Senate permits govt to borrow an additional $1.9T

WASHINGTON (AP) — Majority Democrats in the U.S. Senate muscled through legislation Thursday that would allow the government to go $1.9 trillion deeper in debt.

Democratic leaders were able to prevail on the politically volatile 60-39 vote only because Republican Sen.-elect Scott Brown of Massachusetts has yet to be seated. Republicans had insisted on a 60-vote, supermajority threshold to pass the measure. An earlier test vote succeeded on a 60-40 vote.

The measure would put the government on track for a national debt of $14.3 trillion, or about $45,000 for every American, and it served as a vivid reminder of the United States' dire fiscal straits.

The massive increase in the debt limit would allow the Democrats to avoid another vote until after the congressional elections in November. New estimates released by the Congressional Budget Office on Tuesday showed that the United States could run a deficit this year to match last year's record $1.4 trillion shortfall.

To win the votes of moderate Democrats, President Barack Obama promised to appoint a special task force to come up with a plan for dealing with the spiraling debt.

To get the support of more conservative "Blue Dog" Democrats in a House of Representatives vote next week, the measure includes tough new "pay-as-you-go" budget rules to make it harder to run up the deficit with new tax cuts or federal benefit programs. Senate Democrats had been reluctant to approve the new deficit curbs but relented and approved them by a 60-40 vote.

Several Republicans who had earlier voted for the new rules, which would make it more difficult to extend some tax cuts permanently when they expire at the end of this year, switched their positions and opposed it.

They include John McCain of Arizona, who is facing a primary battle with former Rep. J.D. Hayworth, who is winning support from conservative activists.

The current $12.4 trillion debt ceiling is expected to be reached in mid-February.

Congress never has allowed the United States to default on its obligations, which would roil markets and probably cause the government to lose its AAA credit rating.

"We have gone to the restaurant, we have eaten the meal. Now the only question is whether the government will ... pay the bill," said Finance Committee Chairman Max Baucus, a Democrat.

Democrats and Republicans alike share responsibility for running up the debt, but it fell 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 government-issued food stamps to help the poor with meals in tough times.

"Why $1.9 trillion?" said Republican Sen. Judd Gregg. "So that Congress doesn't have to face up to the debt ceiling until after the next election. We ought to face up to it before the next election because the people in this country have a right to know whether or not this Congress is going to do something about controlling ... the debt.

Earlier Thursday, Obama's Democratic allies in the Senate rejected a plan attempting to adopt a modified version of the president's proposal to freeze spending on domestic spending passed by Congress in annual spending bills.

But a 56-strong majority of senators supported the plan, which failed only because 60 votes were required. It serves as a marker for later this year when Congress passes its budget.