Senate Democrats are counting on their soon-to-expire 60-vote majority to raise the federal debt ceiling by $1.9 trillion so they don't have to take more politically painful votes on government borrowing until after the fall midterm elections.
They have no room for error. In the face of monolithic Republican opposition, they'll need all 60 votes Thursday to let the government continue borrowing almost 40 percent of what it spends.
The legislation would put the government on track for a national debt of $14.3 trillion — equal to about $45,000 for every American — and provide a vivid reminder of the United States' dire fiscal straits. New estimates released by the Congressional Budget Office on Wednesday show that the U.S. this year could run a deficit matching last year's record $1.4 trillion shortfall.
To make raising the debt ceiling easier for moderates and politically endangered Democrats to swallow amid a populist uprising against government borrowing and spending, President Barack Obama promised in his State of the Union address Wednesday night to appoint a bipartisan task force to come up with a plan for dealing with the spiraling debt.
"I will issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans," he said.
The 60 votes Democrats need from their own caucus include those of incumbents facing difficult re-election battles this year as well as longtime opponents of raising the debt limit, such as Sen. Evan Bayh, D-Ind.
The task was made more difficult last week when Republican Scott Brown won the late Edward M. Kennedy's Senate seat from Massachusetts. On Feb. 11, when Brown plans to take office, the Democrats' majority shrinks to 59 and the GOP will have a 41-vote ability to block what it doesn't like in Obama's and Democratic leaders' agendas.
If the $1.9 trillion debt ceiling increase fails, Senate leaders planned to immediately offer a fallback $925 billion increase already approved by the House. But that would require another vote before Election Day to raise the ceiling again.
"It took 200 years to build the federal debt to a total of $1.9 trillion," Sen. Judd Gregg, R-N.H., said. "Now the majority wants to increase the current limit ... by $1.9 trillion so that we can finance the government's borrowing binge long enough to get us past the November 2010 elections."
Congress has until mid-February before the current $12.4 trillion debt ceiling is reached, so there wouldn't be an immediate crisis if the measure were to be defeated. But a losing vote — the tally was scheduled for around noon, when financial markets are open — could unnerve the stock market. Lawmakers in both parties have promised they won't permit a market-rattling, first-ever default on U.S. obligations.
Democrats and Republicans alike share responsibility for running up the debt, but it falls upon Democrats to pass the measure since they control the government. It makes no difference that Republicans routinely backed increases in the debt when former President George W. Bush was in office.
Republicans blame recent generous spending bills enacted by the Democratic-controlled Congress for driving up the debt. Those measures, however, are just one relatively small part of the problem. The far bigger element is a sharp drop-off in tax revenues because of the recession and the economy's slow recovery, as well as higher costs, since more people are taking unemployment benefits and food stamps in tough times.
As part of the debt ceiling bill, the Senate will also vote on new budget rules that would make Congress cover any increases in government benefits with either a corresponding tax increase, spending cuts elsewhere or a combination of the two. The same would apply for new tax cuts, such as the tax credit Obama proposed Wednesday night for small businesses that hire more workers. The tax cuts would have to be "paid" for with corresponding spending cuts or increases in other taxes.
Senate Majority Leader Harry Reid, D-Nev., whose own re-election is in danger this fall, reversed course and came out in support of the new rules after moderate "Blue Dog" Democrats in the House insisted on them as condition for passing a new $14.3 trillion debt ceiling.
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