Thursday, January 28, 2010

Senate Passes $1.9 Trillion Debt Limit Increase

Strictly party-line vote successful because the new Massachusetts Senator Scott Brown hasn't been seated yet.

Senate Lifts Federal Debt Ceiling By $1.9 Trillion (1/28/2010 Fox News)

"The Democratic-controlled Senate has muscled through a plan to allow the government to go a whopping $1.9 trillion deeper in debt.

"The party-line 60-40 vote was successful only because Republican Sen.-elect Scott Brown has yet to be seated. Sixty votes were required to approve the increase. The measure would lift the debt ceiling to $14.3 trillion. That's about $45,000 for every American.

"Democrats had to scramble to approve the plan, which means they won't have to vote on another increase until after the midterm elections this fall. To win the votes of moderate Democrats, President Obama promised to appoint a special task force to come up with a plan to reduce the deficit. The House must still vote on the measure before it's sent to Obama for his signature."

Now the debt limit will be $14 trillion, up 15% from $12.104 trillion current limit. However, as I wrote in my December 10, 2009 post, this $1.9 trillion could be gone faster than the Congressional Democrats are hoping. There are a few large spending bills that are yet to actually be spent:

  • $636.4 billion Pentagon appropriations bill
  • $446.8 billion year-end package covering more than a dozen Cabinet departments and agencies and representing a healthy 9 percent to 10 percent increase over current spending for the same accounts
  • bulk of $787 billion stimulus bill from February 2009 (as of 1/15/2010, less than 25% of the amount is paid out, mostly as tax benefits and entitlements - see
If we assume much of the stimulus money is to be paid out this year, say 50% to be conservative, that's about $400 billion. Between these three spendings, nearly $1.5 trillion will be gone.


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