White House Wants Debt Limit Increase

ABC News’ Matthew Jaffe reports:

The White House today prodded Congress to increase the federal debt limit, a much-needed move as the nation has racked up record levels of red ink in recent months.

“The administration strongly supports passage of an increase in the public debt limit,” the White House said in a statement. “Such an increase is critically important to make sure that financing of federal government operations can continue without interruption and that the creditworthiness of the United States is not called into question.”

The nation’s overall debt now stands at more than $12.3 trillion after soaring over the $12 trillion mark for the first time ever last November.

In the last year the government has added to the debt as the country’s budget deficit swelled to record levels due to massive federal spending to stop the recession and save the financial system.

The government is already $388 billion in the red after the first three months of fiscal year 2010, a deficit $56 billion higher than the shortfall for the same timeframe for the last fiscal year, a year that concluded with the government racking up a record debt of $1.4 trillion.

A new proposal from Senate Democrats would boost the debt limit by $1.9 trillion up to $14.3 trillion.

-Matthew Jaffe

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