Friday, December 11, 2009

Democrats to seek higher limit on the federal debt

From the Washington Post...
Measure to be included in defense bill
House Republicans vow to block Pelosi's plan

House Speaker Nancy Poliosi (D-Calif.) said Thursday that she will include legislation to raise the debt ceiling in a must-pass defense spending bill headed to the House floor next week.

"We need to have a vehicle so that the Senate can vote on it, and it is our intention to have something on the Department of Defense bill," she told reporters at her weekly news conference.

House leaders have not settled on how much to raise the debt ceiling, now at $12.1 trillion. Figures as high as an additional $1.925 trillion are under discussion, aides and lawmakers said. Republicans vowed to block such a move, despite the potential consequences.
"It will be an opportunity for us to point out the excessive spending that's going on in this Congress," said House Minority Leader John Boehner (R-Ohio).

Treasury officials have told congressional leaders that they must raise the cap before Dec. 31 or risk running out of money for Social Security checks and veterans' payments due in early January, Democrats said. By law, the Treasury can borrow no more than Congress legally permits.

The House voted this year to raise the debt limit to nearly $13 trillion, but the Senate never acted on the matter. Now, the issue is complicated by the competing demands of moderates in both chambers, who are expressing increasing concern about the nation's rising debt load.

President Obama called this week for a jobs bill to combat the nation's 10 percent unemployment rate. That could add billions of dollars to budget deficits already driven to record heights by the worst recession in a generation and the emergency measures intended to ease its effects.

Senate Budget Chairman Kent Conrad (D-N.D.) and other moderate Democrats have threatened to vote against a higher debt limit unless Congress creates a bipartisan task force, composed primarily of lawmakers, to address the budget problem. Conrad and Senator Judd Gregg (R-N.H.) introduced legislation Wednesday that would invest such a body with broad power to force tax increases or spending cuts through Congress.

"We understand in the short term you add to debt to avert [economic] collapse. We understand that. We also understand at some point you need to pivot to address our long-term debt, because at some point, it's unsustainable," Conrad said Thursday.

Fiscal conservatives in the House known as"blue dog" Democrats say that any plan to raise the debt ceiling should include a new pay-as-you-go law that would prohibit lawmakers from approving tax cuts or spending increases without offsetting the cost elsewhere.

"If we're going to have to take a vote that acknowledges our fiscal irresponsibility, let's add something that changes our habits in the future," said Rep. Walt Minnick (D-Idaho).

The Senate opposes the proposed pay-go rules, and Pelosi opposes giving an independent task force the power to make budget decisions.

Treasury Secretary Timothy F. Geithner and other White House officials met Thursday with Conrad,Senate Majority Leader Harry Reid (D-Nev.) and more than a dozen other senators to develop a version of the task force that Obama and Pelosi might accept. One possibility: Obama could appoint a task force by executive order, although that body would be significantly weaker than one created by law. After the meeting, Conrad said he would consider the idea, but only if lawmakers rejected his original proposal.

"The first thing we want is a vote," he said.

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