by Countable | 3.20.17
The U.S. reached its debt limit on Wednesday, meaning that the federal government no longer has the authority to continue borrowing money to finance its operations. Congress will now face a vote in the near future to raise the debt limit for the first time since November 2015, when the Republican controlled Congress and then-President Barack Obama reached a deal that lifted the limit through March 15, 2017.
The Treasury Secretary Steven Mnuchin sent Congress a letter last week which said the Treasury will be able to take what are known as "extraordinary measures" to continue to fund the government’s operations in the near-term, so a government shutdown isn’t imminent. But votes to increase the debt limit are politically unpopular given that the national debt exceeds $19.9 trillion, so lawmakers will let those measures play out to buy themselves time. We’ve explained some of the obscure accounting gimmicks that let the federal government keep spending after the debt limit is reached below:
The Treasury has used all four of the extraordinary measures currently at its disposal to avoid defaulting on the U.S. government’s obligations when Congress has debated increasing the debt limit in recent years.
Suspending sales of state and local securities: Under normal circumstances, the Treasury issues government securities (things like bonds that give the gov't cash that must be repaid with interest at a later date) which count against the debt limit to state and local governments so that they can properly invest the proceeds of tax exempt bonds. The federal government is under no obligation to issue those securities, and by not doing so it slows down the rate at which it accumulates debt, usually by $4 to $17 billion monthly.
G Fund: This government account is invested entirely in securities that mature in one day before being reinvested as part of the Federal Employees’ Retirement System Thrift Savings Plan. Congress has given the Treasury the ability to stop reinvesting if doing so would exceed the debt limit. This doesn’t actually impact federal employee’s investments, which are protected because the G Fund is made whole plus interest once the debt limit impasse ends. The G Fund’s balance is around $150 billion.
Exchange Stabilization Fund: Much like the G Fund, the Exchange Stabilization Fund (ESF) account is invested entirely in one-day securities in order to allow the Treasury to buy or sell foreign currencies. The Treasury isn’t required to invest the ESF, so it can stop investing its balance of U.S. dollars — about $22 billion — at its discretion.
Civil Service Retirement and Disability Fund: This is one of the largest federal pension funds, and by declaring a "debt issuance suspension period," the Treasury is able to redeem existing investments in the fund and stop making new investments. That can only occur once the Treasury has determined that continuing normal operations would cause the debt limit to be exceeded. Benefit payments would continue to go out as normal as long as extraordinary measures haven’t been exhausted, and once the debt limit is raised the CSRDF is required to be made whole with all money being returned with interest.
That ultimately depends on how fast the federal government is spending money and the amount of space that the Treasury can create through extraordinary measures. In past debt limit standoffs, the extraordinary measures can keep the government running for 3 to 5 months, so lawmakers in Congress will have to raise the debt limit before they leave for their summer recess in August.
Congress is considering bills to require the Treasury to have a plan to pay down the national debt before raising the debt limit and allowing it to continue to borrow to pay for Social Security. You can tell your reps how you feel about those bills or the national debt generally using the "Take Action" button.
— Eric Revell
(Photo Credit: Loren / Public Domain)
Written by Countable
So let's see if I understand what is happening here? We have reached the debt ceiling, so now Treasury will kick into "extraordinary measures" mode to keep the country running. Awesome. Meanwhile, taxpayers are footing enormous bills to fund 45 and family's lavish conspicuous consumption lifestyle. Congress has just voted to add tens of billions of dollars to military spending with not even a suggestion of trying to find and eliminate waste and are presently inventing all manner of propaganda and alternative facts to push through "healthcare reform" that drops an estimated 24million from the roles of the insured, raises costs while lowering coverage for many others (particularly the elderly, disabled and chronically ill) but provides very generous tax breaks for the extremely wealthy. All the while Congressmen are earning $174,000 in base salaries plus expense accounts. Oh, and quality health insurance for life without cost. Nice. And then there's their staffs with salaries in a general range of $160,000 plus to less than $30,000. Lots and lots of staff members to do their bidding. All the while 45 continues to scream for his damned senseless wall which will also cost us billions. So that's all happening while Social Security recipients are about to be screwed again and the neediest among us will no longer have access healthcare. And in the end the debt ceiling will be raised anyway, not to insure services to the citizens most in need but to protect the excesses of the wealthy. Have I got that all about right? I think I do. And the whole situation is a pointless, unnecessary, shameful calamity. So again I say, Congress please grow a spine and some integrity and please do your job! (Hint- that doesn't mean selling your votes to corporations and the wealthy few to screw over the people you were sent to Washington to serve.)
