On Thursday, the Senate passed a bill to increase the debt limit. Senate Majority Leader Harry Reid’s (D-NV) amended version of the bill passed by the House will raise the ceiling on the federal debt by $1.9 trillion. This is a huge increase from the House version, which allowed an increase of only $925 billion.
Raising the debt ceiling by such a staggering amount is convenient for Congressional Leadership because they will not have to vote on another unpopular debt limit increase until after the 2010 elections. This strategy may allow lawmakers fearful of losing their seats to escape harsh criticism in an election year, but it will not address the dire situation of the federal government’s finances.
The Congress must raise the debt limit in order to avoid defaulting on their financial obligations, which would have far-reaching negative effects on the economy. But lawmakers lost an opportunity to prove that they had gotten the message inherent in raising the debt limit: out-of-control spending must be addressed. Instead, Congress has elected to simply kick the can down the road to future legislators. In the end, this will only exacerbate the problem.
During the State of the Union Address, President Obama addressed the need for fiscal responsibility. He outlined his plan to create an executive commission to explore ways to tighten in the belt on federal spending, and proposed a freeze on discretionary spending in the budget. The sentiment is noted, but these suggestions are not enough to have any kind of real effect on spending. So the question remains whether the President is serious about exploring fiscal reform, or whether Wednesday night’s rhetoric was simply a way to get out of hot water with angry Americans genuinely concerned with the financial state of the union.
Either way, the Senate does not seem interested in engaging in the President’s presumed initiative to rein in spending. Earlier in the week, an amendment passed which will prohibit any commission formed to address spending from touching Social Security. This, despite the fact that the big three entitlement programs, which include Medicare, Medicaid, and Social Security, are the main culprits behind the looming deficit explosion. Throughout the amendment process, Democrats have consistently voted against proposals which would require the government to rein in wasteful and unnecessary spending. And then, to emphasize their unwillingness to tackle the problem, the Senate voted 60-39 to increase the debt limit by a whopping $1.9 trillion. Will the House follow suit?