House to Vote on $1.9 Trillion More Debt

(AP)  Facing a politically excruciating vote, House Democratic leaders are counting on new budget deficit curbs to help smooth the way for a bill allowing the government to go $1.9 trillion deeper into debt over the next year - or about $6,000 more for every U.S. resident.

The debt measure set for a House vote Thursday would raise the cap on federal borrowing to $14.3 trillion. That's enough to keep Congress from having to vote again before the November elections on an issue that is feeding a sense among voters that the government is spending too much and putting future generations under a mountain of debt to do it.

Already, the accumulated debt amounts to $40,000 per person. And the debt is increasingly held by foreign nations such as China.

Passage of the bill would send it to President Barack Obama, who will sign it to avoid a first-ever, market-rattling default on U.S. obligations. Democrats barely passed it through the Senate last week over a unanimous "no" vote from GOP members present.

To ease its passage, Democrats attached tougher 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 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 veterans' pensions. Current rules lack such teeth and have commonly been waived over the past few years at a cost of almost $1 trillion.

Skeptics say lawmakers also will find ways around the new rules fairly easily. Congress, for example, can declare some spending an "emergency" - a likely scenario for votes later this month to extend jobless benefits for the long-term unemployed.

And, indeed, there already are exceptions to the new rules, such as for extending former President George W. 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.

In agreement with Mr. Obama's budget earlier this week, there is no exception for taxpayers in the two highest tax brackets whose marginal rates are due to rise by 3 percent or 4.6 percent to a pre-Bush maximum 39.6 percent next January.

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.

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.

"We don't have a choice," said Rep. John Tanner, D-Tenn. "We are on an unsustainable march toward a fiscal Armageddon."

Mr. 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.

[CBSisCommunist5]

Tax and spend Baby tax and spend...then blame Bush/Cheney

[Brokennews]

If you think that Bush handed Obama a mess, just wait till you see the mess Obama will be passing to the next Prez. in three years!

[jankebenzone]

It's one thing to be reckless with your own money,but completely absurd to be reckless with someone else's money. Perhaps by becoming broke and destitute will demos finally see the error of their vote.

[taiotoshi8602]

I partially agree with you jankebenzone, the current administration has been spending money at an alarming rate. However, it should be noted that the last administration spent huge (the full amounts are not yet known)amounts of money on wars. Yes, I have heard all the "stop blaming Bush" rhetoric, and I partially agree with it but the bottom line is that our country has in the past 10 administrations run a budget deficit. Realize that this deficit is cumulative and has been mounting over the years. Not all of this catastrophy is Obama's (although a significant portion is). The previous administration bears a large part of blame for this situation. Not to mention, they created the financial mess that spurred a lot of Obama's spending spree.

That said, it is well past time that our government considers the debt it is leaving to the coming generations. I am in my 50's and have been hearing that Social Security has been going broke since I was in high school but in the intervening years no administration has stepped up to tackle this coming crisis. The baby boomers are starting to retire and the problem is only going to get worse. Some SS recipients today draw more in a year than they paid in their entire lives.

Our government is a bloated beaurocacy that now longer even thinks a million dollars is a significant amount of money .... therein lies the problem and it is not a partisan one. Peace All

[wfw3536]

Obama's goal is to spend until even China will not lend us more money. It won't be long if this administration spends 40% more than we have. And his plan is to keep spending for another 10 years. When is this administration going to do something other than tax and spend our country out of existance.

[consciousnes]

YEP, the House is doing EXACTLY what they have been telling the American public "NOT" to do with their financial situation.
Just get another credit card and everything will be ok, we can pay the first 150 cards with the last one we got.

[troutfishyman]

by Mortar_29 February 4, 2010 12:54 PM EST
Empire, he doesnt get it (surprise?!?!). All of it is their money. Every dime I earn is my money. Even the money that is eventually taxed. It is ALL mine!



One has certain financial responsibilities when living in a society. Those services you take for granted are not free. There is no such thing as a free lunch.

[starving1968-3]

by Empire-George- February 4, 2010 11:49 AM EST
paid back a tax cut ? that's how sick you are.

Why would someone pay back something that is theirs ? I've had enough of your lack of understanding of simple principles, like when the government takes your income, and then takes slightly less, you don't OWE them, you don't PAY THEM BACK for reducing your tax burdens.....forget it






Pay back something that is theirs?

Since when are "income taxes" the sole property of the wealthy?

