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Congress raises debt limit, OKs new spending

Congress pushed the ceiling on the national debt to nearly $9 trillion Thursday, and the House and Senate promptly voted for major spending initiatives for the war in Iraq, hurricane relief and education.
/ Source: The Associated Press

Congress pushed the ceiling on the national debt to nearly $9 trillion Thursday, and the House and Senate promptly voted for major spending initiatives for the war in Iraq, hurricane relief and education.

The Senate, on a 52-48 vote, sent President Bush a measure allowing the government to borrow an additional $781 billion and preventing a first-ever default on Treasury notes. The move allows lawmakers and the president to pay for the war in Iraq without raising taxes or cutting popular domestic programs.

Hours later, the House approved by a 348-71 vote $92 billion in new money for the wars in Iraq and Afghanistan and for relief along the hurricane-ravaged Gulf Coast.

In the Senate, a late-night vote loomed on a $2.8 trillion budget blueprint for the upcoming year, but only after approving amendments breaking Bush’s $873 billion cap on appropriated spending by more than $12 billion.

Vice President Dick Cheney was expected to be on hand for a possible tie-breaking vote. Sen. Mary Landrieu, D-La., could prove a crucial vote. She negotiated with GOP leaders to use potential oil lease revenues from exploration in an Alaskan wildlife refuge and in coastal waters to pay for projects to preserve the Louisiana coast.

Senators voted 51-49 to add $3 billion to the budget for heating subsidies for the poor. By a 73-27 vote, they added $7 billion for education, health and worker safety accounts. An amendment to add $1.2 billion for aviation security and block Bush’s proposed increase in airline ticket taxes advanced by voice vote, while another amendment added $1 billion for military survivors benefits.

The blueprint for the budget year that begins Oct. 1 bears little resemblance to one from Bush last month. The votes Thursday set up a confrontation with the House, which is certain to oppose the additional spending.

In fact, the Senate’s moves on the budget appear to make it far less likely that Congress will settle on a final budget plan this spring. House Republicans will not release their budget until after next week’s congressional recess.

The votes dismayed deficit hawks such as Senate Budget Committee Chairman Judd Gregg, R-N.H. He already had decided to drop Bush’s proposals to cut the growth of Medicare, strengthen tax-free health savings accounts and advance legislation to make permanent his 2001 tax cuts.

Republicans are eager to show their conservative supporters that they are getting serious about cracking down on spending. Last weekend, GOP presidential aspirants at the Southern Republican Leadership Conference in Memphis, Tenn., promised to be more thrifty with the people’s money.

But GOP moderates such as Sen. Arlen Specter of Pennsylvania apparently did not get the message. His amendment to add $7 billion for education, health and labor programs won support from most Republicans, including Majority Leader Bill Frist of Tennessee, who has criticized Congress for embarking “down a wayward path of wasteful Washington spending.”

“All the talk in Memphis just doesn’t comport with the realities of these important items” such as education and health research, Specter said.

The debt limit increase was the fourth of Bush’s presidency, totaling $3 trillion. With the budget deficit expected to approach $400 billion for both this year and next, an additional increase in the debt limit almost certainly will be required next year.

Treasury Secretary John Snow applauded Congress for “protecting the full faith and credit of the United States.” He said it ensures that the government “can deliver on promises already made, such as Social Security and Medicare payments and aid for the victims of the 2005 hurricanes.”

The present limit on the debt is $8.2 trillion.

The 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 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 Senate Minority Leader Harry Reid, D-Nev. “The three largest deficits in our nation’s history have all occurred under this administration’s watch.”

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 cut mandatory programs.