US Congress raises national debt limit

The US House of Representatives has voted to raise the national debt ceiling by $800 billion to nearly $8.2 trillion.

    Each US citizen has a $25,000 share of the national debt

    By a party-line vote of 208 to 204, lawmakers agreed to the increase late on Thursday, following Senate approval on Wednesday,

    also on a party-line vote of 

    52 to 44.

    The move allowed the US government to avoid the unwelcome prospect of running short of operating funds.

    The increase is the third in as many years.

    The US Treasury Department told lawmakers it needed a vote on the measure by Thursday to avoid a government default.

    Democrats in Congress have decried the ballooning US debt, which they warn could reach $14.5 trillion in 10 years unless drastic action is taken.

    Anger

    "I think there must be some spiritual immorality for children
    who are yet unborn to come into this world with a debt on their shoulders that their parents have no idea as to how it was accumulated," Charles Rangel, top Democrat on the House Ways and Means Committee, said this week on the eve of the vote. 

    "What would surprise many ... is that we largely borrow this money from foreign countries, like China, Japan and South Korea"


    Senator Dianne Feinstein

    "I think it's wrong for ... to have foreigners purchase our debt
    and then at the same time we're going to tell them what their
    responsibilities would be as related to enforcing international law," he said.

    "It is an economic nightmare as to what would happen if all of
    the people who purchase all of our bonds ever got together on anything and decided the investment just wasn't worth it."

    California Senator Dianne Feinstein told the Senate that "we should be taking concrete steps to lower our budget deficit and reduce our national debt" and poured scorn on US President George Bush's fiscal policies.

    "At the same time he is raising the debt limit, President Bush is promising to cut the deficit in half over the next five years. But his numbers do not add up and he has provided no clear path to achieve this goal," Feinstein said.

    She too noted that the rapidly spiralling US debt increasingly has come courtesy of foreign creditors. "What would surprise many ... is that we largely borrow this money from foreign countries, like China, Japan and South Korea," Feinstein said.

    "Over the past four years, the US has increased its borrowing from Japan by $700 billion, by $167 billion from China, $130 billion from Great Britain, and $60 billion from South Korea," she said. 

    The $800 billion debt level increase is expected to cover federal spending for one year.

    SOURCE: AFP


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