Democrats Propose $1.9 Trillion Increase in Debt Limit
January 21st, 2010Must See: In 2009, the Federal Reserve Bought 80% of U.S. Debt?!
Via: AP:
Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.
The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.
…
The record increase in the so-called debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress. Last year’s deficit hit a phenomenal $1.4 trillion, and the current year’s deficit promises to be as high or higher.
Congress has never failed to increase the borrowing limit.
“We have gone to the restaurant. We have eaten the meal. Now the only question is whether we will pay the check,” said Finance Committee Chairman Max Baucus, D-Mont. “We simply must do so.”
A White House policy statement said the increase “is critically important to make sure that financing of federal government operations can continue without interruption and that the creditworthiness of the United States is not called into question.”
