WASHINGTON (CN) - The House on Thursday raised the federal debt ceiling by nearly $2 trillion, in a 217-212 vote, but at the same time voted 233-187 to require that legislation be paid for. House Speaker Nancy Pelosi blamed the necessity for both bills on former President Bush, who she says put a "giant mogul" in a trend of shrinking deficits.
Pay-as-you-go legislation was initially adopted under the first President Bush and continued under former President Clinton.
"And all of those times, it brought down the deficit and under the case of President Clinton, led to a trajectory of $5.6 trillion in surplus," the California lawmaker said. "I wouldn't say a bump in the road, I would say a giant mogul when the second President Bush came in with a Republican Congress and the Republican President abandoned PAYGO."
Despite the opposition of all Republicans and more than 30 Democrats, the House has joined the Senate in voting to raise the debt ceiling by $1.9 trillion to allow the United States to hold $14.3 trillion worth of debt. The government was roughly $90 billion shy of its $12.39 trillion limit.
If the government ever exceeded the limit, the country would effectively default, which would deal a severe blow to treasury bonds and the dollar.
Congress had already voted in December to raise the debt ceiling by $290 billion, but lawmakers expect the new limit to be adequate until sometime in 2011, allowing lawmakers to avoid addressing the touchy subject before the November midterm elections.
The Senate approved both the debt hike and the pay-as-you-go measures last week, each with no Republican support.
The House had already passed a rule that it would pay for legislation, but with the president's signature, the rule would not become a law applicable in both galleries.
The legislation will now go to Obama as a single package for his signature, and he is expected to sign it.
Obama proposed the pay-as-you-go legislation back in June. "Paying for what you spend is basic common sense," he said in submitting the proposal. "Perhaps that's why, here in Washington, it's been so elusive."
Republicans have pointed out that today's pay-as-you-go legislation includes more exemptions to the rule than that adopted from 1990 until 2002, although the rule was consistently waived by Congress towards the end.
The act would only apply to new laws, so growing demands by aging baby boomers on entitlements that are already written into the law, such as Social Security and Medicare, would not need to be countered by tax increases or other measures.
Entitlement programs are expected to drive the largest growth in the deficit, so the act would not eliminate the deficit, but could help rein in its growth.
"Entitlement increases and tax cuts need to be paid for," Obama declared. "They're not free, and borrowing to finance them is not a sustainable long-term policy."
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.