The Senate voted Thursday to allow the national debt to swell to nearly $9 trillion, preventing a first-ever default on U.S. Treasury notes

[almaty 19]

WASHINGTON (AP) -- The Senate voted Thursday to allow the national debt to swell to nearly $9 trillion, preventing a first-ever default on U.S. Treasury notes.

The bill passed by a 52-48 vote. The increase to $9 trillion represents about $30,000 for every man, woman and child in the United States. The bill now goes to President Bush for his signature.

The measure allows the government to pay for the war in Iraq and finance Medicare and other big federal programs without raising taxes. It passed hours before the House was expected to approve another $91 billion to fund the war in Iraq and provide more aid to hurricane victims.

The partisan vote also came as the Senate continued debate on a $2.8 trillion budget blueprint for the upcoming fiscal year that would produce a $359 billion deficit for the fiscal year beginning October 1.

The debt limit will increase by $781 billion. It's the fourth such move -- increasing the debt limit by a total of $3 trillion -- since Bush took office five years ago.

The vote came a day after Treasury Secretary John Snow warned lawmakers that action was "critical to provide certainty to financial markets that the integrity of the obligations of the United States will not be compromised."

On Thursday, Treasury postponed next week's auction of three-month and six-month bills pending Senate action, though the move was likely to be quickly reversed given the Senate's vote.

The present limit on the debt is $8.2 trillion. With the budget deficit expected to approach $400 billion for both this year and next, another increase in the debt limit will almost certainly be required next year.

The debt limit increase is an unhappy necessity -- the alternative would be a disastrous first-ever default on U.S. obligations -- that greatly overshadowed a mostly symbolic, weeklong debate on the GOP's budget resolution.

Democrats blast Bush

Democrats blasted the bill, saying it was needed because of fiscal mismanagement by Bush, who came to office when the government was running record surpluses.

"When it comes to deficits, this president owns all the records," said Minority Leader Harry Reid, D-Nevada. "The three largest deficits in our nation's history have all occurred under this administration's watch."

Only a handful of Republicans spoke in favor of the measure as a mostly empty Senate chamber conducted a brief debate Wednesday evening.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said Bush's tax cuts account for just 30 percent of the debt limit increases required during his presidency. Revenue losses from a recession and new spending to combat terrorism and for the war in Iraq are also responsible, he said.

As for the $781 billion increase in the debt limit, Grassley said: "It is necessary to preserve the full faith and credit of the federal government."

Before approving the bill, Republicans rejected by a 55-44 vote an amendment by Max Baucus, D-Montana, to mandate a Treasury study on the economic consequences of foreigners holding an increasing portion of the U.S. debt.

At present, foreign countries, central banks and other institutions hold more than one-fourth of the debt, but that percentage is growing rapidly.

Following the debt limit vote Thursday, the Senate was expected to vote late in the day on the budget plan, a nonbinding measure proposing tax and spending guidelines for the next five years.

Specter seeks spending increases

Sen. Arlen Specter, R-Pennsylvania, appears poised to win an increase of $7 billion in new and real funding for education and health research. The $7 billion would effectively be used to break Bush's $873 billion budget cap for 2007, which represents the most significant vestige of fiscal discipline remaining in Senate Budget Committee Chairman Judd Gregg's budget.

The underlying Senate budget plan is notable chiefly for dropping Bush's proposed cuts to Medicare and for abandoning his efforts to expand health savings accounts or pass legislation to make permanent his 2001 tax cut bill.

Unlike last year, when Congress passed a bill trimming $39 billion from the deficit through curbs to Medicaid, Medicare and student loan subsidies, Senate GOP leaders have abandoned plans to pass another round of cuts to so-called mandatory programs.

But Gregg's measure re-ignites last year's battle over allowing oil drilling in Alaska's Arctic National Wildlife Refuge, since it would let Senate leaders bring an ANWR drilling measure to the floor under rules blocking a filibuster by opponents

[Mr. Big Dog 10,747]

The debt limit will increase by $781 billion.

Well, so we can drag Iraq out another 15 years w/o having to worry about actually paying for any of it. For the time being...

Borrow and Spend like there's no tomorrow: That will be the Bush II legacy.

