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National Debt

Federal Debt Finally Getting the Attention is Deserves

  • May 11, 2011

    After years of inaction and a looming crisis, it seems our leaders have finally realized that we need to do something about that pesky $14.2 trillion in federal debt. While this seems more political posturing for the White House, House Republicans are still beating the drum that more debt is unacceptable. Here's what's going on this week in the debt discussion:
    1. On Monday, House Speaker John Boehner delivered remarks to The Economic Club of New York making the case for ending the burden of debt. Boehner said “without significant appending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase.” He once again “ruled out tax increases” that would stem job creation and said spending cuts should be in excess of any increase in the debt limit. In addition, he also stated that if a compromise was to be reached on raising the debt limit, then cuts would have to be made in direct proportion to that increase. Considering that some lawmakers are calling for a debt limit increase of $2 trillion, this could yield trillions of dollars in cuts, but $2 trillion more in debt.
    2. The House Armed Services Committee will be marking up their National Defense Authorization Act today. One key provision included in the bill which reauthorizes U.S. defense spending for the next fiscal year would require a study on the amount of U.S. debt held by China, and the extent to which that debt is a U.S. national security risk. The language stems from widespread concerns on the security risks posed by debt held by China. This was echoed by Joint Chiefs of Staff Chairman Admiral Mike Mullen, who said last June that the national debt is the "biggest national security threat" faced by the United States.

    3. On Thursday Vice President Joe Biden and the bipartisan group of budget-negotiating lawmakers will head back to the Blair House for further discussions on the debt limit. The get-together comes as House GOP leaders, despite pressure from some on Wall Street for a clean debt ceiling bill, are continuing to threaten not to raise the borrowing limit without a concession on deep spending cuts. The lawmakers are carrying Speaker Boehner's call for at least $2 trillion in spending cuts if the debt ceiling is raised by that same amount. House Republicans have previously circulated a list of $715 billion in mandatory cuts to Biden for consideration.

    CapitolWatch continues to monitor these developments as lawmakers look to come to an agreement. They will have to reach one by August 2nd, or the government risks defaulting on payments. Already Treasury Secretary Tim Geithner has begun to take "extraordinary measures" to ensure the limit is not reached before that time.

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