National Debt Cap Will Need to Rise, Treasury Predicts
By Lori Montgomery
Congress will be forced to raise the legal limit on the nation's credit card sometime later this year, Treasury officials reported Wednesday, focusing additional attention on the expanding national debt just as lawmakers expect to be putting the finishing touches on President Obama's trillion-dollar overhaul of the nation's health care system.
The amount the government may borrow from the public, including foreign creditors, is limited by law to $12.1 trillion, a cap that has been raised several times since the nation slipped into recession in December 2007. Treasury officials predicted this week that they expect to borrow an additional $892 billion through the end of the year, driving the overall debt past the cap sometime in the fourth quarter.
"Given the uncertainty surrounding potential borrowing needs, Treasury will continue to keep Congress and financial market participants apprised of developments as the debt outstanding approaches the statutory limit," Treasury officials said in a written statement.
The debt is the accumulated borrowing necessary to finance years of annual budget deficits. This year, the deficit is on track to exceed $1.8 trillion, a postwar record compared with the size of the overall economy. Polls show concern is growing over the nation's spending habits, and that concern is already influencing the health care debate on Capitol Hill, where Republicans -- and some Democrats -- are questioning whether a nation so deeply in debt can afford an expensive new program to expand health care to the uninsured.
The need to raise the debt limit could also put additional pressure on 0bama to rein in other parts of his agenda: The Congressional Budget Office has projected that the policies laid out in 0bama's first budget would require an additional $9 trillion in borrowing over the next decade.
Web Politics Editor
August 5, 2009; 10:59 AM ET
Categories: Economy Watch
Save & Share: Previous: Today on the Hill
Next: As Sotomayor Debate Begins, Two More Announce Opposition
Posted by: bandcyuk | August 5, 2009 11:39 AM | Report abuse
Posted by: Klimax | August 6, 2009 10:02 AM | Report abuse
Posted by: sm98yth | August 6, 2009 11:31 AM | Report abuse
Posted by: andrew23boyle | August 11, 2009 7:26 AM | Report abuse
The comments to this entry are closed.