The U.S. federal government’s total public debt outstanding reached over $19.4 trillion at the end of day on Tuesday, a new all-time high according to the Treasury Department.
For more than seven months in 2015, from March 16 until the Bipartisan Budget Act of 2015 was signed by President Obama on Nov. 2, Treasury was forced to take “extraordinary measures” in order to keep the national debt below the legal limit, according to federal law. When Congress passed the Budget Act on Oct. 30, total debt stood at $18.152 trillion.
“Extraordinary measures” include, 1) removing state and local treasury notes from the “buy” market; 2) withdrawing from the Civil Service Retirement Disability Fund and Postal Service Retirees Health Benefit Fund; 3) halting Government Securities Investment Fund and Exchange Stabilization Fund money from being reinvested.
Title IX of the Act suspended the public debt limit from being enforced until March 16, 2017, when “the limit (will be) increased to accommodate obligations issued during the suspension period.”
While the latest finding published in the CIA’s World Factbook shows U.S. public debt-GDP ratio well below the 100 percent threshold — 73.6 percent as of 2015 — with the debt limit set to go back into effect, the Congressional Budget Office (CBO) projects the ratio will increase to 86 percent in the next decade.
CBO’s projection could be dramatically effected by the outcome of the 2016 presidential election, however, as a report released by the non-partisan Committee for a Responsible Federal Budget (CRFB) in late-June shows Donald Trump’s fiscal policy proposals would increase public debt by $11.25 trillion more than Hillary Clinton’s budget outline.
The bulk of the increase in government obligations results from the Republican nominee’s favored tax cuts, which would cost $9.25 trillion, while Clinton’s proposed tax increases save $1.25 trillion.
While the former Secretary of State proposes to spend more on social programs such as those related to health care, Trump’s total spending package would also increase the government’s net interest payments by $1.65 trillion more than Clinton.
“Rising debt would ultimately slow wage growth, raise interest rates, leave the country less equipped to deal with a national crisis, and set the stage for abrupt and painful adjustments in the future,” CRFB’s report read.
[CNS News] [The Hill] [Photo courtesy Fiscal Times]