Debt Continues Upward

DEFICIT

With budget ‘deal,’ national debt free to soar again

Published October 17, 2013

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The good news: The national parks are open, furloughed federal workers are back on the job, and the country will not cut off benefit payments because it can't borrow. 

The bad news: The national debt is back on course to hit $17 trillion any day now, with no deal in sight to ever reverse the climb. 

The latest increase in the debt cap is the sixth since President Obama took office, when the debt was $10.6 trillion. It was raised three times when Democrats controlled Congress, and has been raised three times since Republicans took control of the House. 

Fiscal conservatives and government watchdog groups reacted with dismay Thursday after Washington, following weeks of hard-nosed negotiations, produced only a stopgap bill to end the partial government shutdown and raise that cap. And despite the chaos of the past few weeks, they are once again trying to refocus Washington on the need to -- seriously -- lasso the nation's debt and break the habit of endless over-spending. 

"Both houses should act quickly to stop the madness," said Maya MacGuineas, head of the Committee for a Responsible Budget and the Campaign to Fix the Debt. While voicing relief that the partial shutdown is over, she called the last-minute deal "incredibly disheartening," describing the debt as a "fire" that could "get out of control at any moment." 

Republicans have been modestly emboldened in their push for spending cuts after the dire consequences that administration officials said would emerge from the so-called sequester, in large part, did not happen. Even the partial government shutdown had a limited impact on the country. 

Obama, while urging both sides to come together on a new budget agreement in the coming weeks that addresses the nation's fiscal problems, on Thursday also downplayed the red ink. 

"The deficit is getting smaller, not bigger," Obama said. 

That's true. But, Sen. Marco Rubio, R-Fla., said: "You still have an unsustainable problem in place." 

Since Obama took office, the total national debt has risen by nearly 60 percent. It was $10.6 trillion on the day he took office. It was $16.7 trillion when the nation technically hit the debt ceiling. 

But, even during that period, the Treasury racked up another $200 billion in debt, borrowing from various U.S. funds to buy more time while Congress debated. As the New York Post explained Thursday, the debt is actually at $16.9 trillion. 

So what do numbers so impossible to comprehend mean for the United States? 

The nonpartisan Congressional Budget Office issued a rather dire warning last month about what the future holds if the trajectory is not changed. 

The analysis explained how the government has been expanding at historic rates. Between 2009 and 2012, it said, deficits were larger relative to the size of the economy than at any point since 1946 -- in turn fueling the rapid growth in the debt. 

Deficits are projected to fall for the next few years, but then rise again, in large part because of two major factors -- interest on the debt, and entitlement programs. 

The growth of the debt has triggered a vicious cycle, where higher debt leads to bigger interest payments, in turn growing the debt even more. 

The CBO estimates that by 2038, interest on the debt will rise to 5 percent of GDP -- compared against a modern historical average of 2 percent. That means less money in the federal coffers for everything from the military to benefits programs. 

But the biggest benefits programs, known in Washington as entitlements, are the dominant factor. 

Programs like Medicare, Medicaid and Social Security are poised to eat up more and more of the federal budget. The CBO says the share of spending on those programs will double by 2038, to 14 percent of GDP. As a consequence, spending on everything else will drop. 

Obama said Thursday that longer-term deficits do need to be addressed, and that budget negotiators need to focus on programs like Medicare and Social Security. 

But Rubio said the problem is Obama has resisted major changes to any of those programs, due in part to resistance from the liberal base.

Exploding National Debt Explained

A summary of what our so-called leaders have gotten us into

Debt Crisis

House of Representatives
Transcript: Boehner's Speech on Debt Talks
Published July 25, 2011| FoxNews.com

Good evening. I'm John Boehner. I serve as Speaker of the whole House -- of the members of both parties that you elect. These are difficult times in the life of our nation. Millions are looking for work, have been for some time, and the spending binge going on in Washington is a big part of the reason why.

Before I served in Congress, I ran a small business in Ohio. I was amazed at how different Washington DC operated than every business in America. Where most American business make the hard choices to pay their bills and live within their means, in Washington more spending and more debt is business as usual.

I've got news for Washington - those days are over.

President Obama came to Congress in January and requested business as usual -- yet another routine increase in the national debt limit -- we in the House said 'not so fast.' Here was the president, asking for the largest debt increase in American history, on the heels of the largest spending binge in American history.

Here's what we got for that spending binge: a massive health care bill that most Americans never asked for. A 'stimulus' bill that was more effective in producing material for late-night comedians than it was in producing jobs. And a national debt that has gotten so out of hand it has sparked a crisis without precedent in my lifetime or yours.

The United States cannot default on its debt obligations. The jobs and savings of too many Americans are at stake.

What we told the president in January was this: the American people will not accept an increase in the debt limit without significant spending cuts and reforms.

And over the last six months, we've done our best to convince the president to partner with us to do something dramatic to change the fiscal trajectory of our country. . .something that will boost confidence in our economy, renew a measure of faith in our government, and help small businesses get back on track.

Last week, the House passed such a plan, and with bipartisan support. It's called the 'Cut, Cap, and Balance' Act. It CUTS and CAPS government spending and paves the way for a Balanced Budget Amendment to the Constitution, which we believe is the best way to stop Washington from spending money it doesn't have. Before we even passed the bill in the House, the President said he would veto it.

I want you to know I made a sincere effort to work with the president to identify a path forward that would implement the principles of Cut, Cap, & Balance in a manner that could secure bipartisan support and be signed into law. I gave it my all.
Unfortunately, the president would not take yes for an answer. Even when we thought we might be close on an agreement, the president's demands changed.

The president has often said we need a 'balanced' approach -- which in Washington means: we spend more. . .you pay more. Having run a small business, I know those tax increases will destroy jobs.

The president is adamant that we cannot make fundamental changes to our entitlement programs. As the father of two daughters, I know these programs won't be there for them and their kids unless significant action is taken now.

The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.

You see, there is no stalemate in Congress. The House has passed a bill to raise the debt limit with bipartisan support. And this week, while the Senate is struggling to pass a bill filled with phony accounting and Washington gimmicks, we will pass another bill - one that was developed with the support of the bipartisan leadership of the U.S. Senate.

Obviously, I expect that bill can and will pass the Senate, and be sent to the President for his signature. If the President signs it, the 'crisis' atmosphere he has created will simply disappear. The debt limit will be raised. Spending will be cut by more than one trillion dollars, and a serious, bipartisan committee of the Congress will begin the hard but necessary work of dealing with the tough challenges our nation faces.

The individuals doing this work will not be outsiders, but elected representatives of the people, doing the job they were elected to do as outlined in the Constitution. Those decisions should be made based on how they will affect people who are struggling to get a job, not how they affect some politician's chances of getting reelected.

This debate isn't about President Obama and House Republicans … it isn't about Congress and the White House … it's about what's standing between the American people and the future we seek for ourselves and our families.

You know, I've always believed, the bigger government, the smaller the people. And right now, we have a government so big and so expensive it's sapping the drive of our people and keeping our economy from running at full capacity.

The solution to this crisis is not complicated: if you're spending more money than you're taking in, you need to spend less of it,
There is no symptom of big government more menacing than our debt. Break its grip, and we begin to liberate our economy and our future.

We are up to the task, and I hope President Obama will join us in this work.

God bless you and your families, and God bless America.


Read more: http://www.foxnews.com/politics/2011/07/25/transcript-boehners-speech-on-debt-talks/#ixzz1TDIxst7h