U.S. government proposes to increase debt limit

The U.S. government urged the Congress on Wednesday to pass an increase in the federal debt limit, according to a statement released by the White House.

"The administration strongly supports passage of an increase in the public debt limit. Such an increase is critically important to make sure that financing of federal government operations can continue without interruption and that the credit worthiness of the United States is not called into question," said the White House.

U.S. Senate Democrats have proposed permitting the federal government to borrow an additional 1.9 trillion U.S. dollars to pay its bills. That would permit the national debt to reach 14.3 trillion dollars.

The increase in the debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress.

The borrowing limit proposal will need at least 60 Senators' votes to pass the legislation.

The financial crisis and economic recession had driven the U.S. federal budget deficit to a historic high level of 1.42 trillion dollars in fiscal year 2009, which ended in September 30.

Economists expect that the debt burden will become even heavier in fiscal year 2010 since the economic recovery is relatively modest, which may not generate enough tax revenue to cope with the speed of public spending.

Source: Xinhua