February 2010

Addressing the fiscal crisis | Capitol Hill

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Addressing the fiscal crisis

Congress is set to revisit the short-term extension on the U.S.' national debt

by Duane L. Musser
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Shortly before adjourning at the end of 2009, Congress passed legislation providing a $290 billion increase to the $12.1 trillion limit on the national debt. The measure is expected to last only two months before the limit must be raised again to avoid a default on the government's obligations, forcing Congress to revisit the issue this month. How Congress handles the matter may be the first real step toward addressing the long-term fiscal crisis facing the U.S.

The short-term extension

The short-term debt limit extension became necessary when congressional leaders could not garner enough votes to pass their original proposal—a $1.8 trillion increase designed to last through this year. In mid-December 2009, a group of moderate Democratic senators sent Senate Majority Leader Harry Reid (D-Nev.) a letter indicating they would not vote for the year-long debt limit increase unless the Senate also voted to create a special commission to address the U.S.' long-term fiscal problems. In the face of this opposition, Democratic leaders were forced to scrap their original proposal in favor of the short-term fix.

The revolt against a long-term debt limit extension demonstrates that some lawmakers are reacting to mounting public concern regarding the debt being incurred by the federal government. A recent editorial in The Washington Post noted that during 2009, the U.S.' long-term debt "soared from 41 percent of the gross domestic product to 53 percent" compared with an average of 37 percent during the past 50 years. The editorial also noted the national debt is "on track to rise to a crushing 85 percent of...

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History of U.S. debt

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