(CNNMoney.com) – The Senate on Thursday raised the cap on how much the government can borrow to a record level.
Getting just enough votes to pass, the Senate voted 60-39 to increase the debt limit to $1.9 trillion. That would push the ceiling to $14.294 trillion from the current $12.394 trillion. Sixty votes were required for passage.
But it's not a done deal. The bill now needs to be sent back to the House for a vote, where passage is still in question, according to Congressional Quarterly.
A $1.9 trillion increase is expected to cover the Treasury's projected borrowing needs through at least early 2011, and in any case well past the November mid-term elections. Debt limit votes are always politically difficult and not ones lawmakers seeking re-election like to take.
The ceiling reflects the level up to which the Treasury Department is allowed to borrow. If the ceiling is ever breached, the country would effectively be in default. That can hurt bonds, the dollar and creditors' portfolios.
The Senate legislation also included an amendment that seeks to rein in the growth rate in U.S. debt by putting in place statutory pay-go rules.
A pay-go law would require lawmakers to find ways to pay for proposed tax cuts or spending increases by raising taxes or reducing spending elsewhere in the budget.
Pay-go rules don't actually reduce the debt load already accrued, but they put the brake on future increases - a helpful first step, budget experts say.
The effectiveness of pay-go rules, however, depends on their parameters. The strongest form would not allow any policy to be exempt.
The amendment passed by the Senate, however, exempts some expensive measures, such as the cost of a permanent extension of middle class tax cuts.
It would also exempt the Medicare "doctor fix" for 5 years and the extensions of relief from the Alternative Minimum Tax and the estate tax for two years.
The passage of the debt limit increase had been called into question for weeks as a group of a dozen-plus moderate Democrats, including Senate Budget Chairman Kent Conrad, D-N.D., threatened to vote against any large increase until a credible process to address future deficits was put in place.
A proposal cosponsored by Conrad and Sen. Judd Gregg, R-N.H., the budget committee's top-ranking Republican would have created a statutory bipartisan fiscal commission to come up with recommendations for tax increases and spending cuts
Had it passed, Congress would have been required to vote on the commission's recommendations by the end of this year.
President Obama during his State of the Union address on Wednesday said he would create a bipartisan fiscal commission by executive order.
Obama's panel is a weaker version of a commission because Congress won't be required by law to consider the presidential commission's recommendations or to vote on them.
Conrad and several of the moderate Democrats who had been resisting the increase earlier ended up voting for it on Thursday.
Conrad said he got written assurances that Reid and House Speaker Nancy Pelosi, D-Calif., would bring the presidential commission's recommendations to a vote before the end of the year.
Hey – they had to – otherwise they might not get another raise next year. Or, heaven forbid, THEIR healthcare and other benefits might be cut.
Yea!! More borrowing and spending.
When things get better/have gotten better in the past, have they/do they ever LOWER the Debt Ceiling? ANYONE – Republican/Democrat?
Absolute insanity. Any elected official that supports this measure needs to be voted out of office.
This is great....
Now Barack can spend us farther into debt...
It wasnt enough that he added 3 X the amount of deficit to the national debt then ANY other presiden...
1.45 Trillion added to the national debt in 2009..
1.35 Trillion ESTIMATE – Low Estimate – added in 2010.
1.35 Trillion ESTIMATE – Low Again – added in 2011....
What a joke..Barack is a spending fool. You are burying us in debt.
So let me see if i understand this, the American public is tired of the governments out of control spending from the Bush Admisnistration and now the Obama Administration and you raise how much can be borrowed for more out of control spending????? Like I stated in a political ticker entry last week, we need to get rid of every single Republican and Democrat in WAshington and start all over. Idiots
Enough already, they have spent us into Oblivion with nothing to show for it. Is this the change everyone voted for?
Snuck that one in pretty quick, didn't they? Is it November yet?
They could have cut $1.9 trillion out of budget. We have to get past thinking everything in the budget is critical. Everything and everyone is expendable. No more deficit spending for any reason. We need retirement/heathcare programs for this century not something from the 1930's. The program's and ideas of the 30's and 60's are broken and unsustainable. We need new ideas involving less government involvement.
More spending......the only thing that is going to stop it, is having the US cut off, from any more credit.
Can someone send the Gooberment a dictionary, so they can look up the Fiscal Resposibility?
Thanks a lot senate! Give us a few more shovels so we can dig this hole even deeper!
typical dems, tax and spend!
Does anyone else here think that it is ironic that the democratic controlled senate(at least untill tomorrow) can pass, in the same day, a deficet hike and a spending freeze?
OK, how did they get 60 votes? Is Kirk still voting as a Senator from Massachusetts?????? I thought his term was OVER the minute Martha Coakley conceded. Is there no conscience left among the democrats?
They are borrowing my childrens future. Stop the insanity, please.
WOW, less than 24 hours after Odumbo said spending freeze and look what the Dems are already doing. Spending again.
You cant beleive any of them folks. Dems just lie and do what they want while Odumbo is in office.
2010/2012 REAL Change is coming
This is the wrong move. VOTE EVERYONE OF THESE IDIOTS OUT!
This is without a doubt one of the biggest injustices ever dicatated to the American peopleby the Supreme court. They have given
total control to big business, even foreigh corporations, on our elections.
They have made us insignificant in one the biggest freedoms we have.
Our government has to find a way to overturn this irresponsible,
unconstitutional, raping of the people action that was taken by people we are supposed to honor and trust.
Oh Yeah.....but we need to fund a rail from Tampa to Orlando :0. Biden=Amtrack. I wonder how much money Disney and the entertainment industry put in for Obama....oh yeah, ABC owns Disney...hmmmm. I am sure unemployment is really low there too, with all of the amusement parks. With what they charge I am sure they are struggling! I am struggling just to send my child there on a school band trip. What a TRAIN wreck!
SPEND SPEND SPEND!!!! Can somebody give me some money? I'd like to buy a new car.
The democrats didn't learn anything from the vote in Massachusetts. We want:
1) LESS GOVERNMENT SPENDING
2) Intelligent policies (less is better)
3) We want both parties to work together
It's Bush's vault, it's Bush's fault!!!
Need I say more...
Trimming pork is soooo unfashionable.