Finance

Finance

US public debt set to rise to $16 trillion

27 January 2012 09:00 (UTC +04:00)

Baku - APA-Economics. The Democratic-led Senate on Thursday saw off a Republican bid to stop the US debt ceiling being raised, ensuring that the Obama administration has no repeat of last year’s borrowing stand off.

The Republican motion was defeated with 52 voting against to 44 in favor, with government debt currently at $15.194 trillion and set to rise to more than $16 trillion by the end of 2012.

The vote was a move by Republicans to heap scorn on President Barack Obama, whom they decry as an out-of-control spender and are seeking to oust in November’s elections.

The vote defeat effectively ensures that the administration can pay the nation’s bills until the end of the year, although Obama and the Republican-led Congress remain deadlocked over measures to bring down the debt.

Although Thursday’s vote was largely along party lines, two Democrats sided with the Republicans.

Last summer’s stand off was seen as an international embarrassment for the United States and was quickly followed by a downgrade of the country’s triple A debt rating by Standard and Poor’s, amid concerns that the world’s top economy could default on its debt.

Thursday’s vote came one week after opinion polls showed public approval of Congress had dropped to its lowest level in 38 years. Congress, during the last round of negotiations with the White House, agreed to raise what at the time was a $14.3 trillion debt limit by more than $2 trillion in exchange for equivalent spending cuts in the federal budget. Under the August deal, the debt ceiling is automatically boosted to avoid a US government default, with Obama requesting the higher debt limit in three separate increments. The current request was his final one.