Evening star., 1953-07-31
Administration
Insists Debt Limit
Must Be Increased

The administration today had
put it on the line that Congress
must raise the SITS billion limit
on the public debt or the Gov
ernment will be unable to pay
its bills in the late months of
the year.
President Eisenhower sent
comparatively mild message to
Congress last night requesting
raise in the ceiling on the amount
the Government can borrow to
$3.50 billion. He was apologetic
about the request" couched in
conciliatory tones.
Secretary of the Treasury
Humphrey was much more en-
phatic about the absolute need
for congressional action in the
situation.
Congress has got to act at this
session or be called back in a
special session." the Secretary
said, rather bluntly. at news
conference. It is Mr.. Hum
phrey's job to see that there is
cash on hand to pay the Gov
ernment's bills as they come due.
In any event, it was clear that
the administration was going
all out to have the debt limit
increased. Gen. Eisenhower was
said to be just as firm in the
matter as Mr.. Humphrey, de-
spite the mildneSs of his formal
approach to Congress.
The President merely pointed
out some bare fiscal facts. He
said the public debt now had
climbed above $272 billion and
that in order to meet necessary
expenditures and to maintain
a safe working balance of funds
it will be necessary to borrow
more money before the next
session of Congress in early jan
uary, 1854. This future borrow
ing, he added. will carry the debt
above the present limit set by
Congress seven years ago Of $275
billion.
Under present circumstances"
the President continued "the
existing statutory debt limit is so
restrictive that it does not allow
the financial operating leeway
necessary to conduct the Gov
ernment fiscal affairs effec-
tively.'
Sec1 etary mphrey and
Budget Director Joseph Dodge
supported their arguments with
figures purporting to show that
the Federal debt will be pushed
to at least $277 billion by the
end of the year through pay
ments of bills they know are COM
ing due. They explained that most
of the income, from taxes and
duties, was collected in the first
half of the year. In the period
from January to June the Gov
ernment took in SAL billion and
spent $38 billion. But in the
second half of the year the
estimates are SGT billion of in
come and $37.5 billion of ex-
penses.
"If Congress refuses to in !
crease the debt limit" Secretary
Humphrey told reporters, I'VE
just will run out of money, and |
we can't pay our bills, and that |
is all there is to it. 1t is just
that simple"
At another point, Mr.. Hum
phrey described the consequences
of Congress refusal to raise the
ceiling so the Treasury could
borrow more money in this way:
1--WE couldn't do the things we
are authorized to (through
congressional appropriations
and. frankly. I think that if this
country didn't pay its bills, if
we didn't pay our payrollS, If
veterans payments weren't
made, if salaries in Washington
weren't paid, if goods were de-
livered and not paid for. if we
had to call up somebody and
say. Don't ship something be-
cause we can't pay for it, I
think it would just cause near
panic" ;"
$40 Billion in C. o. d.
Mr.. Humphrey said that $40
billion of what the Government
will spend this year is in the
form of c. o. D. goods. tanks,
planes, ETC., which had been
placed on order previously.
AS for congressional reaction
to the request to raise the debt
limit, Mr.. Humphrey said that
everybody including himself was
opposed to the idea, but Il don't
know anything you can do about
it but do it.
The facts have just got you
in a corner" he added, "and
don't think anybody that stops
to think about it for a minute
feels that America, the United
States of America, can afford
not to pay its bills"
The Treasury is caught in the
middle of different actions of
CongreSs-the limit placed on
the amount to be borrowed and
appropriations Congress has au-
thorized for expenditures. Mr..
Humphrey estimates that ex-
penditures for the rest of this
year may exceed income and
cash on hand by as much as $6
billion. That means the Gov
ernment must borrow that