednesday and agreed to continue discussing their differences, said Howard Schloss, a Treasury Department spokesman. But he added, "There's no agreement" on extending borrowing authority.

By law, the government's total debt cannot exceed $4.9 trillion. The Treasury Department had said that limit would be reached Oct. 31, although the limited borrowing plans it announced Tuesday pushed that back a few days. …

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