Executive Branch

U.S. Debt Reaches 100 Percent of Country's GDP

Published August 04, 2011

| FoxNews.com

The U.S. debt surpassed 100 percent of gross domestic product after the government's debt ceiling was lifted, Treasury figures showed Wednesday, according to AFP.

The debt, which had been in somewhat of a holding pattern over the past several weeks, rose $238 billion after President Obama signed the debt-ceiling deal into law Tuesday to avoid the country's first-ever default.

The package is designed to carve $2.4 trillion from the deficit over the next decade. But in the near term, it granted Washington an increase in its borrowing authority worth the same amount.

With that authority, the public debt has climbed to $14.58 trillion, putting it just over the $14.53 trillion size of the country's economy in 2010.

As the country moves into a league with deep-in-the-red nations like Italy and Belgium, fiscal conservatives say the fight to cut spending is far from over.

Senate Minority Leader Mitch McConnell warned Tuesday that Washington will have another fierce debate over spending the next time the debt ceiling is reached -- expected to be in early 2013. McConnell said Washington should welcome, not fear, that debate.

Bipartisan lawmakers are also expected to get to work soon on a joint committee formed by the newly signed debt-ceiling deal. That committee is tasked with finding about $1.5 trillion in deficit savings, to complement the $900 billion in cuts enacted by the first phase of the bill.

The last time the debt topped the size of its annual economy was in 1947 during World War II, according to AFP. But the deficit at the time was driven by war spending -- a degree of spending that ebbed once the war ended. The nation's current deficits were exacerbated by the wars in Iraq and Afghanistan, but are also driven in large part by entitlement programs that will not shrink without fundamental changes to their structure -- officials point as well to lost revenue from the recession, tax breaks and increased domestic spending as contributors to the current deficit hole.

Raising the debt ceiling came hours before Treasury would face the risk of defaulting on the country's loans.

The contentious debate on Capitol Hill rattled Wall Street for more than a week, as the Dow slid for eight straight days before finishing up 29 points Wednesday.

U.S. Senate

Debt Super Committee Faces Pressure From All Sides

By Mike Emanuel

Published August 04, 2011

| FoxNews.com

The brutal battle to pass the debt-limit compromise this week may end up looking like the easy part.

During the next two weeks, the top four leaders of Congress will select three members each for a new super committee with the huge job of identifying, by Thanksgiving, roughly $1.5 trillion in deficit reduction over 10 years. With six Democrats and six Republicans to be appointed, the group already promises to be split on shrinking the debt by tax increases or spending cuts even before its members have been named.

Senate Majority Leader Harry Reid, D-Nev., who will select three Democratic senators to serve on the committee, says members must possess a variety of traits.

“It's extremely important that I pick people who are willing to make hard choices but are not locked in," Reid told reporters.

But there will be outside pressure from lobbyists and even party elders in the upcoming negotiations, just as there were in those leading to the debt deal. House Minority Leader Nancy Pelosi, D-Calif., had her priorities during the debt debate and will have them in round two.

"We did protect the benefits, the Social Security, Medicare and Medicaid benefits. That is a priority for us,” Pelosi said at a press conference. “I know that whoever's at that table will be someone who will fight to protect those benefits."

Protecting turf is one reason why Sen. Orrin Hatch, R-Utah, is concerned about the super committee.

"I think it's going to be very difficult for six Democrats and six Republicans to arrive at solutions here, but I think they have to,” Hatch told Fox News. “Because if they don't then this automatic trigger happens."

That trigger, which commences across-the-board spending cuts if the committee fails to meet its goals, makes this different from your typical Washington blue-ribbon panel. Whatever comes out of this super committee has to pass Congress by December 23 to keep the trigger from kicking in. President Obama doesn’t have a seat at the table, but the administration won’t be afraid to weigh in.

"We are not shy about making our opinion known about the kind of seriousness that we think the members of this committee should approach the task,” White House Press Secretary Jay Carney said. “And I'm sure we'll continue to express that opinion."

There are also risks for conservatives and others strong on national security. It could be slashed by as much as $600 billion if the trigger is pulled.

"God forbid the special committee doesn't make a recommendation that's accepted by Congress,” said Sen. Joe Lieberman, I-Conn., who serves on the Homeland Security and Armed Services committees. “The president is going to have to make recommendations of cuts in spending on defense that will decimate our national security."

