Tales from the Trail

Think the U.S. deficit is bad? Check out the interest payments

US TREASURY PAULSONFor those who are worried about the $1.75 trillion deficit that President Barack Obama projected the government would run in fiscal 2009, wait until you see what the interest on the growing U.S. debt will be.

The U.S. debt is roughly $10.6 trillion and the government spent $253 billion servicing it last year. With the mounting yearly deficits, that cost is skyrocketing.

During the debate over the $787 billion economic stimulus plan aimed at pulling the U.S. economy out of its downward spiral, Republicans argued that the cost was really over $1.1 trillion because of the cost to service the additional debt.

Lest folks think that current low borrowing costs would make the burden a little lighter, Obama’s fiscal 2010 budget projected that during his upcoming four years in office the cost will run roughly $1 trillion.

How does spending $447 billion just in interest payments on the debt in 2013 sound? And $694 billion in 2019 alone? If you want to see those shocking figures in black and white, see page 117 of Obama’s budget. It’s worse than opening your monthly credit card bill and looking at the finance charges on the unpaid balance.

No small differences over Obama’s treatment of small business

U.S. budgets can really bring out the passion in people. So much so that it’s no wonder it’s hard for anyone to agree on how Washington should tax and spend.

OBAMA/BUDGETWhen it was released on Thursday, the budget President Barack Obama unveiled sparked a war of words all over the capital. The disagreements were so profound, it’s almost as if people were looking at two entirely different documents.

Take the impact of Obama’s budget on small businesses which, like many in the United States, are reeling from the deep economic recession.

$787 billion can’t buy an ounce of bipartisanship

WASHINGTON – Republicans in the U.S. House of Representatives were unapologetic on Friday after not a single one of them voted for the $787 billion economic stimulus package.
 
The Democratic majority pushed the spending and tax cuts measure through the House 246-183 at the urging of Democratic President Barack Obama, who had courted Republican support.
 
Republican leaders insisted the plan may do more harm than good by expanding government and not doing enough to creboehnerate private-sector jobs.
 
Representative Virginia Foxx went further. “I think it’s a cruel hoax on the American people that they have been led to believe that by passing this bill that there are suddenly going to be millions of jobs out there, particularly for blue collar workers that have lost their jobs,” she said.
 
Through weeks of debate, the two parties stuck to their ideologies, with Republicans favoring tax cuts and Democrats leaning toward government spending.
 
Republicans may be hoping their lock-step opposition will help vault them back into majority status in the House. They look longingly back to 1993, when every House Republican voted against a balanced-budget plan by then-President Bill Clinton that accomplished its goal.
 
Nonetheless, Republicans took control of the House in 1994 elections.
 
Asked whether Republicans risked looking bad if the U.S. economy does recover in the near term, House Republican Leader John Boehner said: “I think standing on principle and doing the right things for the right reasons on behalf of your constituents will never get you in trouble.”

For more Reuters political news, click here.

Photo credit: Reuters/Larry Downing (Boehner holds a copy of the stimulus bill, following the passage in the House of Representatives of the stimulus package)

from Ask...:

Withdraw or stand their ground?

Tom Daschle doesn’t want to be a distraction. Nancy Killefer doesn’t want to be a distraction. Timothy Geithner has already been a distraction.

What these three high-profile nominees to President Obama’s White House have in common, besides not wanting to be distractions, is that they apparently don’t know how to do their taxes. Daschle, the former senator and Obama’s choice for health secretary, and Killefer, a former assistant Treasury secretary and nominee to oversee the government’s budget, have withdrawn their nominations because of tax indiscretions. Geithner has been confirmed but his path to the top of Treasury was also marred by tax troubles that some fear may come back to haunt him.

Besides begging the question why do smart people not know how to do their taxes, it also throws a shadow over Obama’s quest to have a fast, smooth transition to power.