Merry Christmas, America: Uncle Sam isn't going to Default on His Debt

When Senate Republicans and Democrats reached a compromise [1] on Tuesday to allow a final health care vote earlier than planned on Christmas Eve, they also made room to finish off the year with a vote to raise the nation's debt limit temporarily.

This is good news for all of you that didn't want to see the economy collapse this holiday season, as the government cannot legally borrow more money than Congress has authorized. The Treasury Department had told Congress that it had to raise the limit before the end of December and the House passed [3] its patch on Dec. 16. The temporary raise will set up a showdown between Democrats and the GOP – with a handful of conservative Dems tagging along – over debt and spending in 2010.

According to a Roll Call (subscription required) article [4] published yesterday, the Senate deal stipulates that the temporary debt-ceiling raise have no amendments and that Republicans be able to offer amendments to a permanent debt-ceiling solution that the Senate is scheduled to take up the day after it returns from the holiday break on Jan. 20. The amendments will include:

a rescissions package authored by Sen. Tom Coburn (R-OK), a set of spending caps proposed by Sen. Jeff Sessions (R-AL), an amendment by Sen. John Thune (R-SD) sunsetting the Troubled Asset Relief Program, an amendment on the Environmental Protection Agency’s regulation of carbon dioxide emissions by Sen. Lisa Murkowski (R-AK) and a fiscal task force amendment by Sen. Judd Gregg (R-NH). [Sen. Harry] Reid (D-NV) will also offer a pay-as-you-go budgeting amendment.

The chances of these amendments passing is not great, nor are the chances that the House would pass anything similar, except PAYGO legislation, which the House passed [5] on Dec. 3 when it extended the estate tax. As far as the "fiscal task force amendment," OMB Watch has laid out its opposition [6] at length [7] to the deficit commission that Gregg and a small group of nouveau deficit hawks has been pushing lately.

Image by Flickr user vanrooy 13 [8] used under a Creative Commons license.