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Congress's early task: What to do about national debt ceiling?

A vote to raise the national debt ceiling is always tough, because it casts the majority party as a reckless spender. But Congress must confront the issue, probably Jan. 20, upon lawmakers' return from recess. If the ceiling is not raised, the government will likely run out of funds in February.

By Staff writer / January 19, 2010

The US Capitol Dome is seen on Capitol Hill in Washington January 14. First order of business of the new year is making sure the government can pay its bills.

Larry Downing / Reuters

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Washington

Congress returns to a massive agenda in the new year – healthcare, a job-creation plan, financial regulation, global warming, and probes of the Christmas Day bombing attempt. But its first order of business is making sure the government can pay its bills.

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Unlike state and local governments, Washington can print money. Problem solved? Not likely. Thanks to war-bond legislation in 1917, Congress has to set a statutory limit for the national debt and must vote to raise it before that limit is exceeded.

Since 1917, it’s been one of the toughest votes on Capitol Hill, because it tends to cast the majority party as a reckless spender.

“Debt ceilings have become political footballs and will continue to be in this highly politicized Congress, where making the other side lose is more important than governing,” says Stanley Collender, a longtime congressional budget analyst at Qorvis Communications in Washington.

A steady rise for the debt limit

In 1995, newly empowered House Republicans pushed the Clinton administration to two government shutdowns over a vote to raise the debt limit. The GOP majority backed down in 1996 and voted to raise the federal debt limit to a then-whopping $5.5 trillion.

With Republican support, President Bush raised the debt limit by more than $6.4 trillion in his eight years in office. Since July 2008, Congress has bumped up the limit by more than $2.5 trillion, mainly to fund programs to deal with the financial crisis.

As the national debt closed in on the new $12.104 trillion ceiling, the House last April voted to increase the limit by $925 billion, to $13.029 trillion. But the Senate couldn’t come up with 60 votes to allow that increase. So Congress passed a $290 billion short-term fix to raise the federal debt ceiling to $12.394 trillion. The measure was approved with 218 votes in the House and 60 in the Senate – the barest of minimums required to pass major legislation. Thirty-nine House Republicans and one Democratic senator, Evan Bayh of Indiana, opposed the measure. One Republican senator, George Voinovich of Ohio, broke ranks to vote with Democrats to raise the debt limit. Senator Voinovich, who is retiring from the Senate at the end of the year, met with President Obama in the White House Tuesday to discuss prospects in Congress for a bipartisan commission to help rein in federal deficits.

With the short-term fix, the Treasury Department projects that the government will run out of funds in February. Because neither party wants to repeat a career-busting government shutdown, a longer-term debt increase appears to be only a matter of time.

A vote to watch on Jan. 20

But the debate and vote, expected on Jan. 20, give both sides a chance to test support for plans to lower federal budget deficits. Such plans are likely to factor in the 2010 midterm elections.

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