House Panel OKs Bill to Extend Borrowing

WASHINGTON — The House Ways and Means Committee approved a six-week extension of the government’s borrowing power today as House and Senate negotiators were stalled in efforts to approve a longer-term version.

The measure endorsed by the panel would temporarily extend the debt limit to $2.35 trillion, enough for the government to borrow money to pay its bills until Sept. 23.

The committee acted shortly after House negotiators trying to renew the government’s expired borrowing power sent an offer to their Senate counterparts that included a proposal to revive the mandatory spending cuts once contained in the Gramm-Rudman deficit-reduction law.

Prospects Dim

Because of disagreements over the Gramm-Rudman language, however, prospects appeared dim for quick approval of a long-term debt limit. That measure would give the government a $2.8-trillion ceiling on its borrowing, enough to carry the government through May of 1989.

“This is really a backup measure in the event the Senate and House don’t reach agreement,” Rep. Dan Rostenkowski (D-Ill.), chairman of the Ways and Means Committee, said of the short-term bill.

The government’s borrowing limit dropped from $2.3 trillion to $2.1 trillion at midnight Thursday. Even without an extension, however, the Treasury Department says it has enough cash to pay the government’s bills until the middle of August.

Continuing Inaction

Because of the continuing congressional inaction on debt limit extension, the Treasury today told banks and other financial institutions to suspend the sale of U.S. savings bonds until further notice.

Outnumbered House Republican negotiators opposed the package their chamber sent the Senate today because it omitted revisions of the budget process they have sought. There seemed to be little optimism that senators would accept the plan.

“I think we’re up against the wall,” said Rep. William H. Gray III, chairman of the House Budget Committee. “I think you’ve got a lot of problems here.”

Also influencing the legislators’ efforts to restore the mechanism that could give Gramm-Rudman some clout was Congress’ pending summer vacation, which was scheduled to begin after today’s business and continue through Labor Day.