Tuesday, December 15, 2009

Raising federal debt limit

Democrats are arranging to allow the government's debt to distend by nearly $2 trillion to pay for the wars in Afghanistan and Iraq. The effort has nervous moderate Democrats maneuvering to win different deficit-cutting tools as a charge for their votes, sparking battles between the House and the Senate and with influential interest groups on both the right and the left.

The whole strategy is precarious because of brinksmanship involving moderate and blue-dog democrats who are insisting a bipartisan deficit reduction task force with exclusive powers to propose spending cuts or tax increases that would assure House and Senate votes.

Playing tit-for-tat, moderate House democrats have that their votes for any debt limit increase depend on securing a "pay-as-you-go" budget law ensuring that new tax cuts or new spending programs do not add to deficits.

Under a pay-as-you-go rule, if compensated cuts or revenue hikes are not found to pay for new policies, across-the-board spending cuts would hit targeted programs such as farm subsidies and Medicare.

Minority republicans are outright refusing to offer any support for raising the debt ceiling.

Rep. Todd Tiahrt (R-KS) said, "Instead of reducing the size of government and controlling spending, Democrats are planning to raise the debt limit by $1.8 trillion, putting American taxpayers in even deeper debt to countries like China".

Vice President Joe Biden, Majority Leader Steny Hoyer, (D-MD.), blue-dog leaders and Senate Budget Committee Chairman Kent Conrad, (D-ND), were engaged in numerous sets of negotiations in an effort to shatter the impasse between House and Senate dems.

But that bill passed the House only because of a quirky rule that automatically passes debt limit legislation - without an up-or-down vote - when Congress ratifies its annual budget blueprint.

The debt limit problem comes as Congress is wrapping up its annual appropriations bills, including a $1.1 trillion omnibus measure pending in the Senate. A vote to cut off a GOP filibuster of that measure was scheduled for this past weekend.

As with raising the federal debt limit, the omnibus appropriations bill is opposed by most republicans.

The omnibus bill is in addition to an infusion of cash to domestic agencies in Q1 economic stimulus bill and a $410 billion measure back in March that also conferred budget increases well above inflation.

Candidate Obama decried the reckless spending of his predecessor, and promised a new era of fiscal responsibility, President Obama now finds himself partnered with a democrat controlled Congress on the biggest spending spree in American history. Just as with most of Candidate Obama’s criticisms, President Obama has found it much harder to quarterback from the Oval Office than from the campaign trail.

-- Killswitch Politick

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