House faces tough vote on $1.9 trillion more debt
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 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 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.”
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.
The bill is H.J. Res. 45.