Public Debt Limit

Report Outline
Debt Limit Increase in the Balance
Growth of Debt in War and Depression
Public Debt and the National Economy
Special Focus

Debt Limit Increase in the Balance

The state of the government's finances as the year 1953 draws to a close makes it virtually certain that Congress will again be asked to increase the public debt limit. President Eisenhower said Nov. 18 that the question would not be decided until late December but it was authoritatively reported, after a White House conference Dec, 18, that congressional leaders had been told by Secretary of the Treasury Humphrey that the government would not be able to meet its obligations during the coming year without additional borrowing authority.

A special message by the President last July 30, when Congress was within a few days of a planned adjournment, asked that the debt ceiling be raised from $275 billion to $290 billion. The House approved the increase but no action was taken by the Senate. At the time of the President's message, the debt subject to the statutory limit stood at $272.1 billion. It had risen by mid-December to $274.4 billion, within $5 billion of the World War II high, but was still some $600 million below the present ceiling.

Half Year of Financial Manipulation

Expedients to stay within the limit until Congress reconvenes in January have included a slow-down of payments to government contractors, cessation of sales of tax-saving notes to corporations, and sale of some of the Commodity Credit Corporation's crop loans to banks with a promise to buy them back in 1954. The chief resource, however, has been the Treasury's general fund. The general fund balance has been drawn down more than $5.2 billion since the end of July to meet government obligations which would have been met largely with borrowed funds if the debt limit had been raised.