There will also be pressure on Democratic committee members because -- despite efforts to shield it -- at least 15 provisions of the president’s health care law would be on the chopping block if the committee fails to decide on cuts necessary to avoid the triggers.

"I think they will be mature enough that they will act in the best interests of the country and also frankly, they're not going to want to fail for their own reputations," said Sen. John McCain, R-Ariz.

Economy

Highlights of budget and debt limit pact

Published July 31, 2011

| Associated Press

President Barack Obama and top congressional leaders have reached an agreement on a plan to pair an increase in the nation's $14.3 trillion borrowing limit with spending cuts and to create a special committee to recommend bigger savings for a vote later this year. Highlights:

DEBT LIMIT

— The plan would immediately increase the debt limit by $400 billion, with Obama permitted to order another $500 billion increase this fall unless both House and Senate override him by veto-proof margins; a third installment of between $1.2 trillion and $1.5 trillion would be made available after enactment of matching levels of additional spending cuts recommended by a special joint committee of lawmakers. The full $1.5 trillion could also be available if Congress adopts and sends to the states for ratification a balanced budget amendment to the Constitution.

SPENDING CAPS

— The measure would cut more than $900 billion over 10 years from the day-to-day operations of Cabinet agencies whose budgets are passed each year by Congress. Caps such "discretionary" spending at $1.043 trillion in 2012, $7 billion below 2011 levels and $44 billion below an inflation-adjusted "baseline." But while sounding harsh, the measure represents a significant $24 billion increase over even deeper cuts sought by tea party-backed Republicans controlling the House.

After a near-freeze in 2013, discretionary spending would increase by about 2 percent a year, which is sure to spark infighting as defense hawks and backers of domestic programs wrangle over who gets the money.

It's up to the Appropriations committees to allocate the money, picking winners and losers from among programs like school aid, housing subsidies, defense, foreign aid and health research — among others — along with bureaucracies like the Environmental Protection Agency, the IRS and the Housing and Urban Development Department.

Both security and nonsecurity programs would absorb outright cuts in 2012. Defense hawks are protesting likely cuts to the Pentagon, which would have received a $17 billion, 3 percent increase under a recent House spending bill. The Pentagon is among a group of programs that together would absorb a $4 billion cut from current levels next year. Other programs in the security category include foreign aid, intelligence, homeland security and veterans' programs.

ADDITIONAL CUTS

— The plan would also create a 12-person, House-Senate committee evenly divided between the political parties, and charged with producing up to $1.5 trillion more in deficit cuts over 10 years.

This second wave of spending cuts would focus on so-called mandatory programs whose spending levels are set by formula. They include Medicare, the Medicaid health program for the poor and disabled, farm subsidies and federal retirement programs.

The committee is likely to borrow from numerous sources in producing the cuts, including Obama's fiscal commission, a group led by Vice President Joe Biden and talks involving House Speaker John Boehner and Obama himself. Options include increasing copayments for Medicare and military health care and prescription drug coverage, cuts in direct cash payments to farmers, sales of broadcast spectrum to telecommunications companies and rules restricting insurance policies that supplement Medicare.

Republicans vow the panel won't propose tax increases as called for by Obama and fellow Democrats.

If a majority of the committee agrees on a plan, it would receive a vote in both the House and the Senate. If the panel deadlocks or fails to produce at least $1.2 trillion in additional cuts, or if Congress fails to enact its recommendations, the White House budget office would impose spending cuts across much of the federal budget, including the Pentagon, domestic agency budgets and farm subsidies. Many federal benefits programs, however, would not be covered by this, including Social Security, Medicaid, and veterans' and federal retirement benefits.

OTHER

— The plan would also require both House and Senate to vote on a balanced budget amendment to the Constitution; establish "program integrity" initiatives aimed at stemming abuses in Social Security and federal health care programs; and preserve recent funding increases for Pell Grants for low-income college students by $17 billion over 2012-13, financed by curbs in student loan subsidies.

