Statement of Administration Policy: H.R. 2360 - Increasing the Statutory Limit on the Public Debt

(House Rules)
(Sponsor: Rep. Rostenkowski (D) IL)

The Administration continues to support a clean debt ceiling bill, one that would raise the ceiling to: (a) $2,800 billion, an amount sufficient to be sure to get through May 1989, or (b) $2,578 billion, the amount estimated in the President's budget to be necessary for FY 1988, with the Treasury's conventional assumption of a $5 billion allowance for contingencies. The first option is strongly preferable in order to depoliticize action on the debt limit and thereby remove the burden of dealing with this time-consuming issue in the midst of election year schedules.

The current temporary ceiling of $2,300 billion will revert to $2,111 billion on May 15th. Failure of Congress to increase or extend the temporary debt ceiling would cause the government to run out of money and default on its obligations by about May 28th. Such an event would harm irreparably the U.S. Government's financial status at home and abroad and cost the taxpayers hundreds of billions of dollars over time.

In the interest of avoiding such harm, the Administration would not object to a 60-day increase in the debt ceiling to $2,320 billion.