THE US Senate increased the national debt to $US9 trillion ($12 trillion) yesterday, sparing the world's richest nation the embarrassment of having to default on its Treasury notes for the first time.

Senators voted 52-48 to send President George W. Bush a measure that would allow the Government to borrow an additional $US781 billion. If the debt ceiling, which is set by Congress, had not been raised by next Friday, the Bush administration could not have borrowed more money and the would have begun to default on its domestic and foreign obligations, an untenable consequence. The vote, which put Republicans in the difficult position of calling for more debt, was a political gift to the Democrats. They blasted the bill, saying it was needed because of fiscal mismanagement by Mr Bush, who came to office when the government was running record surpluses.

"When it comes to deficits, this President owns all the records," said Senate Minority Leader Harry Reid. The vote to increase the debt limit, requested by the White House, is the fourth since Mr Bush took office. In 2001, the national debt was $US5.7 trillion. Today it has ballooned to $US8.2 trillion, figures rarely talked about in Washington. The national debt is the total amount owed by the Government.  When Mr Bush took office he inherited a $US236 billion budget surplus.

His predecessor, Bill Clinton, had used budget surpluses to pay down some of the national debt in his last two years in office. Mr Bush also inherited some extraordinarily over-optimistic projections. Experts pronounced that budget surpluses would increase to $US5.6 trillion over 10 years, and there was even heady talk of paying off the entire national debt with the proceeds.

Since then a combination of factors - the September 11, 2001, terror attacks, unexpectedly low tax revenues, Mr Bush's tax cuts and runaway government spending - have plunged the yearly budget back into deficit. This year it will reach nearly $US400 billion.

What worries many analysts is the amount of debt financed by foreign governments and banks, particularly in Asia. The national debt is split between publicly held debt - money which is owed to US and foreign investors - and money owed to branches of the Government. Nearly half the publicly owed debt is held by foreigners.

is the biggest creditor, at $US668 billion. , the second-biggest, recently increased its stake by $US40 billion to $US263 billion.

"We used to have much less held by foreigners," Alice Rivlin, a former budget director for Mr Clinton, said. "It makes you much more vulnerable to people's agendas."