A $290 billion increase in the federal debt ceiling narrowly cleared Congress Thursday, giving Treasury just enough leeway to pay the government’s bills into February and setting the stage for a showdown over fiscal policy early next year.
Senate Republicans insisted that 60 votes be required for passage and then held back their own members in order to force as many Democrats as possible to walk the plank on what has never been a popular or easily-explained decision back home.
The same issue returns with a vengeance Jan. 20th when senators will be asked to vote on a still larger, long term debt increase within days of President Barack Obama’s new budget and State of the Union address.
Treasury’s daily statements this week indicate it is still about $65 billion under its current $12.1 trillion ceiling and conservatives argued that special measures could be invoked still to avert default over New Year’s. But with Congress leaving for the holidays, Senate Banking Committee Chairman Christopher Dodd (D—Conn.) said that failure to act would have been “catastrophic” for the U.S. internationally. And Senate Finance Committee Chairman Max Baucus (D—Mont.) said that payments to Social Security recipients were also at risk.
“The bottom line is we have no choice,” Baucus told his colleagues. “We have to approve it.” - Politico Story
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