CLOSE PROX ACR-LGT GA-SMA. SEE AND AVOID; BUT ARTCC PROVIDED ALT SEPARATION.

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CLRED DIRECT BWZ TO CROSS BWZ AT 7000'. POS NEAR PENNE INTXN (BWZ 302/14). SCATTERED TO BROKEN CLOUDS AT OUR ALT. DSNDING THROUGH ABOUT 9500' CTLR CALLED WITH THE FOLLOWING XMISSION: 'SUGGEST YOU LEVEL OFF AT 9000'; YOU HAVE VFR TFC 12 O'CLOCK INDICATING 8500'.' I ASKED IF WE WERE STILL CLRED TO CROSS BWZ AT 7000'. I ALSO QUESTIONED THE 'SUGGEST.' HE THEN REPLIED; 'I'LL TELL YOU WHAT; MAINTAIN 9000' AND FORGET THE 7000' RESTRICTION.' VIS WAS GOOD; BUT WE WERE IN AND OUT OF SOME CLOUDS AND IN FACT THERE WAS A CLOUD DIRECTLY AHEAD OF US SO THAT WE COULD NOT SEE THE TFC. WE LEVELED OFF AT 9000' AND I LOOKED DOWN THROUGH A HOLE AND SAW THE TFC; A SINGLE ENG LOW WING TAN COLORED PASS DIRECTLY UNDER US AT ABOUT 8500'; ABOUT 500' BELOW US. I'M NOT RPTING THIS AS A NEAR MISS; BUT RATHER TO POINT OUT THE FALLACY AND POSSIBLE RAMIFICATIONS OF THE FAA POLICY WHEREBY CTLRS ARE NOT REQUIRED TO EVEN RPT VFR TFC LET ALONE PROVIDE SEP. I AM THANKFUL THAT THIS CTLR DID THE PRUDENT THING AND LEVELED US OFF AT 9000' BECAUSE UNDER THE FLT CONDITIONS WE HAD; NAMELY IN AND OUT OF CLOUDS; HAD WE CONTINUED OUR DSCNT WE WOULD DEFINITELY HAVE BEEN IN A MIDAIR OR NEAR MIDAIR POS. IF THE OTHER ACFT WAS VFR; IT WAS DEFINITELY MARGINAL AT THE TIME OF THIS INCIDENT.