Senator sees no rush for debt limit hike

WASHINGTON (Reuters) - The U.S. Senate might wait until mid-March to raise the U.S. borrowing limit, despite Treasury Department warnings that the government could exceed the current cap within days, a key Senate Republican said on Tuesday.

Sen. Charles Grassley of Iowa, who chairs the Finance Committee, said that if the Senate does not raise the $8.18 trillion debt limit this week before the start of a weeklong recess, it would vote before the next recess tentatively set for March 18.

On Monday, a Treasury Department spokesman said the federal government was on track to hit the current debt ceiling by mid-February.

If U.S. borrowing authority is not lifted soon, the Treasury Department could use such extraordinary measures as dipping into several government funds to avoid default, as it has in the past.

Grassley, an Iowa Republican, told Reuters the goal would be to get the debt limit legislation passed "with the least debate."

"I would like to see a bill on any Thursday night just prior to a recess. So if it's not this recess it would be the Thursday before we go home for the other recess and in the meantime I think the Treasury has time to borrow," he said.

Under a nonbinding budget blueprint approved by Congress last spring, the debt limit would rise by $781 billion. Such an increase would bring to more than $3 trillion the total increases in government borrowing authority enacted under President George W. Bush.

Successive years of deficit spending have fed an explosion in U.S. debt. The Bush administration is forecasting a record budget deficit this year of $423 billion.

Asked whether he would seek Senate passage of the full $781 billion debt limit increase, Grassley said, "Well, it might as well be; it doesn't necessarily have to be."

Some conservative House Republicans want to link a debt limit rise to an initiative to reform budget procedures in a way that would force deeper domestic spending cuts.