Entries in National Debt (13)


Paul Ryan Calls America a ‘Country in Decline’

Steve Pope/Getty Images(ADEL, Iowa) -- Paul Ryan said he believes the increasing national debt is causing the nation to become a “country in decline.”

At a rally in Adel, Iowa Wednesday, Ryan, the Republican candidate for vice president, talked about the debt, now estimated at $16 trillion, and painted a grim picture of how it is affecting the country.

“We have a really big decision to make going forward,” Ryan said. “We know what the last four years has brought us. We are a country in doubt. We hit $16 trillion of debt. That was announced yesterday. That’s a country in decline. We have a clear choice. Are we going to stay on the path that President Obama has placed us on or are we going to turn this around, win this election and get the country back on the right track?”

The Obama campaign responded to Ryan: “What a pessimistic comment to come from the Republican ticket at a time when we’re continuing to recover, more work needs to be done,” Obama campaign spokesperson Jen Psaki told reporters aboard Air Force One.

Ryan initially noted the surpassing of the $16 trillion mark Tuesday, the first day of the Democratic National Convention in Charlotte. It appears the U.S. first reached the new $16 trillion debt figure last week, on Aug. 31, according to the Daily Treasury Statement. The Treasury Department quietly posted it on its website Tuesday.

Copyright 2012 ABC News Radio


Ryan Calls Hitting $16 Trillion Debt Mark ‘Little Bit of a Downer’

Scott Olson/Getty Images(CEDAR RAPIDS, Iowa) -- Paul Ryan mentioned the national debt surpassing $16 trillion on Tuesday, calling it “a little bit of a downer.”

“We just heard about an hour ago that our government eclipsed the $16 trillion mark in our national debt,” Ryan said at a rally with over 800 people in Cedar Rapids, Iowa. “This is a serious threat to our economy. Of all the broken promises from President Obama, this is probably the worst one because this debt is threatening jobs today, it is threatening prosperity today and it is guaranteeing that our children and grandchildren get a diminished future.”

It appears the U.S. first reached the new $16 trillion debt figure last week, on Aug. 31, according to the Daily Treasury Statement. But the milestone was not realized until Treasury quietly posted it on their website Tuesday.

At last week’s Republican National Convention in Tampa, a debt clock hanging in the arena ticked the debt upwards. On Tuesday afternoon, it surpassed that number and Ryan sarcastically noted the Democrats holding their convention this week in Tampa don’t have a debt clock.

“The problem is, the president keeps kicking the can down the road. No leadership on this issue. The Senate hasn’t even passed a budget in three years. We have a very clear choice ahead of us,” Ryan said.

Iowa Gov. Terry Branstad introduced Ryan and also mentioned the national debt.

Copyright 2012 ABC News Radio


US Debt Crisis: Can Congress Reach a Solution?

Stephen Chernin/Getty Images(WASHINGTON) -- As Congress turns its attention to the budget and the country's fiscal situation, the debt ceiling debate that has been simmering underneath the surface could come to a boil in the near future.

The Treasury Department estimates the United States will reach its debt limit between April 15 and May 31.  Administration officials are ringing alarm bells and warning of dire consequences if the $14.3 trillion ceiling isn't raised.

But Republican lawmakers say they won't commit to such a move until President Obama takes bold steps in tackling entitlement programs like Medicare, Medicaid and Social Security that are weighing down the country's pocketbook.

"Republicans in the Senate will not be voting to raise the debt ceiling unless we do something significant about the debt," Senate Minority Leader Mitch McConnell, R-Ky., said earlier this month.  "I don't think he has to lay out in public exactly what he's willing to do, but we need to begin serious discussions, and time's a wasting."

Senate Republicans reportedly are working on a Balanced Budget Amendment, a Constitutional amendment that would require a balanced budget every year, as a condition to raising the debt ceiling.

While the debate over the debt limit and budget is taking place far from the purview of most Americans, its repercussions can be significant.

Raising the debt limit doesn't mean the federal government will be allowed to spend more.  Rather, it's a tool to allow Treasury to make payments to vendors under the budget passed by Congress.

If the debt ceiling is not raised, the Treasury may not be able to make payments to agencies, which could result in delayed Social Security and Medicare checks.  The Treasury has mechanisms in place that could delay the negative ripple effects for some time, and experts say the two parties are likely to come to a resolution before that tipping point is reached.

Copyright 2011 ABC News Radio


Government Forecast: Chance of Shutdown

Photo Courtesy - Getty Images(WASHINGTON) -- There is a three-pronged budget war between President Obama and Republicans in Washington and it has politicians uttering a word they haven't used since 1994: shutdown.

On one front: the fight over what programs to cut next year.  On another: whether to extend the ever-rising debt ceiling again.  And then there is the confrontation that could have the most immediate impact: whether the federal government will be shut down next month.

Government funding is due to run out March 4 when the latest continuing resolution expires.  If Congress fails to act, then the government would shut down.

In recent days Democrats have repeatedly called for Republicans to take the prospect of a shutdown off the table, a call that Jack Lew, the Office of Management and Budget director, reiterated Wednesday.