National debt by U.S. presidential terms

From Wikipedia, the free encyclopedia

Economic and political commentators have noted a pattern between changes in US national debt and US presidential terms since the mid-1970s. Commentators have noted that US national debt (as a percentage of GDP) had increased under Republican Presidents, but had decreased under Democratic Presidents.^[1] However, this pattern has only been strongly pronounced in the last three decades, and was not observed earlier, during the Post-World War II period.^[2]

[hide]

· 1 Commentary

· 2 Gross federal debt

· 3 Public debt

· 4 Federal spending, federal debt, and GDP

· 5 See also

· 6 Notes

· 7 References

· 8 External links

[edit]Commentary

Economist Mike Kimel notes that the last five Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country’s indebtedness.^[3] Economic historian J. Bradford DeLong observes a contrast not so much between Republicans and Democrats, but between Democrats and "old-style Republicans (Eisenhower and Nixon)" on one hand (decreasing debt), and "new-style Republicans" on the other (increasing debt).^[4][5] Similarly,David Stockman, director of the Office of Management and Budget under President Ronald Reagan, as op-ed contributor to the New York Times, blamed the "ideological tax-cutters" of the Reagan administration for the increase of national debt during the 1980s.^[6]Bruce Bartlett, former domestic policy adviser to President Ronald Reagan and Treasury official under President George H.W. Bush, attributes the increase in the national debt since the 1980s to the policy of "starve the beast" and an aversion for tax increases.^[7][8]

[edit]Gross federal debt

This table lists the gross U.S. federal debt^[9] as a percentage of GDP by Presidential term since World War II.^[10] The current gross federal debt as a percentage of GDP (83.4% at the end of 2009) is currently the highest it has been since the late 1940s. The debt briefly reached over 100% of GDP in the aftermath of World War II.

These figures do not include unfunded obligations. The U.S. government is committed under current law to mandatory payments for programs such as Medicare, Medicaid and Social Security. The 2009 present value of these deficits or unfunded obligations is an estimated $45.8 trillion. This is the amount that would have to be set aside such that the principal and interest would pay for the unfunded commitments through 2084. Approximately $7.7 trillion relates to Social Security, while $38.2 trillion relates to Medicare and Medicaid. Adding this to the national debt and other federal commitments brings the total obligations to nearly $62 trillion.^[11] However, these amounts are excluded from the national debt computation.

The President proposes the budget for the government to the congress, which can amend it before passing. The U. S. Constitution in Article 1, Section 7 grants exclusive right to originate revenue related bills to the House of Representatives; the President's proposals are an indication of spending desired, but it is the House which defines the spending through the final wording of the bills. Since the budget resolution is a “concurrent” congressional resolution, not an ordinary bill, it does not go to the President for his signature or veto.^[12] While this leaves substantial room for the legislature to change the deficit, congressional historian Louis Fisher observes that, "Congress rarely appropriates more than what the President requests." In the case of Nixon, who fought fiercely with Congress over the budget, he writes, "Congress was able to adhere to the President's totals while significantly altering his priorities." ^[13]

U.S. president	Party	Term years	Start debt/GDP	End debt/GDP	Increase debt ($T)	Increase debt/GDP (in percentage points)	House Control (with # if split during term)	Senate Control (with # if split during term)
Roosevelt/Truman	D	1945–1949	117.5%	93.1%	-0.01	-24.4%	79th D, 80th R	79th D, 80th R
Harry Truman	D	1949–1953	93.1%	71.4%	0.01	-21.7%	D	D
Dwight Eisenhower	R	1953–1957	71.4%	60.4%	0.01	-11.0%	83rd R, 84th D	83rd R, 84th D
Dwight Eisenhower	R	1957–1961	60.4%	55.2%	0.02	-5.2%	D	D
Kennedy/Johnson	D	1961–1965	55.2%	46.9%	0.03	-8.3%	D	D
Lyndon Johnson	D	1965–1969	46.9%	38.6%	0.04	-8.3%	D	D
Richard Nixon	R	1969–1973	38.6%	35.6%	0.10	-3.0%	D	D
Nixon/Ford	R	1973–1977	35.6%	35.8%	0.24	+0.2%	D	D
Jimmy Carter	D	1977–1981	35.8%	32.5%	0.29	-3.3%	D	D
Ronald Reagan	R	1981–1985	32.5%	43.8%	0.82	+11.3%	D	R
Ronald Reagan	R	1985–1989	43.8%	53.1%	1.05	+9.3%	D	99th R, 100th D
George H. W. Bush	R	1989–1993	53.1%	66.1%	1.48	+13.0%	D	D
Bill Clinton	D	1993–1997	66.1%	65.4%	1.02	-0.7%	103rd D, 104th R	103rd D, 104th R
Bill Clinton	D	1997–2001	65.4%	56.4%	0.40	-9.0%	R	R
George W. Bush	R	2001–2005	56.4%	63.5%	2.14	+7.1%	R	107th Split, 108 R
George W. Bush	R	2005–2009	63.5%	84.2%	3.97	+20.7%	109th R, 110th D	109th R, 110th D
Barack Obama	D	2009–	84.2%	93.2% (2010)	1.65 (2010)	+9.0% (2010)	111th D, 112th R	D

(Source: CBO Historical Budget Page and Whitehouse FY 2012 Budget - Table 7.1 Federal Debt at the End of Year PDF,Excel, Senate.gov)

Notes:

§ For net jobs changes over the corresponding periods, see: Jobs created during U.S. presidential terms.