I'm afraid you don't understand what a budget is. It's time that all departments including the DOD are audited for cost savings and conflicts of interest. You see we don't have extra money to build up the military already the largest budgeted military in the world. We have the Pentagon losing billions but no one knows where that went and we don't bother to look for it. We have no money for a Wall while cutting Coast Guard and FEMA and NOAA and NASA budgets to nothing. We can't spend millions on vacations and golf games and keeping Melania in New York while cutting the EPA, clean water and air standard and removing the Endangered Species Act protections. We can't cut millions of people's healthcare out from underneath them and insure millions of deaths but give corporations and millionaires tax cuts. You can't look at Kansas and Wisconsin and truly tell us Trickle down works or crony capitalism is the way of the future. Stop pandering to lobbyists, stop getting in the way of bills allowing us to get better pharmaceuticals, stop giving welfare to fossil fuels, stop the tax cuts to the wealthy and audit for savings rather than partisan pork projects and revenge. No pay increases to Congress till you actually start fixing things for all you constituents. That's how you lower cost, reduce waste, streamline programs and maybe pass a budget.
Per USNews article published on 11/13/15, Pfizer paid only 7.5% tax in 2015. They're just one example. Wikipedia published a graph that shows corp taxes paid as a percentage of GDP from 1946-2009. It shows a high of 6% around '47-'50 to about 1% in 2009. I kinda think we could use some of that tax money these days. If we lowered the corp tax rate to 20-25% and slashed loopholes, maybe that would help lower debt and make sure people don't die premature deaths. But what do I know, right? Oh, wait, but that would make it hard for all these Jesus loving incumbents to get re-elected, wouldn't it? Silly me.
Have the president pay for his own expenses involved in his weekly golf travels & to cover security etc. in New York. We already pay for a house for his family in DC. Anything else should be up to him. Thanks
SS should not be used to bail out government spending!! Congress do not touch SS!
Don't pay the rent at Pmurt tower or hotel bills at Mar a Lago. POTUS will understand as it's his modus operandi. That'll save us millions this year. A drop in the bucket, I know, but it'll make me feel a little bit better about having a tyrant dictator in the White House.
Maybe quit giving tax breaks to the filthy rich?!
Why are the first places that we look to cut those that impact the most marginalized segments of our culture. There are so many places that can be cut without hurting people or our environment or shutting down needed government services and impacting the lives of government employees. Cut the defense budget instead of increasing it! Stop unnecessary spending (e.g., healthcare and other perks for legislators should be what the rest of us have, curtail unnecessary trips to Mar Largo and stay at home the way the rest of us have to when our budget shrinks; appropriately tax the 1% instead of forcing us to carry them on our backs! They can afford it and we could easily get out of debt if they paid what they should commensurate with their great incomes. ) Come on folks, this isn't rocket science. Those of us with less resources do this every day.
Why don't we, instead of borrowing money, stop giving tax breaks to the rich and stop using what little money there is on the military?
Do NOT raise the national debt limit without first performing an audit of the most expensive programs the government runs to insure money is not falling through the cracks. And instead of cutting things like the National Endowment for the Arts and National Public Radio, public education, and spending on American healthcare, it's time to look at the defense budget, the amount of money paid to Congress and the Senate, and the kickbacks that lobbiests get. Stop disadvantaging the most vulnerable in our country and invest in our PEOPLE so that Americans are able to live healthy and happy. Stop the war machine and look within.
We need to pass legislation that will stop paying the exorbitant salaries paid to congress as well as the pensions. Across the country people have lost their pensions in a multitude of industries. Representatives should have to pay into retirement accounts just like the majority of Americans. Any health care legislation that is passed should be required by congress to use as well. No more tax payer paid for health care for congressman. Do not pay for additional security for Melania in NY (or any family member who choses not to live in the provided accommodations) or regular weekend trips to Florida. No tax payer $$ should go to a business run by a government official or assist in making money for a private company run by a government official. All governmental agency should have a travel budget including the first family and they should be capped on personal trips that cost tax payer monies. Congressional members should be docket for missing more than 5% of work days to include missing votes, refusing to meet with constituents, not attending committee meetings and any session of congress. Remove fraud and redundant spending by governmental agencies including the military. Negotiate low cost prescription and healthy care for those on Medicare. This should free up substantial finances.
