Congress OKs Temporary Hike in U.S. Debt Ceiling

WASHINGTON —  Congress on Friday approved a short-term increase in the national debt ceiling and recessed for the summer, having failed to produce legislation to cut the nation’s huge budget deficits.

The Senate, by a vote of 51 to 39, followed the House in passing a bill increasing the Treasury’s borrowing authority to $2.35 trillion through Sept. 23. The House action was by voice vote.

The stopgap bill was needed because a previous interim debt measure had expired just after midnight Thursday. The Treasury, stripped of its borrowing authority, suspended sales of U.S. savings bonds, and the government faced default by mid-August.

Teeth for Gramm-Rudman

The short-term debt bill was passed after House and Senate negotiators failed, in a weeklong flurry of talks, to reach agreement on a long-term debt bill containing a plan to restore teeth to the Gramm-Rudman budget-balancing law.

Sen. Phil Gramm (R-Tex.), a prime sponsor of the original law and the plan to revive it, pressed his cause until the last minute.

“We are losing today our best opportunity to fix the Gramm-Rudman law,” he said.

The Senate recessed at 9:37 p.m., and the House followed suit at about 10 p.m.

Even as members of Congress were preparing to leave, House negotiators held another meeting. They rejected the argument that failure to act before the recess was fatal to the Gramm-Rudman effort.

“I think a substantial amount of progress has been made and will survive until after the recess,” House Majority Leader Thomas S. Foley (D-Wash.) said.

House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) said he was nailing down areas of possible compromise so that, when lawmakers return after Labor Day, they will not have to “start from scratch.”

Both chambers had previously voted in favor of a $2.8-trillion debt bill to finance the government’s deficit operations into 1989. But it was stalled because of negotiations over the amendment restoring automatic spending cuts as the enforcement tool for Gramm-Rudman’s program of gradually reducing deficits.

House Democrats on Friday proposed, and some senators agreed, to renew the law for a three-year trial period, leaving it to a future Congress to decide whether to enforce the budget-balancing program beyond that. Democrats view strict deficit targets as a way to force President Reagan to negotiate on a tax increase, because automatic cuts would hurt his defense program.

Tentative agreement was reached on requiring a reduction in the deficit of $23 billion in fiscal 1988 and $36 billion in fiscal 1989. But conservative Republican senators, including Gramm, said they could not accept anything less than a fully enforced Gramm-Rudman that would lead to a balanced budget early in the 1990s.