[edit]Public debt

Gross debt and public debt are different. Public debt is the gross debt minus intra-governmental obligations (such as the money that the government owes to the two Social Security Trust Funds, the Old-Age, Survivors, and Disability Insurance program, and the Social Security Disability Insurance program).^[14]

The figure below shows the trend in public debt with the background colored by the party controlling the executive. The color of the trend line does not represent party affiliation; only the background does.

Time series of U.S. public debt overlaid with partisan affiliation of the White House. The upper graph shows the U.S. public debt in trillions of USD while the lower graph shows the U.S. public debt as a percentage of GDP. (Data are from the 2009 U.S. Budget.)

[edit]Federal spending, federal debt, and GDP

The table below shows the annual federal spending, gross federal debt, and gross domestic product for average presidential parties, specific presidential terms, and specific fiscal years.

Fiscal Year	President	Party of President	Federal Spending			Federal Debt			Gross Domestic Product			Inflation Adjustor^[16]
Fiscal Year	President	Party of President	Billions^[17]	Adjusted^[18]	Increase	Billions^[19]	Adjusted^[20]	Percentage Increase	Billions^[21]	Adjusted^[22]	Increase	Inflation Adjustor^[16]
1978-2005		Democratic			9.9%			4.2%			12.6%
1978-2005		Republican			12.1%			36.4%			10.7%


1978–1981	Carter	Democratic	$678	$1,219	17.2%	$994	$1,787	-0.4%	$3,055	$5,492	9.4%
1982–1985	Reagan	Republican	$946	$1,396	14.5%	$1,817	$2,680	49.0%	$4,142	$6,108	11.2%
1986–1989	Reagan	Republican	$1,144	$1,499	7.4%	$2,867	$3,757	40.2%	$5,401	$7,077	15.9%
1990–1993	Bush	Republican	$1,410	$1,615	7.8%	$4,351	$4,987	32.7%	$6,576	$7,536	6.5%
1994–1997	Clinton	Democratic	$1,601	$1,684	4.3%	$5,369	$5,647	13.2%	$8,182	$8,606	14.2%
1998–2001	Clinton	Democratic	$1,863	$1,821	8.1%	$5,769	$5,638	-0.2%	$10,058	$9,829	14.2%
2002–2005	Bush	Republican	$2,472	$2,165	18.9%	$7,905	$6,923	22.8%	$12,238	$10,717	9.0%
2006-2009*	Bush	Republican	$3,107	$2,452	13.3%	$10,413	$8,218	18.7%	$15,027	$11,859	10.7%


