President Barack Obama Friday signed into law a bill allowing the United States to borrow another 1.9 trillion dollars, and offsetting the cost of new programmes with spending cuts or tax rises. Obama signed the measure, raising the US debt ceiling to 14.3 trillion dollars, with no public flourish, at a time of rising public anxiety over increasing US government debts and deficits.
Democrats included the so-called "PAYGO" measure partly to calm rising public concern over government debt, which is becoming a key issue in the run-up to mid-term congressional elections in November. House of Representatives speaker Nancy Pelosi said that the PAYGO measure was a vital step towards ending the kind of fiscal irresponsibility that buckled US government finances.
"It has a proven track record of success," Pelosi said. "When instituted in the 1990s, it produced record surpluses; when abandoned by the Bush administration and the Republican-led Congress in the last decade, we were left with record deficits. "Today, these irresponsible practices will end." Congress was forced to act because the US debt ceiling threatened to exceed its previous 12.374 trillion dollar level this month.