WASHINGTON – The Bush administration announced Wednesday that it will run out of maneuvering room to manage the government's massive borrowing needs in two weeks, putting more pressure on Congress to raise the debt ceiling (search) when it convenes for a special post-election session.
Treasury Department (search) officials announced that they will be able to conduct a scheduled series of debt auctions next week to raise $51 billion. However, an auction of four-week Treasury bills due to be completed on Nov. 18 will have to be postponed unless Congress acts before then to raise the debt ceiling.
"Due to debt limit constraints, we currently do not have the capacity to settle our four-week bill auction scheduled to settle on Nov. 18," Timothy Bitsberger, acting assistant Treasury secretary for financial markets, said in a statement.
Congress is scheduled to return for a lame-duck session beginning on Nov. 16 to deal with the debt ceiling, an omnibus spending plan for the rest of this budget year and other matters.
The Republican-controlled Congress put off dealing with the debt ceiling before adjourning in October, preferring not to force members to vote on the politically sensitive issue of adding to the national debt before the November elections.
The government hit the current debt ceiling of $7.384 trillion on Oct. 14, forcing Treasury to begin a series of bookkeeping maneuvers to keep financing the government's normal operations without breaching the debt ceiling. But Treasury Secretary John Snow (search) has warned that those special measures would last only until mid-November.
The Treasury Department's actions have included reducing the amount of debt in government trust funds to free up room for further borrowing from the public. The nonpublic debt is then replaced in the trust funds once the debt ceiling is increased along with any lost interest payments.
Republicans have proposed that the debt ceiling be raised by $690 billion to $8.074 trillion, an amount that would get the government through next September, when the 2005 budget year ends.
The need to raise the debt ceiling reflects the record budget deficits of the past two years. The deficit for the 2004 budget year, which ended Sept. 30, was an all-time high of $413 billion, surpassing the old mark, in dollar terms, of $377 billion in 2003.
Democrats blame the surging deficits on Bush's tax cuts, while the administration contends the tax cuts provided critical economic stimulus to help lift the economy out of the 2001 recession.
The administration says the president has a plan to cut the deficit in half by 2009, but critics contend that the real problems will come in later years as retiring baby boomers put unprecedented strains on Social Security (search) and Medicare (search).
In its announcement Wednesday, Treasury said it will sell $51 billion in new securities next week including $22 billion in three-year notes on Monday, $15 billion in five-year notes on Tuesday and $14 billion in 10-year bonds on Wednesday.