Debate over raising the debt ceiling continues and August 2nd, the day the US will reach its credit limit, is days away. If we don’t take action, the federal government simply won’t have enough money to meet all of its obligations. I have included a list of our obligations just for the month of August at the end of this correspondence.
It is important to keep in mind that the US had a balanced budget from 1998 to 2001. Those were the first balanced budgets in a generation. We accomplished it through a combination of thoughtful taxation and spending policies.
The first steps on the path toward the deficit were taken when the Bush tax cuts passed in May of 2001. Those tax cuts were implemented without any corresponding spending cuts. I voted no.
After the 9/11 attack, Congress voted to authorize war against those responsible. It had become clear that the terrorists were in Afghanistan, that its Taliban government would continue to protect them, and military force was necessary. We took more steps on the deficit path by financing the war with a credit card, the first time in history that the US went to war without a tax increase to support the enormous cost.
I voted to send our military into Afghanistan in 2001 and thought it was an effort worthy of our tax dollars. However, since 2009 I have been calling for withdrawal because our goals in Afghanistan have been accomplished.
In 2003, America invaded Iraq. I voted against this war. And, again, Congress did not increase taxes to pay for it. Now we had two wars on our credit card.
Worse, in budgetary terms, in 2002 Congress repealed the “pay-go” rule. That one rule forced Congress and the President to pay for every budget addition with either offsetting cuts to other items or increasing revenue. I was one of only 19 Members who voted to keep that rule in place.
The first steps on the path toward the deficit were taken when the Bush tax cuts passed in May of 2001. Those tax cuts were implemented without any corresponding spending cuts. I voted no.
In 2008, the financial crisis enveloped the US and the world economy came close to the edge. This crisis required us to stabilize our own economy. I voted to take positive action and jump start job creation.
So here we are in 2011, days away from reaching the debt ceiling and risking the full faith and credit of the United States. A series of bad policy actions and a worldwide economic collapse have brought us to this moment.
As you think about the answer to this question, I wanted to pass along some information. This month the Bipartisan Policy Center prepared a list of bills that will be due and payable by the federal government between August 3rd and August 31st. The list totals $306.7 billion. During that same time period, the Center reports that the federal government will bring in $172.4 billion which means there will be a shortfall of $134.3 billion. That is why we must extend the debt limit. I am including a link to their report and other related materials if you are interested.
I recognize that some believe it is easy to get from where we are now to a balanced budget. As an educational exercise I have simplified the Bipartisan Policy Center’s list of payments and sorted them from the most expensive to the least expensive obligations. Which obligations would YOU not pay in August? What would YOU reduce permanently to bring us into balance? Would you raise taxes so we don’t have to cut any spending? Or would you do some cutting and some revenue raising for a more balanced approach?
I think that once you review this list you will quickly realize that the ONLY responsible answer is a BALANCED approach – some thoughtful spending cuts, some thoughtful revenue increases and smarter long term policies as we move forward. This is what I have been fighting for in Washington and will continue to fight for as this debate goes on.
