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Debt to hit $16T in time to crash Democratic convention
CHARLOTTE, N.C. — Just as Democrats are gaveling in their convention Tuesday, the federal government likely will announce another dubious milestone — $16 trillion in total federal debt.
In an election already focused on domestic issues of jobs, spending and deficits, the $16 trillion number is likely to underscore just how much is at stake in November for both parties, which are offering dramatically different ways to begin to eat away at the deep hole.
Gross federal debt has been flirting with $16 trillion for the past two weeks, and the government ended Thursday $15.991 trillion in debt.
With several debt auctions scheduled for the end of last week, budget analysts think the government probably broached the $16 trillion number on Friday, and it will be reported to the public Tuesday, which, thanks to the Labor Day holiday, is the next business day.
While $16 trillion isn’t a tipping point, it is a stark number that Republicans said will reflect poorly on Mr. Obama, who has overseen the biggest debt explosion in the country’s history.
“This is a grim landmark for the United States,” said Sen. Jeff Sessions of Alabama, the ranking Republican on the Senate Budget Committee. “Yet the president seems strangely unconcerned.”
The Obama campaign didn’t respond to a message seeking comment on the milestone, but, speaking on “Fox News Sunday,”David Axelrod, a top adviser to Mr. Obama, said the president has a “plausible plan” to stabilize the debt, but acknowledged the plan doesn’t actually begin to reduce it.
“You can’t balance the budget in the short term because to do that would be to ratchet down the economy,” he said.
That underscores both sides’ dilemma: Republicans object to tax increases, saying they will stunt a recovery, while Democrats say reducing spending would likewise hurt.
The Congressional Budget Office last month said raising taxes or cutting spending, or both, might indeed send the economy into a recession, though the alternative — putting off fiscal tightening — means things are worse in the long term.
Republicans believe the debt can be used against Mr. Obama. At their convention last week in Tampa, Fla., they posted a giant electronic board that steadily ticked off the debt they said accumulated every moment from the time they gaveled into session Monday afternoon until they ended the convention late Thursday.
But debt jumps — and occasionally falls — in much more sporadic fashion, as bonds are regularly being auctioned off and sold back.
The biggest one-day boost in history came on Aug. 2, 2011, just after Congress and the president agreed to raise the debt limit, unleashing months of pent-up borrowing.
Gross debt stood at $4.188 trillion when Mr. Clinton took office in 1993 and grew to $5.728 trillion when he turned the White House over to Mr. Bush, who added $4.899 trillion in his eight years in office, to reach $10.627 trillion on Jan. 20, 2009, when Mr. Obama took over. The country has already notched another $5.364 trillion during his term.
Of the total public debt, about 30 percent is intragovernmental holdings such as money borrowed from Social Security’s trust fund. The debt held by the public, which many economists say is the best measure of the country’s true burden, accounts for the rest, standing at $11.214 trillion in the latest Treasury figures last week.
Last week, the Republican vice presidential nominee, Rep. Paul Ryan, used his acceptance speech to needle Mr. Obama for failing to heed the recommendations of the Bowles-Simpson commission, which proposed ways to reduce trillions of dollars of debt.
“How did the president respond? By doing nothing — nothing except to dodge and demagogue the issue. So here we are, $16 trillion in debt, and still he does nothing,” Mr. Ryan said.
However, Mr. Ryan himself served on the commission and voted against the final plan, helping scuttle it. The final report won 11 votes from among the 18 members — three shy of the 14 votes needed to issue a favorable recommendation.
Top Democrats, who controlled both chambers of Congress at the time, promised to bring their report to the floor if it had won the 14 votes.
Mr. Ryan and two other House Republicans voted against the deal, as did one Senate Democrat, two House Democrats and a key labor union ally of Mr. Obama’s. Together, they ensured the deal’s doom.
Mr. Axelrod said it was disingenuous of Mr. Ryan to complain about a report he opposed. But Mr. Axelrod also said Mr. Obama didn’t ignore the Bowles-Simpson report, but rather modeled his own budget plans on it.
“Paul Ryan stood on that platform and he looked up at that deficit, at that debt clock, and he made no mention of the fact that he voted for every single one of the policies in the last decade that are at the root of the explosion of the debt — two unpaid wars and unpaid tax cuts and unpaid Medicare prescription drug program,” Mr. Axelrod said. “They have no standing to talk about deficits and their plans today would explode them in the future.”
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
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