Congress boosts debt ceiling
By William L. Watts, MarketWatch
Last Update: 11:36 PM ET Sep 27, 2007
WASHINGTON (MarketWatch) -- The federal government's credit card remains intact.
The Senate voted 53-42 on Thursday to raise the federal debt limit by $850 billion, putting the ceiling at $9.815 trillion.
Without an increase, the federal government would eventually be unable to borrow more money or to pay obligations on existing debt. The federal government has never defaulted on a debt payment.
Treasury Secretary Henry Paulson had warned last week that the government would run out of room to maneuver by Oct. 1 unless Congress hiked the limit.
The House approved the debt-limit increase earlier this year when it passed its annual budget resolution.
The move marks the fifth increase in the debt limit since President Bush took office. Measures to raise the limit have often sparked sharp political debate.
Democrats charge that the Bush administration's tax cuts have been skewed toward wealthy Americans while boosting the deficit and running up debt.
The White House and Republican leaders contend that the nine-month 2001 recession and the aftermath of the Sept. 11, 2001, terror attacks played a major role in persistent deficits, and contend that subsequent tax cuts helped minimize economic weakness.