| Payments due August 3 – 31, 2011 | $306,700,000,000 | Running Total |
| Medicare & Medicaid payments due | $50,000,000,000 | $50,000,000,000 |
| Social Security Benefits due recipients | $49,200,000,000 | $99,200,000,000 |
| Defense Dept – Vendor Payments (e.g. – food, materials) | $31,700,000,000 | $130,900,000,000 |
| Interest on Treasury Securities (not paying this is “default”) | $29,000,000,000 | $159,900,000,000 |
| Federal Employee Salaries & Benefits – all non-military agencies | $14,200,000,000 | $174,100,000,000 |
| Unemployment Insurance Benefits | $12,800,000,000 | $186,900,000,000 |
| Dept of Education – Pell Grants | $10,400,000,000 | $197,300,000,000 |
| Health & Human Services Grants | $8,100,000,000 | $205,400,000,000 |
| Food & Nutrition Services (e.g. – food stamps, WIC) | $6,700,000,000 | $212,100,000,000 |
| Dept of Education – other programs | $6,200,000,000 | $218,300,000,000 |
| Transportation – Federal Highway Admin | $4,300,000,000 | $222,600,000,000 |
| Housing & Urban Development – Rental Assistance | $3,900,000,000 | $226,500,000,000 |
| IRS Refunds | $3,900,000,000 | $230,400,000,000 |
| Dept of Education – Special Education Grants to states | $3,600,000,000 | $234,000,000,000 |
| Dept of Energy (e.g. – energy research) | $3,500,000,000 | $237,500,000,000 |
| Defense Dept – Military Active Duty Pay | $2,900,000,000 | $240,400,000,000 |
| Veterans Affairs Programs | $2,900,000,000 | $243,300,000,000 |
| Temporary Assistance for Needy Families | $2,600,000,000 | $245,900,000,000 |
| Housing & Urban Development – other programs | $1,900,000,000 | $247,800,000,000 |
| Dept of Justice programs (e.g. – FBI, Federal Courts) | $1,400,000,000 | $249,200,000,000 |
| Dept of Labor programs (e.g. – job training services) | $1,300,000,000 | $250,500,000,000 |
| Transportation – Federal Transit Admin | $1,300,000,000 | $251,800,000,000 |
| Dept of Interior | $1,200,000,000 | $253,000,000,000 |
| Environmental Protection Agency | $900,000,000 | $253,900,000,000 |
| Housing & Urban Development – Public Housing | $900,000,000 | $254,800,000,000 |
| Center for Disease Control | $500,000,000 | $255,300,000,000 |
| Small Business Admin | $300,000,000 | $255,600,000,000 |
| All Other Federal Spending | $51,100,000,000 | $306,700,000,000 |
As debate over raising the debt ceiling continues, I wanted to pass along the above post, which I shared with my E-Update Subscribers. If you would like to subscribe you can sign up on my website http://www.house.gov/capuano/e-updates/subscribe.shtml
This is what you get when they guy who passed out checks from lobbyists on the floor of the House battles with the followers of Jack Abramoff’s money launderer.
There is no reason to concede that we have to cut spending. In the short term, there is no reason to cut spending. None. Nein. Zip. Nada.
The only conceivable reason to cut spending is to meet the GOP demands. They won the house. They have leverage. But, it is irresponsible to adopt political necessity as policy preference.
I say keep cutting those checks like credit-worthy parties do. I’m more and more convinced that the 14th Amendment not only allows, but requires this action.
If the money’s not there, essentially, the checks would bounce. What then?
And if Treasury tries to issue debt that is in excess of the ceiling, what then? Would anyone buy it? Would buyers demand a premium, thereby effectively raising interest rates? Would the House try to impeach the president? This 14th Amendment thing is a loser all around, IMHO.
The Treasury issues debt. It’s true, it might be at a higher premium… but if the alternative is to default, then hell, its the less worse option. Let the House impeach POTUS… I think it would be GREAT for Obama. He points out that the Teabaggers held us hostage and that Obama helped us through, though at some cost, because after all America pays her debts.
I think the optics are great. Obama bent over backwards to get this done, the GOP was petulant, and so Obama had to get creative to keep things afloat. Then, the GOP was so angry that their plan to sabotage the economy for their own electoral gain failed that they impeached Obama, because that (and a BJ) are way more important than jobs jobs jobs. I think not only would Obama win reelection, but that the Dems would take 50 seats in the House too, and maybe even gain in the Senate. Then, blow up the filibuster and we’re in business.
Ah, a man can dream.
It might also be worthless. Not sure I’d want that case to end up at One Supreme Court Way.
This is the kind of baby-boomer everything I did was right attitude that is so nauseating. Everything you do is defensible if you build the right logical construct.
I encourage you most strongly to vote against the terrible “deal” that is now on the table. It fails on its merits and, worse, it rewards the terrorism practiced by the increasingly extreme right wing.
Please vote “No”. Scuttle this “deal”. This is precisely the wrong time for ANY austerity measures. If we move ahead, we will repeat the failures of 1937.
The right thing to do is:
(a) Raise the debt ceiling
(b) End the expensive wars
(c) Restore taxes on the truly wealthy
(d) Grow the economy