I pay taxes at a rate of 28% and don't get any of it back, they pay taxes at a rate of 15% or less, after they had it REDUCED, and you consider that to be "their money"?!?!?!

[Mortar_29]

Empire, he doesnt get it (surprise?!?!). All of it is their money. Every dime I earn is my money. Even the money that is eventually taxed. It is ALL mine!

Anytime people get to keep more of their own money, rather than have it confiscated by the government...that is a good thing!!

But people like Starving want to worry about what their neighbor has or doesnt have, when it is none of their business what their neighbor has or doesnt have..

So, the money doesnt belong to the government...it belongs to those that earned it. But, as usual Empire...you know he will never get that!

[starving1968-3]

Incorrect. You pay taxes in part to fund this nation and it's programs.

I know that YOU don't think that YOU have to pay for our military, police, FBI, CIA, or any of the other miriad of agencies tasked with keeping us safe, or hunting down and killing our enemies, in addition to funding rest of the federal government. It's apparent that you want the United States government to cease operations and allow our nation to fall into "third world status", and let our country end up like Haiti or Somalia. You've made that abundantly clear.

If you don't want to pay taxes, in accordance with the US constitution, then pack your bags and get the FFFF out. And take your ultra-wealthy traitors with you.

[starving1968-3]

by infantryman1968 February 4, 2010 12:25 PM EST
hungry1968

You really have no idea that your revolution is over do you?






As long as conservatives have the potential to regain power, then the revolution must be considered to be "on going".

We must be vigilant and NEVER let them retake control of Washington again.

The fate of our nation hangs in the balance because of it!!

[infantryman1968]

If thats the case then why are you and Obama and all of the things you stand for being rejected all over the country?

How does your family feel about you blaming everything that you were not able to accomplish in your life on Bush, Cheney, Palin etc etc Everyone but yourself?

[Mortar_29]

President Obama is being disingenuous when he says that the budget deficit he faced "when I walked in the door" of the White House was $1.3 trillion. He went on to say that he only increased it to $1.4 trillion in 2009 and was raising it to $1.6 trillion in 2010.

Congressman Joe Wilson might have said "you lie," but I'll settle for "you distort."

Here are the facts:

In 2008, Bush ran a deficit of $485 billion. By the time the fiscal year started on October 1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was about $600 billion at the start of the fiscal crisis. That was the real Bush deficit.

But when the fiscal crisis hit, Bush had to pass TARP in the final months of his presidency which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit - officially - up to $1.3 trillion. But not really. The $700 billion was a short term loan. $500 billion of it has already been repaid.

So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won't be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.

Then...he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. This $300 billion was, of course, totally qualitatively different from the TARP money in that it was spending not lending. It would never be paid back. Once it was out the door, it was gone. Other spending and falling revenues due to the recession pushed the final numbers for Obama?s 2009 deficit up to $1.4 trillion.

So, effectively, Obama came close to doubling the deficit.

Obama seems not to understand that the deficit is the jobs problem. To add to the deficit in the hope of creating more jobs is an oxymoron. Additional deficit spending just crowds out small businesses trying to borrow money to create jobs and consumers seeking credit to buy cars and homes.

Soon, when the Fed stops printing money and we have to borrow real funds from real lenders, the high deficit will send interest rates soaring, further retarding growth and creating a cost-push inflation.

The interest rate we are now paying for the debt - about 3.5% - is totally artificial and based on the massive injection of money supply created by the purchase of mortgage backed securities by an obliging Federal Reserve. Once these injections of currency/heroin stop, the rate will more than double, sending our debt service spending into the stratosphere. Once we had to choose between guns and butter. Now we will have to choose between guns and butter on the one hand and paying our debt service on the other.

Obama's program of fiscal austerity in this new budget is a joke. He freezes very selected budget items while he shovels out new spending in his stimulus packages. If he wanted to lower the deficit, here's what he could do:

1. Cancel the remaining $500 billion of stimulus spending and

2. Cancel the $300 billion of spending in stimulus II.

Those are the real numbers.

[Empire-George-]

Starvin' - I think we have exhausted this issue...Hope you have a good day, and I'll catch you later, (catch you making another lie....j/k)

[starving1968-3]

I don't blame you Joe.

I'd tuck tail and run too.

Take it easy, and have a good day.

[infantryman1968]

hungry1968

You really have no idea that your revolution is over do you?