House agrees to $1.9 trillion more debt
WASHINGTON
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's approaching
$1.6 trillion under the budget submitted by President Barack Obama
this week.
The huge increase -- to $14.3 trillion -- in the cap on federal
borrowing was designed by Democratic leaders to ensure that the
rank and file won't have to vote again to run up another increase
before facing voters increasingly angry over government 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," House Minority Leader John
Boehner, R-Ohio, said.
Economists warn that the rapidly-rising debt could force
interest rates higher and, if left unchecked, could have even worse
consequences for the economy.
Passage of the bill sends it to 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. 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 Obama to hit a record $1.56 trillion for the budget
year ending Sept. 30. The new rules would require future spending
increases or tax cuts to be paid for with 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 over 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.
"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,"
Rep. Pete Sessions, R-Texas, said.
Skeptics say lawmakers also will find ways around the new rules
fairly easily. For example, Congress can declare some spending an
"emergency" -- a likely scenario for votes later this month to
extend jobless benefits for the long-term unemployed.
There already are exceptions to the new rules, such as for
extending former Bush's middle-class tax cuts past their expiration
a year from now. That would add $1.4 trillion to the federal debt
over the next decade. Legislation giving doctors relief from
Medicare payment cuts would also get an extended break from the
rules.
But some new White House initiatives, such as doubling the child
care tax credit for families earning less than $85,000, also would
have to live within the rules, as would continuing subsidies for
laid-off workers to buy health insurance -- unless lawmakers make
another exception.
And the rules also mean that two years from now, lawmakers would
have to raise taxes to pay for continuing lower tax rates on large
inheritances and to protect millions of middle-class taxpayers from
feeling the bite of the alternative minimum tax.
"We will have the will and we will have the discipline," House
Majority Leader Steny Hoyer, D-Md., promised.
The so-called pay-as-you-go rules have been a mantra with
conservative "Blue Dog" Democrats in the House, who insisted they
wouldn't vote to raise the debt ceiling without them.
Obama's budget projects the government's debt doubling to $26
trillion over the next decade. It offers few solutions for
seriously closing the gap other than promising to appoint a
bipartisan commission to come up with a plan to address the
problem. But most Republicans aren't stepping up as well.