Treasury Department Warns U.S. Will Reach Debt Limit Soon - February 10, 2003 Vol. 4 No. 3

February 10, 2003 Vol. 4 No. 3:

Published: 02/10/2003

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Treasury Department Warns U.S. Will Reach Debt Limit Soon

Bush Sets Record on Deficit:
According to a chart released by Reuters last week, this year's $304 billion deficit that arose under the Bush Administration's watch is the largest in the last 30 years. Though many economists agree that temporary deficits at a time of a slowed economy are beneficial, most are concerned that the permanent commitment of the country's vital resources to providing permanent and costly tax cuts to the very wealthy will only create more trouble for the economy in the long-run.

The Treasury Department issued a warning last week that the federal government would soon reach its current borrowing limit of $6.4 trillion, if Congressional action were not taken to raise it. As reported in the June 24 edition of the Watcher, this announcement regularly sets up a struggle between the Administration and Members of Congress, who do not want to appear to be spending beyond the government’s debt limit. As this Washington Post article points out, this most recent announcement is particularly troublesome, given that the President is also requesting a $674 billion tax cut.