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U.S. House passes debt ceiling increase on to the White House

February 4, 2010

Turns out not a single Republican voted in either the House or the Senate to raise the federal debt ceiling  by $1.9 trillion to $14.3 trillion. 

The Treasury Department said Congress needed to act by the end of the month or risk putting America’s ability to borrow in jeopardy.  President Obama is expected to sign the bill.

The House voted Thursday 217-212 to increase the debt ceiling and followed it up by passing a bill that requires Congress to offset any spending increases or tax cuts with budget cuts or tax increases.  The so-called pay/go, or “pay as you go” rules were approved 60-39 last week  in the Senate.

Republicans have opposed pay/go because they believe it leads to tax increases.   Democrats credit pay/go rules back in the 1990’s for creating the only period of federal budget surpluses in recent history.   Congress Daily reported:

During debate on pay/go, House Majority Leader Hoyer said the need to increase the debt limit was regrettable, but he argued that most of the deficit was the result of policies put in place when Republicans controlled Congress and the White House.

“We however, we believe America got into this mess, this Congress can begin getting America out of it,” Hoyer said. “That is why Congress must pass one of the most proven deficit-cutting tools we know: statutory pay/go.”

Hoyer said that statutory pay/go played a major role in producing budget surpluses in the 1990s, and should not have been allowed by Republicans to lapse in 2002.

Republicans contend Democrats want to get serious about spending only after going on a spending spree. They also charge that pay/go does nothing to rein in spending because Democrats are quick to waive it.

“What pay/go does is it lock in deficits at current levels and it doesn’t address the spending crisis,” said House Budget ranking member Paul Ryan, adding that pay/go “is rife with loopholes.”

Four policy items are exempted from pay/go including a two-year exemption for reducing the estate tax. 

The vote paves the way for Senate and House action on the estate tax which expired at the start of the year.  Without any action this year, the estate would come back next year with a $1 million exemption and 55 percent tax rate. 

Farm Bureau supports the highest possible exemption adjusted for inflation and a 35 percent tax rate.

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