By Lori Montgomery
Washington Post Staff Writer
Friday, January 29, 2010; A03
The Senate agreed Thursday to raise the legal limit on government borrowing to $14.3 trillion, a historic high that would permit the Treasury Department to cover the nation's bills through early next year.
The vote fell along party lines, with all 60 Democrats supporting and 39 Republicans opposing a plan to increase the cap by a record $1.9 trillion. The 40th Republican, Sen. Mike Enzi of Wyoming, said his no vote was accidentally unrecorded. If lawmakers had approved a smaller increase, Democrats would have had to revisit the deeply unpopular topic of the soaring national debt before facing voters in November.
Even as they extended Treasury's authority to borrow, Democrats moved to rein in large budget deficits that are projected to drive the debt to dangerous levels by the end of this decade. As part of the debt limit bill, the Senate voted again along party lines to revive pay-as-you-go budget rules that bar lawmakers from increasing future deficits through tax cuts or new entitlement spending. The House is expected to take up the legislation next week.
A similar rule helped the nation balance its budget in the 1990s, but the new version would carve out $1.6 trillion in exceptions so Democrats could extend tax cuts for the middle class and avert a scheduled pay cut for doctors who treat Medicare patients without finding ways to offset those costs.
With public concern rising over a budget mess deepened by last year's recession, President Obama has also proposed a three-year freeze on non-security discretionary spending, a move that would generate modest savings but send a powerful political signal. And Obama has pledged to create a bipartisan commission to come up with a more far-reaching deficit-reduction plan.
On Thursday, the White House delivered written assurances to a group of conservative Senate Democrats that the commission's recommendations would get an up-or-down vote in Congress by the end of this year. Without those assurances, more than a dozen Democrats had threatened to vote against raising the debt cap by such a substantial sum.
The budget commission is likely to form the centerpiece of Obama's deficit-reduction efforts this year. Under an agreement with congressional leaders, the panel would have 18 members -- six Democratic lawmakers, six Republican lawmakers and six presidential appointees -- and could issue recommendations only if 14 of them agree.
The panel would act shortly after the November election. Under a deal brokered by Vice President Biden and ratified by House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.), its recommendations would be taken up immediately in the Senate. If approved, the House would take up the bill. If Congress approved it, it would go to Obama for his signature.
The success of the commission could be undercut by Republicans, who so far have shown little interest in participating in an effort that they say would permit Democrats to demonstrate action on the deficit without actually doing anything about it.
Some key Republicans have signaled their unwillingness to serve, including Sen. John McCain (R-Ariz.), who voted against a statutory commission on Tuesday. McCain said Republicans would be willing to cut spending, but do not want to serve on a Democrat-dominated panel likely to recommend raising taxes.
"If it's a vehicle that's headed over a cliff, then we don't want on it," McCain said.