Spratt, Rangel Petition for Debate and Vote on Debt Limit Increase

In his letter of August 2, 2004, Treasury Secretary John Snow informed the Congress that the statutory debt limit would be reached "between late September 2004 and early October 2004." The Secretary stated that once that ceiling is reached, he will have only limited "authorized extraordinary actions" he can undertake to avoid breaching it. Secretary Snow urged that the ceiling be raised "as soon as possible."

As we write this letter, the debt subject to limit stands at $7.326 trillion, just $58 billion from the debt ceiling. Because Congress failed to pass a budget for 2005 in this session, largely on account of the failure by House and Senate Republicans to strike a compromise on applying pay-as-you-go discipline to tax cuts, there was no vehicle to raise the debt limit without an explicit vote in the House.

Last week, CBO projections confirmed that the policies of the Bush Administration and the Republican Congress have turned a projected $5.6 trillion surplus into a deficit of over $3 trillion. The decision to maintain support for oversized tax cuts, even in the face of higher-than-anticipated costs of war, leads to even higher deficits and debt. For 2004, tax cuts passed by Congress are the major controllable cause of budget deficits, accounting for 60 percent of the budget deterioration caused by policy changes.

The need to increase the debt limit is a warning that the nation's finances are headed in the wrong direction. When President Bush took office, his Administration forecast that the debt ceiling would not be reached until 2008. Yet, contrary to this forecast, Secretary Snow's letter marks the third time since this Administration took office that the debt limit has needed to be increased. Last year's debt limit increase was the largest in history: $984 billion. In 2002, the increase was $450 billion. Now, an additional $690 billion increase is needed to keep the federal government solvent for just one more year. Thus, in four years, this Administration will need to raise the debt ceiling by an unprecedented $2.1 trillion.

It is clear that the federal government's fiscal affairs have gone seriously awry and the Congress must act quickly to safeguard the solvency of the federal government. We respectfully request that you ensure that this pressing matter is addressed fully and openly with all due urgency.