Image provided by: Texas A&M University
About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Nov. 22, 1982)
national Battalion/Page 10 November 22,1982 U.S. debt may force interest rates to rise Warped by Scott McCullar United Press International CLEVELAND — Interest rates could make an about-face and skyrocket again unless steps are taken to reduce the national debt, Cleveland Federal Reserve Bank President Karen N. Horn says. Horn, former treasurer of Pennsylvania Bell, told a Cleve land City Club audience Friday she sees possible problems next year, including a rise in interest rates. The federal debt, projected to increase to $200 billion over the next two years, must be fi nanced by borrowing, she noted. Such borrowing could wring funds out of the nation’s finan cial market, drying up funds needed for the economic recov ery and sending interest rates up again. “Over the period (1983-84), we must either curb the rise in federal outlays, increase taxes, or expect to see interest rates driven sharply upwards by the collision of the demand for loan able funds,” she said. Horn said a sharp rise in in terest rates could damage the public’s trust in the Federal Re serve and prompt Congress to push the Fed to lower interest rates. “Should interest rates rise early in the recovery Congress may put substantial pressure on the Federal Reserve to abandon its disinflationary goal,” said Horn. “We allowed an inflationary thrust to develop in the Amer ican economy, and through overly permissive monetary policies allowed it to accelerate,” Horn said. She said the progress to bring down inflation “cannot endure without a monetary policy that reduces the growth of money permanently.” AS A TRIBUTE TO GARY TRUDEAU, HI5 COtAlC STRIP, "DOONESBURi", AND HIS UPCOMING VACATION... (gi (^) ^ f \ /• a V 'Xy) _ ^ - ..THERE, WEL'VE TU5T BEEV ON A 30 MIA/UTE SABBATICAL. Committee may oust solon She also defended the current drop in interest rates. “The sharp decline in interest rates that has occurred since July, largely in response to reduced inflation, is a most hopeful de velopment,” she said. Gramm may quit party United Press International WASHINGTON — A source on the House Budget Commit tee says Rep. Phil Gramm, a leading “Boll Weevil” Democrat, will be dropped from the panel in January. Gramm may quit his party in retaliation. “We’re waiting to see what happens when the new Con gress organizes,” said Gramm’s press secretary Larry Neal. “There may be some move to punish him for his conservative voting stance.” The committee source said it is almost certain Gramm will be dropped from the committee in January when the 98th Con gress convenes and the Demo cratic majority makes commit- teee assignments. The source, a Democrat, said no similar moves will be made against other conservative Democrats on the committee who voted for Reagan’s policies. Neal said Friday Gramm is concerned about staying in a party that “can’t make room to MONDAY & THURSDAY NIGHT Professional Male Dancer night! From LaBares in San An tonio and Houston. Male Dancer Night! 4 For 1 Highballs! 7-8 p.m. Doors open to the men at 10 p.m. s 2 Cover from 7-8 p.m. $ 3 8-10 p.m. DALLAS NIGHT CLUB IN THE DEUX CHENE COMPLEX BEHIND K-MART. COLLEGE STATION 693-2818 :/ Book Clearance STACK A FOOT OF BOOKS AND THEY ARE YOURS FOR ONLY $QOO Choose from over 1,500 titles at our sales table Now in Progress At tolerate a conservative on a key committee.” If Gramm loses the committee assignment, Neal said, “he might look at some alternatives, including switching parties.” Gramm is not being singled out for his voting record, the source said, but because he sat in on Democratic budget strategy meetings in 1981 and then gave information to the Reagan administration. Gramm has de nied that charge. An aide to House Speaker Thomas O’Neill, D-Mass., said the speaker was not leading any movement to oust Gramm, but that it was possible a move to do so would come from rank-and- File Democratic congressmen. “They pay a certain price for it (loyalty),” he said. “A lot of them feel there needs to be some kind of discipline.” Neal said there has been no agreement made with Republi cans that Gramm would be put on the committee if he left the Democratic Party. “We wish there was something worked out, but there is no deal.” Gramm was a leader of con servative House Democrats who joined with the Republican minority last year to pass Reagan’s tax and budget cuts. The group was given the name “Boll Weevils” because mans came from the South, where the boll weevil beetle plagues the cotton crop. Speculation of a possible par ty shift by Gramm, who won reelection Nov. 2 as a Democrat with no GOP opposition, has been based on his hiring ofV Lance Tarrance and Associates of Houston to conduct polls in his district. Tarrance regularly conducts polls for Republican politicians. “The congressman and Lance Tarrance are old friends,” Neal said. “Congressman Gramm had some other polls conducted by a New York firm duringthe primary campaign and thought they charged a little too much,so he switched to Tarrance.” SHRIMP ARAMA MONDAY AND TUESDAY NIGHT $5.95 FRIED SHRIMP OUR REGULAR $7.95 Platter with all the trimmings AGGIE OWNED AND OPERATED CLASS ’60 HI££’S SSGTOOD ana STSGK East 29th Street at Carter Creek .*44 The American Heritage Dictionary NEWCOLL1LGE EDITION -W*-. THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE tttf W<'JtOV\RYH»«'m»Mt,XC1!Ol)L AN!) Of fit fc mfcrtJw P^mI of It I fxpi riK on ofiaag rtiv tttfn w«*U •We ,td»» • Ovvf f'WtWWl cmro-* nub vlwf.fstawtabf* “Mu^jihocoig.mhv • fum. dwci-wiv owl m.q* of Ut ih» ♦ Red Cover Now on Sale $0°° Reg. ’IS 98 NOW DEL ti< at D “j it; U.S. w S( AG( ' 7 H TAf sa D COS g> la G TA? wi M CLA UNI Bi Fo Ca Unili SACR- Gov. Edi ordered ( to help I 2,400 wo off in the Co.’s asse The g has insti Economii and state work wi Auto Wo tatives to and place displaced The team is c ctors of tl nomic a ment, in employm Ford that the i ■■■■ * Shi Any * We forwi * 16 sona ‘ Ser East, ’ Gei cycle Giv rates m ■•■■I