WASHINGTON — The Senate voted 60-40 on Thursday for tough new curbs on federal spending, imposing a requirement that key parts of the budget must be paid for with spending cuts or tax increases to prevent the federal deficit from increasing. The new terms were added to legislation to increase the nation's debt limit.
The bill, which next needs approval by the House of Representatives and President Obama to become law, would allow the debt to grow by $1.9 trillion to $14.29 trillion. Moderate Democrats and most Republicans had been wary of supporting the debt limit increase without stronger assurances that future spending would be controlled.
The pay-as-you-go measure won enough centrists to allow the debt limit bill to proceed; it passed by a 60-39 vote.
"Let's not kid ourselves: we are in this financial situation — and these pay-as-you-go rules are necessary — because we spent the last decade spending money we didn't have," said Senate Majority Leader Harry Reid, D-Nev., the measure's chief sponsor.
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"We spent trillions on two wars, tax breaks for multimillionaires and corporations, and other policies. Those days are over. We simply can no longer afford it."
The plan has some exemptions — too many, Republicans said — including a permanent extension of Bush-era middle-class tax cuts, certain Medicare payments to physicians, and extensions of relief from the alternative minimum tax and the estate tax.
It requires virtually all other future spending increases or tax cuts to be offset so that they don't increase budget deficits. That means many of the Bush administration tax cuts for the wealthy, due to begin expiring at the end of this year, would have to be paid for with offsetting cuts in spending or other new taxes if they're retained, as many Republicans want.
The vote to raise the national debt limit came on a party-line vote, with 58 Democrats and two independents voting for the measure while all 40 Republicans opposed it. It came 12 hours after Obama urged lawmakers in his State of the Union address to get spending under control.