Why have we gone this long without a plan to pay down the national debt? This demonstrates such financial irresponsibly. We should impose a term limit and salary limit for all members of congress to make sure they understand who they work for. People have been unhappy with congress for a while, and now the whole system might shut down because they didn't even try to put efforts toward paying the debt. In fact they did the opposite and approved an outrageous budget for the military who didn't need that ludacris amount of money. I'm disappointed yet again.
Don't raise debt...we will just get DEEPER IN DEBT...I'm no economist by all means but, I'm thinking maybe all those tax loopholes corporations, our 45th, and his billionaire friends take advantage of should be closed and have the billionaires of our country actually paying the right amount of taxes.
Please don't raise the debt limit. Just as the right answer to a household that can't make ends meet isn't to get another credit card so they can spend more, the government shouldn't try to go that route either. The right solutions involve spending less and making more. Reduce military spending where 5% less makes a big difference. Close tax loopholes so the wealthy people and big companies pay their fair share. No one and no company should pay less tax on net income than the middle class if their net income is higher than the middle class tax bracket.
How about impraching trump so we dont waste 25 billion on a wall, or 40 million a month on a combination of security and maralago. If congress would get a brain and stop being so greedy, and stupid, there are plenty of solutions This is the result of an incompetent, coeardly congress.
"So let's see if I understand what is happening here? We have reached the debt ceiling, so now Treasury will kick into "extraordinary measures" mode to keep the country running. Awesome. Meanwhile, taxpayers are footing enormous bills to fund 45 and family's lavish conspicuous consumption lifestyle. Congress has just voted to add tens of billions of dollars to military spending with not even a suggestion of trying to find and eliminate waste and are presently inventing all manner of propaganda and alternative facts to push through "healthcare reform" that drops an estimated 24million from the roles of the insured, raises costs while lowering coverage for many others (particularly the elderly, disabled and chronically ill) but provides very generous tax breaks for the extremely wealthy. All the while Congressmen are earning $174,000 in base salaries plus expense accounts. Oh, and quality health insurance for life without cost. Nice. And then there's their staffs with salaries in a general range of $160,000 plus to less than $30,000. Lots and lots of staff members to do their bidding. All the while 45 continues to scream for his damned senseless wall which will also cost us billions. So that's all happening while Social Security recipients are about to be screwed again and the neediest among us will no longer have access healthcare. And in the end the debt ceiling will be raised anyway, not to insure services to the citizens most in need but to protect the excesses of the wealthy. Have I got that all about right? I think I do. And the whole situation is a pointless, unnecessary, shameful calamity. So again I say, Congress please grow a spine and some integrity and please do your job! (Hint- that doesn't mean selling your votes to corporations and the wealthy few to screw over the people you were sent to Washington to serve.)" - fellow Countability member Laura (thank you Laura!)
I say do not raise the debt limit. With all of Trump's and Congress's great ideas that were just ordered and passed, there should be a great surplus within a few weeks, right? You should have money pouring in from all the repealed programs and insurance taken from the poor, the sick, the elderly and from all those tax cuts for the rich. Vote No to actually force the president's hand and make him show where all these savings are from the new and improved "Trumpcare."
My goodness. Get your spending under control! Households have to work under balanced budgets and don't get an unlimited credit card. GET UR SPENDING UNDER CONTROL! The government needs to look at the simple waste like diverting money chasing a wire tap accusations without facts v the evidence we have that Trump is collusion with the Russians. How about the wasteful spending on the many trips Trump takes to Florida? Or the money spent to protect his kids...or the wasted money of building a wall which will not salve any problem!!! How about the waste of Marco Rubio and other government officials having multiple offices. I have one office and cover multiple states in my job. Get real. The waste starts in Washington!
Well we could save 578 billion dollars from defense spending that was approved recently? But that would make to much scene?
I don't have any wisdom about the debt, but I sure am amused at the lack of outrage from the GOP about this. Remember when they squawked about The Muslim Obama trying to bankrupt the US when he wanted to raise the debt ceiling? Remember how their constituents fell for it? Remember when they shut down Congress? Remember how this was all over the news? Unbelievable how quiet they are now. Vultures and madmen.