House Appropriations Chair Dave ObeyCongressional Democrats are poised to vote on raising the national debt ceiling from $12 trillion to $13.8 trillion. The vote could come before the end of the year, an effort to minimize possible political blowback in the 2010 midterm elections. The story elicited a number of comments by lawmakers. In an interview with Politico, House Appropriations Chair David Obey said, “…the credit card has already been used. When you get the bill in the mail you need to pay it.”

Groups of conservative Democrats critical of runaway spending have emerged in both the House and Senate. One such member is North Dakota’s Sen. Kent Conrad, chair of the Senate Budget Committee. Conrad teamed up with New Hampshire Republican Sen. Judd Gregg to introduce legislation to create a budget task force (press release) to plot a more sustainable fiscal course.

The legislation has 31 co-sponsors including Minnesota’s own Sen. Amy Klobuchar.  In a press release yesterday, Klobuchar said:

“We have already seen what happens to our economy when Wall Street is fiscally irresponsible.  We cannot let our federal government do the same thing,”

“We need to change the way Washington works when it comes to our long-term fiscal outlook.  This is not about being a Democrat, a Republican or an Independent.  The Bipartisan Fiscal Task Force is about trying to get something done to stop unsustainable spending and restore our financial stability.” (Press Release, “Klobuchar Sponsors New Bipartisan Fiscal Task Force Legislation to Confront Nation’s Budget Crisis”)

The task force would have 18 members, ten Democrats and eight Republicans. The committee would also have bipartisan co-chairs.

Senator Gregg posted a fact sheet on the legislation here. For more information on the Bipartisan Task Force for Responsible Fiscal Action Act of 2009, click here.

The Value Added Tax

I posted on the Value Added Tax (VAT) back on October 9th when House Speaker Nancy Pelosi said in an interview that the controversial tax was on the table.

The Value Added Tax is in the news again this week because of an article in yesterday’s New York Times suggesting a VAT is gaining support on and off Capitol Hill. According to the article, the VAT is gaining support as the only feasible way to raise enough revenue to keep up with runaway federal spending.

Pelosi isn’t the only influential lawmaker eyeing a value added tax. Senate Budget Committee Chair Kent Conrad also believes a value added tax should be on the table. In an interview with the Washington Post in May, Conrad said,

“There is a growing awareness of the need for fundamental tax reform…I think a VAT and a high-end income tax have got to be on the table.” (Washington Post, “Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look,” May 27, 2009)

Whether through spending cuts, a new task force or a national value added tax, it is becoming clear that the cure for paying off the federal credit card isn’t as simple as raising the credit limit.