Today in Washington D. C. - May 4, 2009

Senate will resume consideration of S. 896, a housing bill, which will also provide more money and borrowing authority to the FDIC. At 5:30, senators will vote on two amendments to the bill.

The New York Times has a must-read article today about concerns over the country’s ability to sustain the record levels of borrowing and spending that Democrats in Congress and this administration have approved. The Times writes, “As the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government. . . . The rising tab has prompted warnings from the Treasury that the Congressionally mandated debt ceiling of $12.1 trillion will most likely be breached in the second half of this year.”

Further, there is “concern that the interest the government must pay on its debt obligations may become unsustainable or weigh on future generations. The Congressional Budget Office expects interest payments to more than quadruple in the next decade as Washington borrows and spends, to $806 billion by 2019 from $172 billion next year. ‘You’re just paying more and more interest and having to borrow more and more money to pay the interest,’ said Charles S. Konigsberg, chief budget counsel for the Concord Coalition, which advocates lower deficits. ‘It diverts a tremendous amount of resources, of taxpayer dollars.’” Have we put ourselves in the position of someone taking a cash advance to make a minimum credit card payment?

Unsustainable debt isn’t the only financial concern getting noticed today. Professor Allen H. Meltzer of Carnegie Mellon University has an op-ed in The New York Times today warning that the administration’s borrow-and-spend policies could lead to inflation problems. Meltzer writes, “If President Obama and the Fed continue down their current path, we could see a repeat of those dreadful inflationary years [of the 1970s].”

And yet The Washington Post reports today that President Obama plans to expand the federal role in student lending to an unprecedented level “expand[ing] the Pell Grant program, making it an entitlement akin to Medicare and Social Security.” Understating things slightly, The Post writes, “Creating another mandatory spending program during a recession, with a record high federal deficit, leaves many lawmakers uneasy.”

Republicans have been warning that there are consequences to the record levels of spending, borrowing, and taxing coming from this administration and Congress. It’s good to see the press beginning to call attention to these issues. The question, though, is whether the White House and Democrat leaders are listening.

---

Tags: U.S., Congress, US Senate, Washington D.C. To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!