Obama Asks Senate To Increase Debt Ceiling...

http://thehill.com/homenews/senate/57493-senate-must-raise-debt-ceiling-above-12t

Senate must raise debt ceiling above $12T
By Walter Alarkon - 09/07/09 12:11 PM ET

The Senate must move legislation to raise the federal debt limit
beyond $12.1 trillion by mid-October, a move viewed as necessary
despite protests about the record levels of red ink.

The move will highlight the nation's record debt, which has been
central to Republican attacks against Democratic congressional leaders
and President Barack Obama. The year's deficit is expected to hit a
record $1.6 trillion.

Democrats in control of Congress, including then-Sen. Obama (Ill.),
blasted President George W. Bush for failing to contain spending when
he oversaw increased deficits and raised the debt ceiling.

"Washington is shifting the burden of bad choices today onto the backs
of our children and grandchildren," Obama said in a 2006 floor speech
that preceded a Senate vote to extend the debt limit. "America has a
debt problem and a failure of leadership."

Obama later joined his Democratic colleagues in voting en bloc against
raising the debt increase.

Now Obama is asking Congress to raise the debt ceiling, something
lawmakers are almost certain to do despite misgivings about the
federal debt. The ceiling already has been hiked three times in the
past two years, and the House took action earlier this year to raise
the ceiling to $13 trillion.

Congress has little choice. Failing to raise the cap could lead the
nation to default in mid-October, when the debt is expected to exceed
its limit, Treasury Secretary Timothy Geithner has said. In August,
Geithner asked Senate Majority Leader Harry Reid (D-Nev.) to increase
the debt limit as soon as possible.

Changing the debt cap "does provide an opportunity to look at fiscal
policy and what its failings are, and ideally it could give both sides
an opportunity to think about what we need to do so we don't keep
raising the debt limit," said Robert Bixby, the executive director of
the Concord Coalition, a fiscal watchdog group.

"But probably as a practical matter, it will get more attention as a
partisan back-and-forth," Bixby said.

When the House raised the debt limit to $13 trillion as part of a
budget resolution approved in April, Democratic leaders used a
maneuver known as the "Gephardt rule," named after former House
Democratic Leader Dick Gephardt (Mo.), to avoid taking a roll call
vote on the debt limit increase.

The Senate isn't so lucky. It lacks a similar mechanism, meaning each
senator must cast a politically perilous vote on raising the debt
ceiling.

The Senate Finance Committee will "carefully review Treasury's request
on behalf of the American taxpayers," according to an aide to the
committee's chairman, Sen. Max Baucus (D-Mont.).

"Sen. Baucus understands the critical importance of signaling to the
world that the U.S. maintains the confidence and security to continue
to lead the global economy out of recession," the Baucus aide said.
"The request to raise the debt limit is serious and must be addressed
thoroughly and in a nonpartisan manner."

The aide noted that Baucus is pressing the Treasury Department to be
more transparent about its efforts to pull the economy out of
recession.

"He will continue to demand the necessary communication and
cooperation going forward," the aide said.

Both the White House and the independent Congressional Budget Office
last month said that they expect the debt to increase by another $9
trillion over the next decade. Should the Senate follow the House's
lead and set the new debt limit at $13 trillion, lawmakers would
probably have to raise the limit again next year, when the Obama
administration expects to run a $1.5 trillion deficit.

The business community has supported Geithner's push for a higher debt
ceiling. Bruce Josten, the top lobbyist for the U.S. Chamber of
Commerce, said it's essential to the U.S. economy.

"If we fail to address this in a timely fashion, then you run the risk
of having to curtail government operations," Josten said. "The last
thing our economy and the world economy needs is greater uncertainty
throughout global credit markets."

Josten said that the high level of debt is a reality during the
recession, but it's unsustainable and needs to be reduced by reforming
Medicare and Social Security.

"While we can freely and openly acknowledge completely and lobby to
raise the debt ceiling and incur some more debt, the longer trends
ultimately need to be reversed," he said.

Congress raised the debt limit just a few months ago when it passed
the $787 billion stimulus package.