Senate increases federal borrowing limit
WASHINGTON - The Senate agreed yesterday to raise the legal limit on government borrowing to a record $14.3 trillion, a total that would permit the Treasury Department to cover the nation’s bills through the end of this year.
The vote fell strictly along party lines, with all 60 Democrats supporting and 39 Republicans opposing a plan to increase the cap by $1.9 trillion. Democratic leaders were able to prevail only because Senator-elect Scott Brown of Massachusetts, a Republican, has yet to be seated. If lawmakers had approved a smaller increase, Democrats would have had to revisit the deeply unpopular topic of the soaring national debt before facing voters in November.
Even as they expanded the Treasury’s ability to keep borrowing, Democrats moved to rein in the historically large budget deficits, which are projected to expand the debt through the end of this decade. As part of the debt-limit bill, the Senate agreed in another party-line vote to revive the pay-as-you-go budget rules that bar lawmakers from increasing future deficits through tax cuts or new entitlement spending. A similar rule helped the nation balance its budget in the 1990s, but the new version would carve out $1.6 trillion in exceptions - so Democrats could extend tax cuts for the middle class and avert a scheduled pay cut for doctors who treat Medicare patients without finding ways to offset those costs.
With public concern rising over the budget mess deepened by last year’s recession, President Obama has proposed a three-year freeze on much of the government’s discretionary spending, a move that would generate modest savings but send a powerful political signal.
Obama also has pledged to create a bipartisan commission on cutting deficits.
The White House delivered written assurances yesterday to a group of conservative Senate Democrats that the commission’s recommendations would get an up-or-down vote in both chambers of Congress by the end of this year. More than a dozen Democrats had threatened to vote against raising the debt cap by such a substantial sum.