Monday, Jul. 26, 1954

Fixing the Ceiling

Without benefit of bulletins or headlines, one of the biggest battles of the 83rd Congress was being noiselessly fought out last week in urgent conferences. At the Treasury Department and on Capitol Hill, Secretary of the Treasury George Humphrey and Senate finance leaders were arguing about the $275 billion ceiling on the national debt.

It is not a new problem. A year ago Humphrey warned Congress that the ceiling had to go up. He asked that it be raised to $290 billion. The House promptly voted the increase, but the Senate, under pressure from Virginia's economy-minded Harry Byrd, declined to act. Humphrey managed to stay under the limit last year, but he told the reluctant Senators last week that the problem is worse this year: there is no more slack to be taken up.

Within the next two weeks, Treasury will issue $3.5 billion worth of 1% tax-anticipation certificates, pushing the debt to nearly $274,500,000,000. Between now and the first of the year, a period when tax collections are lowest, the Treasury will have to go deeper into the red. Humphrey estimates that the debt will climb to $280 billion before heavy tax collections in January pull it down.

George Humphrey was not demanding that the Senate follow the lead of the House and vote the full increase he asked last year. He named some alternatives: 1) authorize a smaller increase in the debt limit; 2) apply the debt ceiling only at the end of a fiscal year, thus allowing for seasonal peaks; 3) redefine the type of debt subject to the ceiling; 4) take tax-anticipation certificates out from under the ceiling. But the Secretary of the Treasury was insisting on one basic point: the Senators will have to fix the ceiling, one way or another, before they go home.

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