The National Debt

Report Outline
New boost to statutory debt ceiling
War, Depression, and National Debt
The National Debt and National Income
Conflicts on Postwar Fiscal Policy
Special Focus

New boost to statutory debt ceiling

$240 Billion Vs. $260 Billion Debt Ceiling

The present $210 billion statutory limit on the public debt of the United States would be raised to $240 billion by a bill passed by the House, May 10, and now awaiting action by the Senate. The Fifth War Loan drive, to raise an additional $16 billion for prosecution of the war, will open on June 12, and the public debt is expected to rise to $214 billion by June 30. Because the June 30 total is $4 billion in excess of the present limit, it is imperative that the Senate give its approval to the proposed extension before the summer recess of Congress, now scheduled to begin on June 24.

Government war borrowing, added to the deficit financing of the depression years, is expected to raise the public debt of the United States to a total of $300 billion by the end of World War II. The Treasury asked that the 1944 extension fix the new debt ceiling at $260 billion, instead of the $240 billion approved by the House.

Under Secretary of the Treasury Bell told the Ways and Means Committee that an extension to $240 billion would be sufficient to meet the Treasury's needs until next March 31, but that a further extension would be necessary before June 30, 1945, when the debt would approximate $250 billion. Members of the committee unanimously agreed that it was desirable to leave the question of an extension beyond $240 billion to the new Congress to be elected in November. Democrats said the Congress meeting in 1945 would have a clearer picture of the government's financial needs; Republicans said the public would be given a clear understanding of the dangers involved in a constantly expanding public debt during the 1944 political campaign.