"We all want to avoid a situation like that.  It's not the right way to run the government and I think we have a broad agreement that we need to keep essential services going," Lew said.

But the chairman of the House Budget Committee, Rep. Paul Ryan (R-Wis.), had a different view.  "It is not our desire to see the government shutdown, but equally we don't want to rubber-stamp these elevated spending levels."

Even if the shutdown is avoided, at some point later this spring the national debt is set to hit its current $14.3 trillion limit.  If Congress fails to act on the administration's request to raise the debt limit, then the government would have trouble refinancing its debt, taking in money to continue operations, and even default would be a possibility.

Copyright 2011 ABC News Radio


Spending Showdown: GOP’s Pre-Emptive Strike On Obama’s SOTU

Photo Courtesy - Jim Watson/AFP/Getty Images(WASHINGTON) -- Republican leaders over the weekend previewed their arguments against the spending proposals President Obama plans to outline in his State of the Union address Tuesday, warning, as Senate Minority Leader Mitch McConnell did, not to hide spending proposals under the guise of “investments.”

“With all due respect to our Democratic friends, any time they want to spend, they call it investment, so I think you will hear the president talk about investing a lot Tuesday night,” McConnell of Kentucky said on Fox News Sunday.

“We've got a huge spending problem here," he added.  "We've had over $1 trillion annual deficit each of the last two years....I mean, most of us think, and most American -- of the American people think that we need to do something about this and start doing it now."

McConnell and his Republican colleagues were trying to get ahead of the president’s remarks Tuesday night in which he plans to say that the U.S. must “out-innovate,” “out-compete” and “out-educate” other countries.

"My principal focus, my number one focus, is going be making sure that we are competitive, that we are growing, and we are creating jobs not just now but well into the future,” Obama said in a video preview of his speech.

He also plans to make the case for the health care reform law as well as protecting education programs from the budget knife.

“We're also going to have to deal with our deficits and our debt in a responsible way,” Obama said in the preview.

But as House Republican Leader Eric Cantor cautioned in an appearance on NBC’s Meet the Press, “Republicans are not going to vote for this increase in the debt limit unless there are serious spending cuts and reforms.”

Copyright 2011 ABC News Radio


Debt Looms Large on Senators' Minds

Photo Courtesy - ABC News(WASHINGTON) -- Sens. Joe Lieberman, I-Conn. and Kent Conrad, D-N.D. told ABC News they want to hear President Obama talk about solving the nation's growing debt problem when he speaks to the nation on Tuesday in his State of the Union address.

Lieberman said he wants Obama's speech to "deal with the biggest long-term threat to America's strength and our economy and that is the debt.  And I hope the President will really be hands on and say he's willing to take political risks if we are, to get America's books back in balance for the sake of our children and grandchildren."

Sen. Conrad explained why the country's debt is so difficult to address.

"The American people say: don't touch Social Security, don't touch Medicare, don't cut defense.  That's 84 percent of the federal budget.  If you can't touch 84 percent of the federal budget -- and, by the way, they also don't want to touch revenue.  You're down to 16 percent of the budget, at a time where we're borrowing forty cents of every dollar they spend," Conrad said.

"There needs to be leadership to help the American people understand how serious this problem is and that it's going to take a lot more than cutting foreign aid and taxing the rich," Conrad explained.  "You're not going to solve the issue that way."

Sen. Kay Bailey Hutchison, R-Texas, on the other hand, told ABC News that she was less concerned with the content of Obama's speech and more concerned with his follow-through on helping businesses.

"Will he really get his regulatory commissions to cut back on the regulations that are hurting the growth of business?  Will he agree to some changes in the Obamacare which is keeping people from hiring?  I can tell you, I'm all over my state.  That's what I hear," Hutchison said.  "They're not going to hire people if they are looking at these big fines and big expenses in the health care bill."

Copyright 2011 ABC News Radio


GOP Lawmakers Unveil $2.5 Trillion Spending Cuts Package

Photo Courtesy - Getty Images(WASHINGTON) -- Less than a week before President Obama is set to deliver his State of the Union address next Tuesday, a group of House Republicans introduced a proposal Friday to cut spending from more than 100 federal programs and cut back spending levels by $2.5 trillion over the next decade.

The bill, known as the Spending Reduction Act, would hold non-security discretionary spending for fiscal year 2011 to fiscal year 2008 levels, and freeze non-defense discretionary spending to fiscal year 2006 levels for a 10-year budget window -- saving almost $2.3 trillion over the next 10 years, according to the Republican Study Committee.

The national debt has nearly doubled over the past four years from $8.6 trillion to $14 trillion.  Compared to current projections from the Congressional Budget Office, Jordan said the bill would save taxpayers an estimated $2.5 trillion through 2021.

Rep. Scott Garrett of New Jersey said the legislation fulfills the GOP’s pledge to cut spending back to 2008 levels and would also return $45 billion from the stimulus bill that has not yet been spent.

