U.S. dangerously close to debt limit

The Treasury Department suspended investments in a federal employee pension fund Thursday to keep the government below its borrowing limit, Treasury Secretary John Snow said in a letter to Congress.

Snow said payments to the $56 billion Federal Employee Retirement System's Government Securities Investment Fund, known as the G-fund, would be restored once Congress raises the $7.384 trillion debt ceiling. [...]

The government was just $10 billion below the limit as of Tuesday, according to the latest available data.

Congress adjourned for an election break last weekend without raising the politically sensitive limit. [...]

Congress has already raised the debt limit twice during the Bush administration's tenure, in 2002 and 2003.

Today, House and Senate conferees engaged in final meetings to complete work on the massive corporate tax bill. In doing so they defeated a Democratic amendment on overtime rules that had been passed by a Senate committee. The amendment, sponsored by Senator Tom Harkin , proposed to restore overtime rights while preserving an inflation adjustment to the minimum salary that determines automatic overtime eligibility. The amendment would have banned the Department of Labor from enforcing new overtime pay rules.

Its passage in committee was considered a huge victory for labor rights, and showed that many Congressmen were willing to stand up against the administration's new overtime proposals.

Unfortunately, as has happened in the past, conferees blocked the Senate amendment today. The amendment had been attached to the tax bill. Senator Harkin expressed frustration that his amendment has been approved six times by both chambers, but has always been stripped out in conference.



Posted by Becky Lewis, 06:00:24 PM



The Numbers on FSC/ETI

Yesterday, the Joint Committee on Taxation released an updated score on the "chairman's mark" of the FSC/ETI bill. (See http://www.house.gov/jct/x-68-04r.pdf.)

Overall, the score raises $238 million in revenue, although there are several gimmicks which are used to keep the costs down (see http://www.cbpp.org/10-4-04tax.htm.)

• The repeal of the exclusion of ETI will cost $57.7 billion.
• Under title VIII, there are revenue provisions to close loopholes and raise some fees, which raise a total of $81.7 billion

The revenue enhancements from the repeal of the ETI regime and the loophole closings thus total $139.4 billion. (Note that this total would come close to paying for the $146 billion price tag of the "middle class" tax cut.)

Rather than using this money to finance cuts in other areas of the tax code or pay off the debt, the bill gives over $139 billion in additional tax cuts primarily to businesses.



Posted by John S. Irons, 12:47:56 PM

Monday, October 04, 2004