The Democratic-controlled Senate has muscled through a plan to allow the government to go a whopping $1.9 trillion deeper in debt.
The party-line 60-40 vote was successful only because Republican Sen.-elect Scott Brown has yet to be seated. Sixty votes were required to approve the increase. The measure would lift the debt ceiling to $14.3 trillion. That's about $45,000 for every American.
Democrats had to scramble to approve the plan, which means they won't have to vote on another increase until after the midterm elections this fall. To win the votes of moderate Democrats, President Barack Obama promised to appoint a special task force to come up with a plan to reduce the deficit. The House must still vote on the measure before it's sent to Obama for his signature.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- Senate Democrats are counting on their soon-to-expire 60-vote majority to raise the U.S. debt ceiling by $1.9 trillion so they do not have to take more politically painful votes on government borrowing until after the November elections.
They have no room for error. In the face of monolithic Republican opposition, they will need all 60 votes Thursday to let the government continue borrowing almost 40 percent of what it spends, much of it from China and other Asian nations who buy U.S. securities.
The legislation would put the government on track for a national debt of $14.3 trillion -- equal to about $45,000 for every American -- and provide a vivid reminder of the United States' dire fiscal straits. New estimates released by the Congressional Budget Office on Tuesday show that the U.S. this year could run a deficit matching last year's record $1.4 trillion shortfall.
To make raising the debt ceiling easier for moderates and politically endangered Democrats to swallow amid a populist uprising against government borrowing and spending, President Barack Obama promised in his State of the Union address Wednesday night to appoint a bipartisan task force to come up with a plan for dealing with the spiraling debt.
"I will issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans," he said.
The 60 votes Democrats need from their own caucus include those of incumbents facing difficult re-election battles this year as well as longtime opponents of raising the debt limit, such as Sen. Evan Bayh.
The task was made more difficult last week when Republican Scott Brown won the late Edward M. Kennedy's Senate seat from Massachusetts. On Feb. 11, when Brown plans to take office, the Democrats' majority shrinks to 59 in the 100-member Senate and the Republicans will have a 41-vote ability to block what they do not like in Obama's and Democratic leaders' agendas.
If the $1.9 trillion debt ceiling increase fails, the Senate would immediately vote on a fallback $635 billion increase already approved by the House. But that would require still another vote before the Nov. 2 Election Day to raise the ceiling again.
"It took 200 years to build the federal debt to a total of $1.9 trillion," Sen. Judd Gregg, a Republican, said. "Now the majority wants to increase the current limit ... by $1.9 trillion so that we can finance the government's borrowing binge long enough to get us past the November 2010 elections."
Congress has until mid-February before the current $12.4 trillion debt ceiling is reached, so there would not be an immediate crisis if the measure were to be defeated. But a losing vote -- the tally was scheduled for around noo (1700 GMT), when financial markets are open -- could unnerve the stock market. Lawmakers in both parties have promised they will not permit a market-rattling, first-ever default on U.S. obligations.
Democrats and Republicans alike share responsibility for running up the debt, but it falls upon Democrats to pass the measure since they control the government. It makes no difference that Republicans routinely backed increases in the debt when former President George W. Bush was in office.
Republicans blame recent generous spending bills enacted by the Democratic-controlled Congress for driving up the debt. Those measures, however, are just one relatively small part of the problem. The far bigger element is a sharp drop-off in tax revenues because of the recession and the economy's slow recovery, as well as higher costs, since more people are taking unemployment benefits and food stamps in tough times.
As part of the debt ceiling bill, the Senate will also vote on new budget rules that would make Congress cover any increases in government benefits with either a corresponding tax increase, spending cuts elsewhere or a combination of the two. The same would apply for new tax cuts, such as the tax credit Obama proposed Wednesday night for small businesses that hire more workers. The tax cuts would have to be "paid" for with corresponding spending cuts or increases in other taxes.
Senate Majority Leader Harry Reid, a Democrat whose own re-election is in danger this November, reversed course and came out in support of the new rules after moderate Democrats in the House insisted on them as condition for passing a new $14.3 trillion debt ceiling.
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