Wednesday, July 14, 2004
Federal debt limit to be critical this year.
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The $7.384 trillion debt limit may need attention before the November election, Timothy Bitsberger, Treasury's nominee for assistant secretary for financial markets, said in a document obtained by Reuters on Wednesday.
"It appears very likely the limit will be reached sometime in late September or October, with the most likely date being early October," Bitsberger said in the submission for the record after his Senate confirmation hearing last week.
"Treasury may be in a better position to narrow this range after completion of the mid-session review," he said in response to a question from Sen. Max Baucus of Montana, the ranking Democrat on the Senate Finance Committee.
CONTENTIOUS VOTE
The government's statutory debt was $7.220 trillion as of July 12, according to Treasury data.
Treasury Secretary John Snow has urged Congress to move speedily to raise the limit, in what is likely to be a contentious election-year vote on the country's rising debt. He has asked Congress to act before its August recess.
Democrats blame President George W. Bush's tax cuts for turning the fiscal surplus he inherited into a record deficit, which is expected to top $400 billion this year. The debt limit has already been raised twice during the Bush administration.
Lou Crandall, chief economist at Wrightson ICAP, said the potential timing of a vote on raising the debt limit, just before the November election, could worry markets.
"Congress doesn't want to have to deal with it, and the bond market doesn't want to see Congress have to deal with it," he said.
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