Edited March 16, 2006 by ET-US2004

[Sister Fracas 5]

I wish I could call my bank and say...hey, I'm gonna go into some major debt here, but it's ok....my grandkids will pay it off.....ooops, I'm not going to have any grandkids if I don't have kids! Bah

[almaty 19]

equals out to $30,000 for each man ..woman and child ....damn...

[Mr. Big Dog 10,747]

equals out to $30,000 for each man ..woman and child ....damn...

Does that mean that Nani and I have an additional 30K of debt on the way or does that mean that our soon to be born baby will push the average down for everyone about a half a cent or so? Either way, we're fcuked fiscally, I'm afraid...

[Mirorgate 0]

equals out to $30,000 for each man ..woman and child ....damn...

Damn.. bastages just dbled my student loans with out asking me

[almaty 19]

equals out to $30,000 for each man ..woman and child ....damn...

Damn.. bastages just dbled my student loans with out asking me

chopf##ks

[Trumplestiltskin 5,791]

equals out to $30,000 for each man ..woman and child ....damn...

Damn.. bastages just dbled my student loans with out asking me

chopf##ks

Wow.

In the UK Mrs Thatcher did pretty much the same thing with the UK when she was in power. Our economy is still paying the price for decisions made during her administration.

Shame the IRA missed her really

[Jasman0717 9]

I have no idea what 9 trillion looks like but would assume it is larger than a bread box

Edited March 17, 2006 by jasman0717

[Texanadian 10]

9 trillion = $9,000,000,000,000

[Satisfaction 1]

I have no idea what 9 trillion looks like but would assume it is larger than a bread box

Yes indeed. You can buy a bunch of bread boxes with 9 trillion When the inflation goes sky-high, then yes, that might be the price you'll pay for your breadd box. But not to worry, one can still wait a couple of years - until 2015? - for that to happen (or perhaps earlier, depending on how much further into debt the government goes in the next couple of years)

F... the stock market. Let's go shopping for bread boxes tomorrow, seems like a good investment!!!!

[mikeize 0]

I have no idea what 9 trillion looks like but would assume it is larger than a bread box

ahh, but is it larger than a breadLINE?...

-mike

[Texanadian 10]

Never fear, president Bush has said he will cut the deficit in half by 2008.

http://usgovinfo.about.com/library/weekly/aa100600a.htm

Texanadian: Oh how these numbers have changed.

The money was flying, rather, our money was flying Tuesday night as presidential candidates George W. Bush ® and Al Gore (D) squared off in the first of three nationally televised debates.

For most of the 90-minute debate, candidates focused on issues and programs that will impact American taxpayers.

As you listen to and read about the Bush - Gore debates, remember that all the programs and dollar amounts thrown about may mean little or nothing at all unless the same political party ends up controlling both the White House and Congress. For example, the current Democratic controlled White House and Republican-controlled Congress have been unable to agree on any number of proposed tax cut plans. The following are what the candidates "plan" or "want" to do if they are elected. Not what they absolutely will be able to do.

Taxes Cuts and the Surplus

Bush and Gore agree that over the next 10 years, $25 trillion in revenues minus $21 trillion in spending will result in a $4.56 trillion surplus. Bush and Gore do not agree what to do with that surplus.

BUSH: I want to take one-half of the surplus and dedicate it to Social Security.....

Gore would: Eliminate the national debt by 2012.

Bush would: Eliminate the national debt by 2016.

Texanadian: And here we sit with a new 9 trillion dollar debt ceiling.

[Fischkoepfin 1]

At present, foreign countries, central banks and other institutions hold more than one-fourth of the debt, but that percentage is growing rapidly.

Great! Let's just hope those foreign debtors don't get scared. From what I hear they are not too happy about rising inflation rates and if they decide to cash in their bonds or transfer their financial reserves to another currency, the bubble will burst and we will wish the debt ceiling would have stayed where it was.

[Trumplestiltskin 5,791]

And in today's news, Bush et al stated (albeit indirectly) that they want to open up a new war front in the middle-east.

At this rate, the war on terrorism is going to do more economic damage to the US than the terrorists ever did...