The Last Week

Lights burned far into the night and messengers scurried about like ants at a midsummer picnic as Congress hurried to adjourn. Then, into the usual closing-week crisis, President Eisenhower injected a red-hot issue: he asked Congress to raise the federal debt limit from $275 billion to $290 billion.

There was a reason for the sudden and anxious request. The federal debt stood at more than $272 billion--less than $3 billion under the ceiling set by Congress in 1946. Having inherited obligations to pay cash on delivery for huge quantities of goods and services ordered by the Truman Administration, and facing a decline in revenues, it seemed that it would be only a matter of months, or possibly weeks. before the Eisenhower Administration would be broke.

As far back as May, Treasury Secretary George Humphrey warned that the debt ceiling might have to be raised. But the Administration never faced up to asking Congress to take action until the day before the scheduled adjournment. Without consulting congressional leaders in advance, Humphrey and Budget Director Joseph Dodge, backed by Ike, decided on a last-minute blitz.

Hard Facts. When word of their decision got around. Virginia's Harry Byrd tried to head them off with a warning. Byrd was in a strong position; he had consistently supported the new Administration, and only the day before, Eisenhower had sent him a note saying, "Hurrah for the Byrds. We need more of 'em."*

Byrd took the floor for one of his rare speeches. "A debt limit of $275 billion," he said, "is as much or more than this country should be called on to stand . . . An increase in the debt limit at this time would be misunderstood . . ."

The following morning, 13 Senators and Representatives were invited to breakfast at the White House. Then, for two hours and 15 minutes, they listened to Humphrey and Dodge, armed with charts and graphs, lay down the "hard, cold fiscal facts." Said Humphrey: "If Congress refuses to increase the debt limit, we just will run out of money, and we can't pay our bills, and that is all there is to it . . . I think it would just cause a near panic."

How about the opinion, held by some lawyers, that the Administration had a legal right, despite the debt ceiling, to borrow enough money to cover any appropriations voted by Congress? Humphrey answered: "I don't think any of that very interesting legal argument amounts to a damn, because we have got to sell bonds. If you have got some money in your pocket and I offer .you a bond, and somebody says, 'I don't know, there is a big legal argument over whether that is a good bond or not,' you just don't buy it."

Hard Politics. The hard, cold fiscal facts were impressive--but so were the hard, cold political facts. Congressional Republicans were inclined to agree with New York's Representative Frederic Coudert that the Administration had put Congress in "a cruel and bitter dilemma." The party that for 20 years had fought a mounting federal debt was in the position of asking for an increase in a statutory debt limit that had stood for seven years.

Nevertheless the House promptly approved a bill to increase the limit. But the Senate balked. More than five hours of briefing and pleading by Humphrey and Dodge changed few, if any, minds in the Senate Finance Committee. North Carolina's Clyde Hoey bluntly told Humphrey that, if the Administration had known on July 1 that an increase in the debt limit was necessary, it should have told Congress on July 2, not waited until the last minute. Senators were sore about the delay, especially since they suspected that the Administration had deliberately waited until appropriations bills were passed: if Congress had got the debt-increase request a week earlier, it might have cut foreign-aid appropriations more deeply.

When it came time for the committee to vote on the bill, Harry Byrd made a motion to table, i.e., put it off until the next session. The count was 11 to 4 in favor: six Democrats and five Republicans for; three Republicans and one Democrat against.

With that the debt fight was lost and the Administration suffered its major defeat on Capitol Hill of the first session.

* A reverse echo of Harry Truman's famed comment: "There are too many Byrds in the Senate."

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