WASHINGTON — The Senate voted Thursday to allow the U.S. government to go a whopping $1.9 trillion deeper in debt, offering a vivid election-year reminder that the government has to borrow 40 cents of every dollar it spends.
Democrats needed all the 60 votes at their disposal to muscle the debt limit legislation through — and were only able to win the vote because Republican Sen.-elect Scott Brown of Massachusetts has yet to be seated.
The measure would put the government on track for a national debt of $14.3 trillion — more than $45,000 for every man, woman and child in the United States. And the debt is increasingly held by foreign nations such as China.
The measure passed 60-39 under ground rules insisted upon by Republicans that required 60 votes to pass it.
While Thursday’s vote went smoothly, it came after weeks of difficult negotiations between the White House and both House and Senate Democrats.
Moderate House Democrats came away with a tough new “pay-as-you-go” budget law to make it harder to run up the deficit with new tax cuts or federal benefit programs. Senate Democrats won a promise from President Barack Obama to name a bipartisan task force to come up with a plan for dealing with the spiraling debt — but one whose recommendations are unlikely to ever see an yes-or-no vote.
Meanwhile, Obama won symbolic support for his proposal for a partial domestic spending freeze.
A 56-strong majority of senators supported a plan, by Sens. Jeff Sessions, a Republican, and Claire McCaskill, a Democrat, that was strikingly similar to Obama’s freeze on domestic programs annually funded by Congress. It failed because 60 votes were required, but the vote tally serves as a positive sign that even though there is significant opposition from Democratic liberals, Obama’s domestic freeze is likely to be adopted when Congress debates its budget.
The debt limit increase comes as a relief to Democrats worried about having to cast multiple, bite-sized increases in the debt in the run-up to the critical November elections. Instead, the new limit would allow majority Democrats to avoid another vote until after the November vote.
The House is slated to vote on the debt legislation next week to send it to Obama to be signed into law. The new pay-as-you-go rules, approved by the Thursday on a 60-40 vote, should help House leaders round up the votes, despite the political anxiety caused by Brown’s stunning win in heavily-Democratic Massachusetts last week.
The new budget rules are complicated, but basically are designed to curb the spiraling deficit by requiring spending increases or tax cuts to be “paid for” with cuts to other programs or tax increases. If the rules are broken, the White House budget office would force automatic cuts to programs like Medicare, farm subsidies and veterans’ pensions.
The idea is that the threat of cuts to such popular programs would be enough to block Congress’ free-spending ways, but skeptics say lawmakers can find ways around them fairly easily. Weaker pay-as-you-go rules are in place already, but have been routinely waived.
The new rules would have the force of law and would make it harder to extend permanently some tax cuts — especially on large estates and middle-class tax filers threatened by the alternative minimum tax — that expire at the end of this year.
But middle-class tax cuts enacted in 2001 and 2003, however, would not be affected, costing $1.4 trillion over the next 10 years. Extended unemployment benefits for the long-term jobless coming to a vote next month may also be exempt at a cost of tens of billions dollars more.
Republicans generally opposed the rules as a recipe for tax increases. There had been a few GOP supporters in the past, but Republicans who had voted for the rules in earlier years switched their positions and opposed them.
They included John McCain of Arizona, facing a primary battle with former Rep. J.D. Hayworth, who’s winning support from conservative anti-tax “tea party” activists.
Obama’s promise to name a bipartisan deficit task force promises to have less of an impact.
Unlike a proposal rejected this week that would legally bind Congress to vote on a commission’s plans, there’s no way to force the Senate to take a vote on the panel’s recommendations. Those would likely blend tax increases with painful spending curbs to government health care and pension programs — which would probably die as a result of delaying tactics..
And under an agreement forged by Vice President Joe Biden, the House would not even vote unless the Senate were to miraculously adopt the commission’s blueprint in a post-election, lame-duck session.
The 18-member budget commission — eight members would be Republicans — would have most of the year to come up with a plan to cut the deficit to 3 percent of the size of the economy by 2015. That would require tax increases and spending cuts of $400-500 billion in just that year — and still leave a deficit in the $500 billion range.
Congress has never allowed the United States to default on its obligations, which would roil markets and likely cause the government to lose its AAA credit rating.
“We have gone to the restaurant, we have eaten the meal,” said Finance Committee Chairman Max Baucus, a Democrat. “Now the only question is whether the government will … pay the bill.”