Democratic lawmakers in the U.S. Senate have proposed a bill that would increase the federal debt ceiling by $1.9 trillion to $14.3 trillion, and extend the Treasury’s borrowing authority into 2011.
The push came less than a month after the Senate approved a short-term increase that raised the ceiling by $290 billion to $12.4 trillion. Democratic Senator Max Baucus of Montana, the chairman of the Senate Finance Committee, justified the move by warning that if the ceiling is not raised "the Treasury would default on its debt for the first time in history," quoted by Bloomberg.
However, the proposal has been blasted by the Employment Policies Institute (EPI) that called it "frightening."
The EPI launched the Defeat the Debt campaign that highlighted the threat posed by unchecked borrowing and spending by putting 11 destitute Uncle Sams in New York’s Times Square to beg for $12 trillion from taxpayers.
"America’s current level of spending is unsustainable," said EPI executive director Richard Berman.
"The country has never before been in such a precarious financial position where we are so indebted to foreign governments," he added. "The government must defeat the debt now, or we will live to regret it."
Some commentators have suggested the proposal for such a substantial increase stems from the Democrats’ desire to put the debt ceiling issue behind them by the time they begin campaigning for the midterm elections later this year.