MercoPress. South Atlantic News Agency

US raises debt ceiling to record breaking 9 trillion

President George W Bush signed a bill raising the United States national debt ceiling to nearly 9 trillion US dollars. The bill means the government can borrow a further 781 billion and stops what would have been a first ever default of Treasury notes.

The bill means the government can borrow a further 781 billion and stops what would have been a first ever default of Treasury notes.

The debt increase, the fourth since Mr Bush came to power, comes as the budget deficit reaches near record levels.

Last week the US Congress pushed the ceiling on the national debt and the House and Senate promptly voted for major spending initiatives for the war in Iraq, hurricane relief and education.

On Thursday, the House approved 92 billion in new money for the wars in Iraq and Afghanistan and for relief along the hurricane-ravaged Gulf Coast.

The Senate adopted a 2.8 trillion budget blueprint that anticipates deficits greater than 350 billion for both this year and next.

The spending blueprint, approved 51-49, little resembles US President George W. Bush's proposal last month for the budget year that begins October 1. To the disappointment of budget hawks, the Senate's measure would break Bush's proposed caps on spending for programs such as education, low-income heating subsidies and health research.

All told, senators endorsed more than 16 billion in increases above Bush's proposed 873 billion cap on spending appropriated by Congress each year.

"When it comes to deficits, this president owns all the records" said Senate Minority Leader Harry Reid. "The three largest deficits in our nation's history have all occurred under this administration's watch". The debt limit increase was the fourth of Bush's presidency, totaling 3 trillion US dollars.

With the budget deficit expected to approach US$400 billion for both this year and next, an additional increase in the debt limit almost certainly will be required next year.