House allows $1.9 trillion in debt
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WASHINGTON -- The House voted Thursday to allow the government to go $1.9 trillion deeper in debt -- an increase of about $6,000 more for every U.S. resident, providing a vivid election-year reminder of the nation's perilous financial condition.
The huge debt increase, approved 217-212, is only enough to keep the government afloat for about another year, as it borrows more than 40 cents of every dollar it spends on programs like defense, health care, feeding the poor and protecting the environment. The budget tops $3.7 trillion this year, and the deficit is approaching $1.6 trillion under the budget President Barack Obama submitted this week.
The huge increase -- to $14.3 trillion -- in the cap on federal borrowing was designed by Democratic leaders to ensure that rank-and-file lawmakers won't have to vote again to run up another increase before facing voters increasingly angry over federal spending and debt in the November midterm elections.
Already, the accumulated debt amounts to roughly $40,000 per person. "This debt is being piled on the backs of our kids and grandkids, with no relief in sight," said House Minority Leader John Boehner, R-Ohio.
Economists warn that the rapidly-rising debt could force interest rates higher and, left unchecked, could have still-worse consequences for the economy.
Passage of the bill sends it to Mr. Obama, who will sign it to avoid a first-ever, market-rattling default on U.S. obligations. "I can't think of a more reckless or irresponsible act. Defaulting is not an option," said Rep. Jim McGovern, D-Mass. "If the United States defaults, investors will lose confidence that the U.S. will honor its debts in the future."
Thirty-seven Democrats, mostly from GOP-leaning districts, voted against the measure. So did every Republican, even though they routinely supported prior increases in the borrowing cap when their party controlled Congress or when Republican George W. Bush was president.
Senate approval last week on a party-line tally was only possible because Massachusetts Republican Scott Brown had yet to assume office. Mr. Brown was being seated Thursday.
To help win passage, Democrats also adopted -- in a 233-187 vote -- budget rules designed to curb a spiraling upward annual deficit, projected by Mr. Obama to hit a record $1.56 trillion for the budget year ending Sept. 30. The new rules -- known as "pay as you go," or "paygo" -- would require future spending increases or tax cuts to be matched by either cuts to other programs or equivalent tax increases.
If the rules are broken, the White House budget office would force automatic cuts to programs like Medicare, farm subsidies and unemployment insurance. Current rules lack such teeth and commonly have been waived in the past few years, at a cost of about $1 trillion.
Most other benefit programs -- including Medicaid, Social Security and food stamps -- would be exempt from such cuts, leading Republicans to charge that the new rules are just as weak.
Mr. Obama issued a statement praising passage of the statutory pay-as-you-go rules, but didn't mention the debt limit increase.
"It is no coincidence that when we last had statutory paygo, during the 1990s, we turned deficits into surpluses," Mr. Obama said. "The passage of statutory paygo today will help usher out an era of irresponsibility and begin putting the country back on a fiscally sustainable path."
But Rep. Pete Sessions, R-Texas, said: "In place of real fiscal discipline, it offers a phony pay-as-you-go rule that is more loopholes and exceptions and does nothing to tackle our government's long-term structural deficit."
First Published February 5, 2010 12:00 am