At the start of FY 2012, spending is cut back to 2006 levels and frozen for the next 10 years.  To help achieve these savings, the bill shrinks the size and cost of the civilian federal workforce and specifically targets over 100 budget items and spending reforms, according to the committee.

The bill would save $30 billion by eliminating federal control of Fannie Mae and Freddie Mac, and would save about $80 billion by prohibiting any fiscal year 2011 funding from being spent to implement any provisions in the health care law that was repealed in the House Wednesday.

The measure would also eliminate automatic pay increases for civilian federal workers for five years and would cut the civilian workforce by 15 percent through attrition -- permitting the hiring of only one new worker for every two workers who leave the federal workforce until the reduction target has been met.

House Democrats largely rejected the plan, arguing that the proposed cuts only create more unemployment while jeopardizing the economic recovery.

Copyright 2011 ABC News Radio


Geithner Predicts ‘Catastrophic Damage’ Should Debt Limit Not be Raised

Photo Courtesy - Getty Images(WASHINGTON) -- Treasury Secretary Timothy Geithner issued a dire warning Thursday should Congress vote against raising the nation’s $14.3-trillion debt limit.

In a letter to House Speaker John Boehner, Geithner said such a vote would mean the Treasury “would be prevented by law from borrowing in order to pay obligations the Nation is legally required to pay,” and would cause “catastrophic damage to the economy.”

Geithner has asked that Congress act quickly to raise the ceiling.

“Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs," Geithner wrote. “Even a very short-term or limited default would have catastrophic economic consequences that would last for decades.”

Saying that Congress needs to tread carefully, Boehner issued a response to President Obama’s request to raise the limit.

“The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington,” Boehner said. “While America cannot default on its debt, we also cannot continue to borrow recklessly, dig ourselves deeper into this hole, and mortgage the future of our children and grandchildren.”

Boehner urged a bipartisan cooperation in addressing the budget process in the New Year.

Copyright 2011 ABC News Radio


Republicans' New Year's Resolutions: Repeal, Resist and Investigate

Photo Courtesy - Getty Images(WASHINGTON) -- President Obama returns from his Hawaiian holiday this week to a changed Washington where Republicans will control the House of Representatives.

But don't count on a new era of bipartisanship any time soon.  Congress's new Republicans and old Democrats are already at war.

Lawmakers sparred Sunday during talk shows about the national debt, for starters.  Even as the debt races toward $14 trillion, some Republicans said they would oppose extending the debt limit beyond the current $14.3 trillion, although such a move could shut down the government.

Republicans are threatening to cut off the ability of the government to borrow money unless spending goes back to where it was before the stimulus and before the banking bailout.

The fight over the national debt is on the horizon.  More immediately, Republicans will start with health-care overhaul, signed into law last year after a bruising, lengthy legislative battle.

One of the first votes of the new Congress in 2011 will be an effort to repeal the health care bill Democrats passed in 2010.  That repeal effort will likely fail in the Senate, which is still controlled by Democrats.  But Republicans will then try to starve the bill of money.

The third line of attack will be investigations.  The new Republican sheriff is Rep. Darrell Issa of California, who will chair the House committee in charge of government investigations.  Issa has said he's planning a barrage of hearings on everything from Medicare fraud to the government's failure to prevent the BP oil spill.

Copyright 2011 ABC News Radio


Goolsbee Warns Tea Party: Don't 'Play Chicken' With Debt Ceiling Vote

Photo Courtesy - ABC News(WASHINGTON) -- President Obama's top economic advisor, Austan Goolsbee, warned Sunday against "playing chicken" with raising the country's debt ceiling, saying it would cause "a worse financial economic crisis than anything we saw in 2008."

"This is not a game. The debt ceiling is not something to toy with," said Goolsbee, the chairman of the White House Council of Economic Advisers, in an interview with ABC’s This Week.

"If we hit the debt ceiling, that's ... essentially defaulting on our obligations, which is totally unprecedented in American history," he said. "The impact on the economy would be catastrophic."

Congress raised the debt ceiling to $14.3 trillion last February, but the federal debt is now at $13.9 trillion, meaning the ceiling will need to be raised again this spring to avoid pushing the country into default.

Some conservatives in Congress, especially new Tea Party members, have said they will vote against raising the debt limit again, saying government should drastically cut spending instead. Incoming Republican House Speaker John Boehner has said he will work to convince new members to vote to raise the limit, saying it will be "the first really big adult moment" for the new Republican majority.

Goolsbee said Obama will propose "tough choices" on tackling the nation's spending and deficit problems in his soon-to-be released budget for the next fiscal year.

After more than two years of economic turmoil, 2010 ended with glimmers of positive news for the economy. Holiday sales were up 5.5 percent over 2009, beating expectations. Stocks were also headed in the right direction, with the Dow ending the year up 11 percent and the Nasdaq almost 17 percent. But the unemployment rate has remained stuck at 9.8 percent, only slightly better than it was at this time last year.

"Coming out of the worst financial crisis of our lifetimes, it's always a messy, bumpy road to get out of that," Goolsbee said. "You're starting to see encouraging signs, I'd say.”

Copyright 2011 ABC News Radio

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