Saturday, September 15, 2001

The return of war bonds?

They could provide funding for cleanup, anti-terrorism

By Nancy Zuckerbrod
The Associated Press

        WASHINGTON — Sen. Mitch McConnell, R-Ky., says it is time to bring back war bonds.

        He introduced legislation Friday, along with Sen. Conrad Burns, R-Mont., authorizing the Treasury Department to establish a special category of U.S. savings bonds.

        Mr. McConnell said, just as during World War II, the money raised from the bonds would be considered general revenue and not earmarked for specific purposes. But he said the new revenue would help the government pay for rebuilding and anti-terrorism initiatives following Tuesday's attacks, in which hijackers plowed airplanes into the Pentagon, the World Trade Center and a Pennsylvania field.

        “This is a war, and this will help the government finance it,” Mr. McConnell said.

        He said the Treasury Secretary would set very low interest rates on the war bonds. “The advantage to the government would be that it would be able to borrow the money at lower interest rates than otherwise,” Mr. McConnell said.

        Congress authorized spending $40 billion Friday for the rebuilding efforts and the war against terrorism.

        “No one thinks that will in any way pay the tab. It may not even cover the cleanup, much less the additional expenses to the intelligence agencies, the FBI and the military to hunt down these people and complete the job,” Mr. McConnell said.

        He added that Treasury officials were supportive of the legislation, which he hoped to push through Congress next week.

        War bonds raised about $200 billion during World War II, and were first used by the government during the Revolutionary War, according to the Congressional Research Service.

        Mr. Burns said Americans are eager to help in this time of crisis.

        “By investing in these bonds, Americans will have a way to contribute to the solution rather than feeling helpless in the face of the terrible events of this week,” Mr. Burns said.


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