Donkeys Continue to Hemorrhage Dollars ...

WASHINGTON (Dow Jones)--Democrats in the U.S. House Of Representatives intend to seek an increase in the nation's debt limit of $1.8 trillion to $1.9 trillion to ensure the federal government's borrowing needs are met through 2010, the House Majority Leader said Friday.

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The current debt ceiling stands at $12.1 trillion and, according to Treasury estimates, is expected to be reached soon. The federal budget deficit in fiscal 2009 was $1.4 trillion and, through the first two months of this year, is on course to be even higher.
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According to figure made public by Majority Leader Steny Hoyer (D., Md.) Friday, the move would hike the government's ability to borrow to $13.9 trillion to $14 trillion.
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That figure is higher than an estimate earlier in the week by Senate Budget Committee Chairman Kent Conrad (D., N.D.). He said lawmakers would have to add "north of $1.5 trillion" to provide the administration with sufficient breathing room through next year.
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It is widely seen that the debt ceiling increase will be added to legislation setting forth the Pentagon's budget in fiscal 2010, which began on Oct. 1.
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At a press conference Friday, Hoyer said that House lawmakers would attach a measure requiring all new mandatory spending to be offset by tax cuts or new revenue raised elsewhere in the federal budget to the defense spending bill.
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"It is not an acceptable alternative for the U.S. to not pay its bills," he said.
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The so-called "pay-as-you-go," or PAYGO, rules were in place in the 1990s when the federal government was running a healthy budget surplus and House Democratic lawmakers are eager to reinstate them.
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The House approved stand-alone legislation enacting PAYGO rules earlier this year, but the Senate hasn't taken the measure yet. Senate lawmakers like Conrad favor PAYGO but object to a move by the House to exempt four large big-ticket spending items from the new austerity measure.
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House lawmakers hope the Senate will find it difficult to strip out the PAYGO rules from the must-pass defense spending bill. The defense bill is proving to be an all-purpose vehicle, with lawmakers expected to add other unfinished pieces of business to it that they either must or want to complete before the end of the year.
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This list includes a probable extension of federal jobless benefits, and a continuation of a program of federal subsidies for people who have lost their health care as a result of losing their jobs.
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Hoyer said that both extensions would be for six months, meaning that people who exhaust their benefits before June 30, 2010, would be eligible for more generous federal assistance.
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-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
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(END) Dow Jones Newswires
December 11, 2009 11:47 ET (16:47 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 11 47 AM EST 12-11-09
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