Senate Backs Raising Federal Debt Limit to $9 Trillion

Gross federal debt i i

Federal debt has risen from $542 billion to more than $8 trillion since 1975. Debt as a percentage of Gross Domestic Product, once at 34.7%, is now above 60%. NPR/NPR hide caption

itoggle caption NPR/NPR
Gross federal debt

Federal debt has risen from $542 billion to more than $8 trillion since 1975. Debt as a percentage of Gross Domestic Product, once at 34.7%, is now above 60%.

NPR/NPR

The Senate votes in favor of raising the national-debt ceiling to nearly $9 trillion. The bill now goes to the president. Without such a move, the U.S. government would have to shut down because it has nearly reached its credit limit and would not be able to borrow any more money.

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MICHELE NORRIS, host:

From NPR News, it's ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel. With about as much enthusiasm as someone going in for a root canal, Senate Republicans have voted to raise the government's limit for how much it can borrow. They raised the debt ceiling by nearly $800 billion, allowing the national debt to swell to $9 trillion. Democrats voted against the measure, Senators voted for it so they felt they had no choice. Failure to do it might have brought on a potentially disastrous debt default and government shut-down sometime next week.

Here's NPR's David Welna.

DAVID WELNA reporting:

As chairman of the Senate Banking Committee, Alabama Republican Richard Shelby oversees a lot of money lending and Shelby did not relish one bit the vote he cast today raising the debt ceiling.

Senator RICHARD SHELBY (Republican, Alabama): I wish we didn't have to deal with the debt limit. I wish we were running a big surplus instead of creating a deficit and borrowing money.

WELNA: There actually were budget surpluses five years ago and talk of paying down the national debt, but those surpluses have since become big deficits and Congress has had to raise the government's borrowing authority by $3 trillion. It's done this at the same time its approved tax cuts costing the U.S. Treasury hundreds of billions of dollars in foregone revenues. Before today's vote, Iowa Republican Charles Grassley, who chairs the Finance Committee, defended those cuts.

Senator CHARLES GRASSLEY (Republican, Iowa): We will hear a lot of criticism that President Bush's tax cuts are responsible for our rising public debt, but the facts show otherwise.

WELNA: Grassley argued the tax cuts have cost about 900 billion dollars while the debt's risen nearly three times that much.

Senator GRASSLEY: Thus the President's tax cuts account for about 30 percent of the increase in the Federal debt.

WELNA: And Minnesota Republican Norm Coleman maintained the tax cuts have actually been good for the economy.

Senator NORM COLEMAN (Republican, Minnesota): We've got five million new jobs since the tax cuts of 2003 and I would think even the worst critics would tell you the reason we had 240,000 new jobs last month and 30 months of consecutive job growth is because of the tax cuts.

WELNA: But New Jersey Democrat Frank Lautenberg said the tax cuts Republicans defend are forcing the government to borrow more and more.

Senator FRANK LAUTENBERG (Democrat, New Jersey): They've got to make a decision as to whether or not they're going to stick to their commitment to give the wealthiest among us more tax breaks or continue the tax breaks or whether or not they're going to face up to the reality and say we just can't continue to build debt and we're going to hold their feet to the fire until they make a decision.

WELNA: But rather than demanding a repeal of the tax cuts, Senate Democrats simply refused to go along with raising the debt ceiling. Here's their leader Harry Reid as the Senate was about to vote.

Senator HARRY REID (Democrat, Nevada): We're being asked to do what shouldn't be asked of us, to increase the debt to almost nine trillion dollars. I hope everyone walking down to these desks today will understand what they're doing, what they're doing to our country. On this side of the aisle, we know.

WELNA: And on that Democratic side of the aisle, no one voted for the bigger debt limit. Neither did three Republicans, but 52 Republicans did, including Norm Coleman, who shrugged when asked when the debt limit will have to be raised again.

Senator COLEMAN: I don't know. I hope we continue to grow this economy and I hope that we're successful in putting some lids on spending that we might not find ourselves in that position again.

WELNA: But just a couple of hours later, Coleman was back on the Senate floor voting to add seven billion dollars in spending to next year's budget.

David Welna, NPR News, the Capitol.

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