National debt hits $16T; GOP critical

ANDREW TAYLOR

Asso­ci­ated Press

WASHINGTON — The Trea­sury Depart­ment said Tues­day that the national debt has topped $16 tril­lion, the result of chronic gov­ern­ment deficits that have poured more than $50,000 worth of red ink onto fed­eral ledgers for every man, woman and child in the United States.

The news was greeted with a round of press releases from Barack Obama’s GOP rivals, who used the grim-but-expected news to crit­i­cize the pres­i­dent for the government’s fis­cal per­for­mance over his 3 1/2 years in office. Obama has presided over four straight years of tril­lion dollar-plus deficits after inher­it­ing a weak econ­omy from his pre­de­ces­sor, George W. Bush.

“We can no longer push off the tough deci­sions until tomor­row,” said No. 2 House Repub­li­can Eric Can­tor, R-Va. “It’s time to address the seri­ous fis­cal chal­lenges we face and stop spend­ing money we don’t have.” Last sum­mer, Can­tor dropped out of a set of bud­get talks hosted by Vice Pres­i­dent Joe Biden, cit­ing the insis­tence of the White House on tax increases to help close deficits that require the gov­ern­ment to bor­row 33 cents of every dol­lar it spends.

The spi­ral­ing debt means that law­mak­ers and the even­tual win­ner of the White House in Novem­ber will have to pass a law early next year to raise the government’s bor­row­ing cap from the cur­rent ceil­ing of $16.39 tril­lion. Pass­ing such leg­is­la­tion last year proved enor­mously dif­fi­cult and the nation’s credit rat­ing suffered.

First, how­ever, law­mak­ers will try dur­ing a post-election lame duck ses­sion to renew Bush-era tax cuts and head off a round of forced bud­get aus­ter­ity as auto­matic bud­get cuts are sched­uled in Jan­u­ary to slam both the Pen­ta­gon and domes­tic pro­grams. Those cuts were required by another failed set of bud­get talks last fall by a bipar­ti­san “supercommittee.”

Sen. Rob Port­man, R-Ohio, said: “This debt will not only be a lia­bil­ity for our kids and grand­kids, but econ­o­mists also tell us that it will limit eco­nomic growth and kill mil­lions of jobs now and in the future.” Port­man was a mem­ber of last year’s failed super­com­mit­tee, which dead­locked over taxes and cuts to pop­u­lar ben­e­fit programs.

The debt topped the $16 tril­lion mark on Friday.

Trea­sury Sec­re­tary Tim­o­thy Gei­th­ner has said the gov­ern­ment will likely reach its debt limit at the end of the year. How­ever, Gei­th­ner has said he will be able to employ var­i­ous “extra­or­di­nary mea­sures” to keep the gov­ern­ment oper­at­ing until some­time early next year. Gei­th­ner would need to use these mea­sures if Con­gress, as expected, fails to tackle the debt limit by year’s end.

Last year’s pro­longed impasse between the GOP-dominated House and Democ­rats con­trol­ling the Sen­ate and the White House con­tributed to a move by the rat­ings agency Stan­dard & Poor’s to lower America’s AAA bond rat­ing for the first time in the country’s his­tory, nudg­ing it down a notch to AA+ for long-term securities.

GOP pres­i­den­tial nom­i­nee Mitt Rom­ney promises sharp spend­ing cuts and a bal­anced bud­get by 2020 if he wins the White House, but has pro­vided lit­tle detail about how that might be accomplished.

For his part, Obama has declined to tackle the spi­ral­ing growth of ben­e­fit pro­grams like Medicare and the Med­ic­aid health pro­gram for the poor and dis­abled. His pro­pos­als to hike taxes on upper income earn­ers have been repeat­edly rejected by Repub­li­cans, but he promises to insist on them if he wins re-election.

Posted by AP News on Sep 4 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.