O'Neill Urges Debt Ceiling Hike
WASHINGTON (Reuters) - U.S. Treasury Secretary Paul O'Neill on Thursday urged lawmakers to approve a hike in the nation's $5.950 trillion debt ceiling ``in a timely manner'' to avoid undermining confidence in the U.S. economy.


``Failure to enact a permanent increase in a timely manner would only serve to undermine confidence in our government and our economy,'' O'Neill said in testimony to a Senate subcommittee.

He said lawmakers needed to act on the debt ceiling to ensure that the faith of the world's capital markets in U.S. government securities remains unshaken.

``Any delay could create uncertainty that would raise the cost of borrowing for U.S. taxpayers,'' O'Neill said.

Treasury has been seeking congressional approval for an increase in the amount of debt the U.S. can have outstanding since December, when O'Neill sent a letter to Capitol Hill leaders asking for their ``prompt attention'' to the issue.

Treasury is nearing the cap, with $5.862 trillion in debt subject to the limit outstanding as of Wednesday. O'Neill said without an increase, the ceiling would be breached in late March. He is seeking an increase of $750 billion to take the limit to $6.700 trillion.

O'Neill also sought to deflect criticism that the need for a debt limit rise was brought on by tax cuts President Bush had sought that were enacted last year.

``Last August, we forecast that the debt ceiling would be reached in late 2003. Since then, war, recession and national emergency have intervened. This year's surplus has been eroded by the economic downturn and the response to the September 11 attacks,'' O'Neill said.

He also noted that the surpluses in government trust funds, such as that for Social Security, count against the debt limit.


750 mrd USD sin ca 8% des US-GDP!

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