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Democrats sound alarm on increasing federal debt ceiling
This is an archived article that was published on sltrib.com in 2004, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

WASHINGTON - Heading into a final weekend vote on unfinished agency spending bills, Congress has spent most of its lame-duck session this week debating whether record deficits and national debt really matter.

If the tone is any indication, the partisan differences that marked the 107th session now wrapping up will carry into the new Congress that begins in January.

Just before a Thursday midnight deadline, the House gave final approval for Uncle Sam to borrow more money as the nation's $7.4 trillion debt limit was maxed out.

Second District Rep. Jim Matheson, D-Utah, was the only member of the state's congressional delegation to vote against raising the authorized national borrowing ceiling by $800 billion to a new credit line of about $8.2 trillion. He said he opposed the hike because Congress failed to adopt pay-as-you-go spending provisions.

"This is a moral issue," Matheson said. "We are burdening generations yet born with what we are doing today."

Utah Republican Sens. Bob Bennett and Orrin Hatch voted in favor of the bill Wednesday when it passed the Senate 52-44, while 1st District Rep. Rob Bishop, R-Utah, was part of the 208-204 House majority that supported it. Third District Rep. Chris Cannon, R-Utah, whose daughter is battling cancer, was not present.

If the bill hadn't passed, it would have meant the first default of the government in history.

Democrats rattled the rafters in both chambers decrying the fiscal irresponsibility of a GOP-led Congress and White House that have ballooned the federal deficit and forced three such hikes in the nation's statutory debt limit the past three years.

"Including this year's increase, Republicans will have raised the debt limit by more than $2 trillion since President Bush took office," said House Minority Leader Nancy Pelosi, D-Calif. "The truth is there really is no limit to the amount of debt Republicans are willing to run up."

Although few took the floor in either chamber to counter Democratic attacks, Republicans pointed out that the debt ceiling has been extended nearly 80 times since 1964 and even needed to be bumped up during the fat fiscal years of the Clinton administration.

"Even when we were running a surplus on a cash basis, the federal debt kept going up," said Bennett, who as chairman of the Joint Economic Committee is one of the Senate majority's leading voices on fiscal policy.

Bennett, whose personal wealth has declined by at least 75 percent in the last decade partly because of money-losing investments, maintains the federal debt limit is not a valid measurement of fiscal health. He said expressing the national debt in simple dollar values fails to take into account the government's actual debt burden relative to inflation or in relation to gross domestic product, the value of all goods and services produced in the U.S.

Because federal law requires any surplus in the Social Security and Medicare trust funds be invested only in government bonds, excess cash in those funds also is driving up the national debt simply due to accounting rules, Bennett said.

"Even if there were no debt held by the public, the government has to sell bonds to the Social Security trust fund, thus issuing new debt," he said.

While Bennett discounts the significance of the debt burden in relation to the long-term viability of the economy, Matheson believes the average citizen feels the impact of the spending today.

"At one treasury bond auction, all the foreign investors didn't show up and didn't buy our debt," said Matheson, a member of the House Financial Services Committee. "That is going to drive up interest rates."

Bennett counters that the low yield of government bonds is more likely to blame for softening demand by foreign investors, since U.S. securities remain the least-risky investment.

But U.S. Comptroller General David Walker, who heads the Government Accountability Office, the investigative arm of Congress, also is alarmed by the prospect that foreign nations may decide not to finance America's national debt as the $400 billion federal deficit continues to reach new heights.

"Either we come up with the money on our own or we raise interest rates to the point where people want to buy it," Walker said.

"Anybody who says you can grow your way out of this problem would not pass math," he said.

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