House approves $1.9 trillion increase in US debt
Bill includes new rules to curb deficit
WASHINGTON - The House voted yesterday to allow the government to add $1.9 trillion of debt - an increase of about $6,000 for every US resident and a vivid election-year reminder of the nation’s troubled financial condition.
The huge debt increase, approved 217 to 212, is only enough to keep the government afloat for about another year as it borrows more than 40 cents of every dollar it spends on programs such as defense, health care, feeding the poor, and protecting the environment. The budget tops $3.7 trillion this year, with the deficit approaching $1.6 trillion.
The huge increase - to $14.3 trillion - to the cap on federal borrowing was designed by Democratic leaders to ensure that legislators would not have to vote again on another increase before the November midterm elections, when they could face voters increasingly angry over government spending and debt.
“This debt is being piled on the backs of our kids and grandkids with no relief in sight,’’ said the House minority leader, John Boehner of Ohio.
Economists warn that the rapidly rising debt could force interest rates higher and, if left unchecked, could have serious consequences for the economy.
The bill now goes to President Obama, who will sign it to avoid a default on US obligations.
“Defaulting is not an option,’’ said Representative James P. McGovern, a Worcester Democrat and a member of the Budget Committee. “If the United States defaults, investors will lose confidence that the US will honor its debts in the future.’’
Thirty-seven Democrats, mostly from GOP-leaning districts, voted against the measure. So did every Republican, even though they routinely supported previous increases in the borrowing cap when their party controlled Congress or when Republican George W. Bush was president. All of the representatives from Massachusetts joined McGovern in voting for the new deficit ceiling.
Senate approval last week, which fell along party lines, was only possible because Scott Brown had not assumed office. The Massachusetts Republican was sworn in yesterday.
To help win passage, Democrats also adopted, in a 233 to 187 vote, budget rules designed to curb the deficit, projected by Obama to hit a record $1.56 trillion for the budget year ending Sept. 30. The 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 such programs as Medicare, farm subsidies, and unemployment insurance. Current rules lack such enforcement and have been waived over the past few years at a cost of about $1 trillion.
Obama issued a statement praising passage of the pay-as-you-go rules but did not mention the debt limit increase.
“It is no coincidence that when we last had statutory pay-go, during the 1990s, we turned deficits into surpluses,’’ Obama said. “The passage of statutory pay-go today will help usher out an era of irresponsibility and begin putting the country back on a fiscally sustainable path.’’
Most other benefit programs - including Medicaid, Social Security and food stamps - would be exempt from such cuts, leading Republicans to charge that the new rules are just as weak as the old ones.