Here's a story from Wednesday that most of the press did not pick up on:
Lawmakers returned Tuesday from a two-week spring holiday and got a warning from the Treasury Department that the government faces the prospect of not being able to pay its bills in late May unless Congress raises the government's borrowing authority, now capped at $6.4 trillion.Under House procedures recently reinstated by Republicans, final congressional approval of a compromise budget this month automatically sent a bill to the Senate raising the borrowing ceiling to $7.38 trillion. The Senate, however, has yet to vote on raising the ceiling.
"We've been working with Congress and the leaders and we are hopeful and expect that we'll see the debt ceiling increased," Peter Fisher, treasury undersecretary for domestic finance, said Wednesday.
Last year, Congress boosted the old debt limit by $450 billion, from $5.95 trillion to the current $6.4 trillion.
The Treasury Department's debt managers have taken a number of steps since February to prevent the government from defaulting on the national debt. But absent a boost in the government's borrowing authority by Congress, the debt ceiling will be breached "sometime in the latter part of May," Fisher said.
Here is perhaps the most damaging evidence from the Kansas City Star:
Take, for instance, what's been happening with the national debt numbers, which run daily in the business section's "government finances" table in the financial agate (Page C-7). Anyone concerned about federal fiscal fortunes will find them as interesting as any sports box score.For the past several weeks, the table has usually shown the outstanding federal debt as follows: $6,399,975,000,000. This is six trillion, three-hundred-ninety-nine billion, nine-hundred-seventy-five million.
This number hasn't changed much, if at all, even though the Treasury has in the meantime reported budget deficits totaling $155 billion for February and March. What's curious is why the national debt wouldn't have registered a similar increase instead of remaining basically unchanged.
Well, this is where the farcical accounting gimmickry comes in. What Uncle Sam is doing makes his corporate counterparts look like pikers. They just finagle a few billion bucks here and there. In Washington the machinations run to the hundreds of billions.
The federal fiscal chicanery was dictated after the Treasury began to bump up against the legal debt ceiling of $6.4 trillion in February. Bipartisan wrangling over how much to boost the legal debt limit combined with distractions from the Iraqi invasion have delayed legislating the needed increase.
This has put the Treasury in the awkward position of having to pay Uncle Sam's bills without adding to the national debt in any way that might be recognized on the nation's official ledgers. How this is being done is likely a very complicated game of masking what's really happening by shifting the government trust fund numbers to and fro. The result is a national debt total that has stayed stuck at a whisker under the $6.4 trillion ceiling despite substantial budget deficits.
How convenient.
All this despite that fact that the Treasury Department's own web site clearly shows the national debt is at $6.46 trillion, about $60 billion over the debt ceiling. In fact, it shows the government has been over the ceiling since December 31, 2002. At the same time, Bush's Secretary of Treasury, John W. Snow, is doing his best to add even more to the national debt:
U.S. Treasury Secretary John Snow said Thursday that the House proposal for tax cuts would be a step in the right direction, but he suggested that the White House's plan for bigger cuts would be preferable."It's a step in the right direction. We'd like to see it go further. But it's a big step in the right direction," Snow said.
The White House has been pressing for an end to double taxation on share dividends as one of its key tax cut proposals to stimulate the economy. Overall, the Bush administration has called for tax cuts over the next 10 years totaling $726 billion, while the House is pressing for cuts up to $550 billion, and the Senate is calling for cuts to be capped at $350 billion.
I've said this before elsewhere, but if you thought the four trillion dollars that Reagan added to the national debt were a lot, just wait and see what happens if Bush wins a second term! Can you say trillion dollar annual interest payments?