WASHINGTON, Feb 2 (Reuters) - The Bush administration's proposed 2005 budget shows the federal debt ceiling set by Congress is expected to be pierced by October, setting up a possible confrontation between Capitol Hill and the White House.
In the 2005 budget proposal, the debt subject to the congressionally set limit is expected to total $7.486 trillion by the end of the current budget year, which is Sept. 30.
That would be about $102 billion above the $7.384 trillion limit set by Congress in 2003 and could force Treasury to seek another tax hike -- a politically tough task in an election year -- or to take accounting measures to get around the limit, as it has done before.
The federal government's fiscal 2005 starts on Oct. 1, 2004.
Last week, the Congressional Budget Office said it expected the debt ceiling to be hit sometime between July and September.
A Treasury spokeswoman, however, said the agency has not yet officially changed its forecast of when the ceiling will be reached, which for some time has been a period between April and October.
"Based on current projections, it may be more like June to October," said spokeswoman Anne Womack Kolton.
The debt subject to the limit, which includes debt sold to meet budget shortfalls as well as debt held in government trust funds, will rise to $10.545 trillion in the 2009 budget year, according to the budget estimates.
When Bush came into office in 2001, the debt subject to the limit stood at $5.646 trillion. As of Friday, Jan. 30, it stood just beneath $7 trillion.
Treasury also said on Monday it expected to borrow from capital markets a net $252 billion in the first six months of 2004 after a record borrowing of $113 billion in the last three months of 2003.
Copyright 2004, Reuters News Service