On January 27, 2010 the U.S. Senate passed legislation authorizing an increase in the statutory ceiling on federal borrowing. Senators voted (60-39) to raise the debt ceiling by $1.9 trillion, to $14.294 trillion (H J Res 45). The legislation now goes to the House, where it may be considered next week. Budget experts estimate that the $1.9 trillion increase should be large enough to last into 2011.
During consideration of the debt ceiling increase, the Senate also voted (60-40) to impose statutory pay-as-you-go (PAYGO) budget rules for the first time since 2002. The PAYGO rules adopted by the Senate would require that any new spending or tax cuts be offset by cuts elsewhere in the budget. However, the Senate carved out several significant exceptions including the five-year extension of the Medicare “doc fix,” which prevents cuts in Medicare payments to physicians. These provisions largely mirror a PAYGO bill that the House passed in July (HR 2920), though the House version included permanent exemptions for Medicare payments to physicians.