1977	Ford	Republican	$409	$1,040		$706	$1,795		$1,974	$5,019		0.39
1978	Carter	Democratic	$459	$1,093	5.1%	$776	$1,850	3.1%	$2,217	$5,285	5.3%	0.42
1979	Carter	Democratic	$504	$1,107	1.3%	$829	$1,821	-1.5%	$2,501	$5,494	4.0%	0.46
1980	Carter	Democratic	$591	$1,175	6.1%	$909	$1,808	-0.8%	$2,727	$5,422	-1.3%	0.50
1981	Carter	Democratic	$678	$1,219	3.8%	$994	$1,787	-1.1%	$3,055	$5,492	1.3%	0.56
1982	Reagan	Republican	$746	$1,252	2.6%	$1,137	$1,908	6.8%	$3,228	$5,417	-1.4%	0.60
1983	Reagan	Republican	$808	$1,294	3.4%	$1,371	$2,195	15.0%	$3,441	$5,510	1.7%	0.62
1984	Reagan	Republican	$852	$1,300	0.4%	$1,564	$2,386	8.7%	$3,840	$5,858	6.3%	0.66
1985	Reagan	Republican	$946	$1,396	7.4%	$1,817	$2,680	12.3%	$4,142	$6,108	4.3%	0.68
1986	Reagan	Republican	$990	$1,426	2.1%	$2,120	$3,052	13.9%	$4,412	$6,352	4.0%	0.69
1987	Reagan	Republican	$1,004	$1,406	-1.4%	$2,345	$3,283	7.6%	$4,647	$6,506	2.4%	0.71
1988	Reagan	Republican	$1,065	$1,447	2.9%	$2,601	$3,534	7.7%	$5,009	$6,806	4.6%	0.74
1989	Reagan	Republican	$1,144	$1,499	3.6%	$2,867	$3,757	6.3%	$5,401	$7,077	4.0%	0.76
1990	Bush	Republican	$1,253	$1,590	6.1%	$3,206	$4,067	8.3%	$5,735	$7,277	2.8%	0.79
1991	Bush	Republican	$1,324	$1,610	1.3%	$3,598	$4,374	7.5%	$5,935	$7,215	-0.8%	0.82
1992	Bush	Republican	$1,382	$1,624	0.9%	$4,001	$4,703	7.5%	$6,240	$7,334	1.7%	0.85
1993	Bush	Republican	$1,410	$1,615	-0.5%	$4,351	$4,987	6.0%	$6,576	$7,536	2.8%	0.87
1994	Clinton	Democratic	$1,462	$1,642	1.7%	$4,643	$5,216	4.6%	$6,961	$7,820	3.8%	0.89
1995	Clinton	Democratic	$1,516	$1,662	1.2%	$4,920	$5,395	3.4%	$7,326	$8,033	2.7%	0.91
1996	Clinton	Democratic	$1,561	$1,673	0.7%	$5,181	$5,554	3.0%	$7,694	$8,248	2.7%	0.93
1997	Clinton	Democratic	$1,601	$1,684	0.7%	$5,369	$5,647	1.7%	$8,182	$8,606	4.3%	0.95
1998	Clinton	Democratic	$1,653	$1,721	2.2%	$5,478	$5,704	1.0%	$8,628	$8,985	4.4%	0.96
1999	Clinton	Democratic	$1,702	$1,746	1.5%	$5,605	$5,750	0.8%	$9,125	$9,361	4.2%	0.97
2000	Clinton	Democratic	$1,789	$1,789	2.5%	$5,628	$5,628	-2.1%	$9,710	$9,710	3.7%	1.00
2001	Clinton	Democratic	$1,863	$1,821	1.8%	$5,769	$5,638	0.2%	$10,058	$9,829	1.2%	1.02
2002	Bush	Republican	$2,011	$1,929	6.0%	$6,198	$5,945	5.5%	$10,377	$9,954	1.3%	1.04
2003	Bush	Republican	$2,160	$2,018	4.6%	$6,760	$6,316	6.2%	$10,809	$10,099	1.4%	1.07
2004	Bush	Republican	$2,293	$2,082	3.2%	$7,354	$6,677	5.7%	$11,500	$10,441	3.4%	1.10
2005	Bush	Republican	$2,472	$2,165	4.0%	$7,905	$6,923	3.7%	$12,238	$10,717	2.6%	1.14
2006	Bush	Republican	$2,655	$2,249	3.9%	$8,451	$7,158	3.4%	$13,016	$11,024	2.9%	1.18
2007	Bush	Republican	$2,730	$2,263	0.6%	$8,951	$7,419	3.6%	$13,668	$11,329	2.8%	1.21
2008*	Bush	Republican	$2,931	$2,366	4.6%	$9,654	$7,793	5.0%	$14,312	$11,553	0%	1.24
2009	Bush	Republican	$3,107	$2,452	3.6%	$10,413	$8,218	5.5%	$14,097	$11,529	2.6%	1.27
2010*	Obama	Democratic	$3,991	$2,392	1.4%	$11,875	$9,247	12.5%	$14,508	$11,297	-2.0%	1.29

Notes

The government fiscal year runs from October 1 (of the previous calendar year) to September 30. Budgets are enacted before the November general elections. This is why FY2001 falls under Clinton and FY2009 falls under G.W. Bush, they started in October 1, 2000 and October 1, 2008, respectively.
The dollar amounts for each presidential term are taken from the last fiscal year in that term.
The increase in each presidential term is the increase in the adjusted amount from the last fiscal year of the previous term to the last fiscal year of the current term.
The value for each presidential party is the average of the values for all the presidents in that party.
The values for the years 2008, 2009, and 2010 represent estimates from the source material.

ZA&dunia

Jumat, 05 Agustus 2011