Bush and Treasury Secretary Paul O'Neill have repeatedly asked Congress to boost the $5.95 trillion limit by $750 billion by late March or risk a federal default.
But with the vote problem in the House, Treasury Secretary Paul O'Neill is expected to avoid a default by maneuvering money his department manages for federal retirees - a move that is legal but could pose political risks.
With many Democrats poised to oppose the debt limit measure, House Majority Leader Dick Armey, R-Texas, said Tuesday that Republicans can't push it through the House unless it is attached to widely popular legislation. GOP leaders want to combine it with a bill paying for the war against terrorism, which the White House has yet to send to Capitol Hill.
"It does this secretary no good to have us take the debt reduction to the floor (of the House) and not be able to pass it," Armey told reporters.
To let lawmakers delay the debt limit vote, O'Neill is expected to shift money from retirement funds Treasury manages for federal workers. The maneuver was among several used by Robert Rubin, President Clinton's Treasury secretary, to avoid an unprecedented federal default during a 1995 budget fight with Congress.
"It has been necessary for secretaries in the past and it will be necessary of this" secretary, Armey told reporters Tuesday.
Democrats were already attacking plans to delay the debt limit vote, comparing the use of the retirement funds to the problems faced by Enron, the bankrupt energy firm accused of mismanaging its workers' pension funds.
"For political convenience, they're shoving it off," Rep. John Spratt of South Carolina, top Democrat on the House Budget Committee, said of the delayed vote. "Even Enron didn't do that."
House Minority Leader Dick Gephardt, D-Mo., said it was Bush's budget last year and its $1.35 trillion, 10-year tax cut that forced the debt problem.
The last debt limit increase was in 1997 before the government ran four straight annual surpluses. This year and next, deficits seem virtually certain.
"Most of us didn't vote for the economic plan" of Bush, Gephardt said. "We're not exactly excited about" supporting a debt limit increase.
Republicans have said Bush's tax cut helped revive the economy, which has shown signs of growth in recent months. They have blamed the recession and federal spending for the budget's problems.
"This is a management process. It is not ominous in any regard," Armey said of Treasury's shifting of the retirement funds.
Many Republicans criticized Rubin when he shifted the retirement funds during a budget showdown with the GOP Congress nearly seven years ago. Democrats then defended the moves as necessary to avoid a default.
If Congress fails to raise the debt ceiling, O'Neill can shift money in retirement funds the Treasury Department invests for federal retirees into non-interest bearing accounts.
By shifting that money, it is no longer counted against the federal borrowing limit. That creates room for Treasury to borrow more money to keep the government paying its bills, and could delay a vote until April or months later.
Eventually, the money - along with all lost interest - would be put back into interest-bearing instruments.
Senate Majority Leader Tom Daschle, D-S.D., has said he wants the debt limit bill passed unattached to other legislation.
http://accesswdun.com/article/2002/3/197530