US to raid federal pension fund now that federal debt limit has been reached.

[eek.]

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<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-comffice:smarttags" /><st1:country-region w:st="on"><st1lace w:st="on">US</st1lace></st1:country-region> President George Bush's administration has weathered a pre-election mauling by announcing emergency measures to skirt a $7.38-trillion debt limit.​

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Treasury Secretary John Snow said he would use pension money to keep the government running. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-comfficeffice" /><o></o>​

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In a letter to US Senate majority leader Bill Frist on Thursday, Snow said he was immediately suspending payments to a federal employees' retirement scheme, the Government Securities Investment Fund (G-Fund). <o></o>​

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The missing money would be repaid in full later, with no net effect on the fund or retirees, he promised. <o></o>​

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The treasury secretary said he was forced to take the emergency accounting step because congress had not acted on his 2 August request for the government's legal debt limit to be raised. <o></o>​

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Any move by congress to raise the debt limit could be politically embarrassing. ​

Democrats pounced on the news as evidence of fiscal mismanagement by the administration, less than three weeks before Bush faces Democratic challenger Senator John Kerry in the 2 November presidential election.​

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"George Bush continues to make history for all the wrong reasons: He's the first president to go without creating a new job since the Great Depression and now he's run up more debt in [a] shorter period of time than all the presidents combined in the 200 years from <st1:State w:st="on"><st1lace w:st="on">Washington</st1lace></st1:State> through Reagan," said Kerry campaign spokesman Phil Singer. <o></o>​

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"On top of that, this is the third time he's broken his promise not to raise the debt ceiling. His fiscal mismanagement is taking its toll on <st1lace w:st="on"><st1:country-region w:st="on">America</st1:country-region></st1lace> and it's time for a fresh start," he said in a statement. ​

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Failure<o></o>​

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House Democratic leader Nancy Pelosi described Snow's manoeuvre as "a shameful admission" that the administration's economic policies had failed the American people. ​

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The overall <st1lace w:st="on"><st1:country-region w:st="on">US</st1:country-region></st1lace> debt - the total accumulated financial liabilities of the country - now amounted to $7.38 trillion, she said. <o></o>​

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"The Republican leadership knew that the debt limit would be reached this month but did not want an embarrassing vote on raising the debt ceiling until after next month's election so Republicans are now resorting to extraordinary accounting measures to avoid that vote." <o></o>​

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In the year before Bush came to office, his predecessor Bill Clinton produced a $236-billion annual budget surplus. <o></o>​

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In fiscal 2004, ended 30 September, Bush's team is estimated to have incurred a record annual budget deficit of $415 billion, according to the bipartisan congressional budget office. <o></o>​

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The official 2004 budget figures, showing the gap between annual government spending and income, are due this week. <o></o>​

 

[bblight]

eek - I'm just curious - I wonder why a foreigner- especially a European - is so interested in the politics of the United States?

It seems to me that the European economy and its aging population is on the brink of an upheaval, as more and more people retire, and the economy becomes less able to support the lucrative benefits offered to workers and retirees - yet here you are, as a sideline participant in the political process of an economy and society that have very few problems (although we do have some vitriolic debates on social issues.)

So why your interest?

 

[eek.]

'Cos I find it interesting.

You guys are borrowing so much you make the Italian socialist party look thrifty.

It looks like Bush is devaluing the dollar, which means the oil price will just keep going up and up and up

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U.S. Hits Debt Limit After Senators Put Off Raising Ceiling<!--plsfield:stop-->
Leaders Promise Action After Election; Snow Withholds Contributions to Federal Pension Plan



<!--plsfield:byline-->By Jonathan Weisman
<!--plsfield:credit-->Washington Post Staff Writer
<!--plsfield:disp_date-->Friday, October 15, 2004; Page A14


<!--plsfield:description--><NITF>The federal government reached its $7.4 trillion debt ceiling yesterday, forcing Treasury Secretary John W. Snow to delay contributing to one of the federal employees' pension systems to avoid running out of cash and possibly defaulting on government debt.</NITF>

<NITF>The situation will probably be temporary, as it has in the past. Congressional leaders said that when they return for a lame-duck session after the election, they will raise the debt ceiling to allow the government to borrow the money it needs to pay its bills. At that point, any overdue contributions to the pension fund would be paid, with interest.</NITF>


Snow has pleaded with Congress since Aug. 2 to raise the debt limit, but Senate Republican leaders -- whose aides said they were worried about the possible political backlash -- adjourned for the campaign this week without acting on Snow's request. The Treasury secretary repeated his plea yesterday in a letter to Senate Majority Leader Bill Frist (R-Tenn.), appealing to his "commitment to maintaining the full faith and credit of the U.S. government."</NITF>

<NITF>"Given the current projections, it is imperative that the Congress take action to increase the debt limit by mid-November, at which time all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted," Snow wrote.</NITF>

<NITF>Congressional leaders in turn promised to raise the borrowing limit as soon as they reconvene. The House passed a $690 billion increase in the debt ceiling in a 2005 budget resolution, but it was never adopted by the Senate.</NITF>

<NITF>"Typically with Congress, they do it when they need to do it," said John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.). "And we'll do it when we need to do it."</NITF>

<NITF>The federal government regularly sells Treasury bonds to finance the difference between the amount of money it collects in taxes each year and the amount it spends. The debt ceiling was first imposed in 1917 to act as a brake on the total amount of accumulated debt the government owes. Today the total debt includes money owed either to private investors or, in the case of funds borrowed from surplus Social Security taxes, to other government programs.</NITF>

<NITF>Since then, the Treasury has on five occasions delayed pension fund payments as it approached its limit on borrowing. Three of those incidents came under President Bush -- in 2002, 2003 and yesterday -- as Republicans in Congress have become leery of voting to raise the debt limit. The others were during the rapidly spiraling deficits of 1985 and the budget showdown between the new Republican Congress and President Bill Clinton in 1995.</NITF>

<NITF>When Bush came to office, the debt ceiling was $5.95 trillion and had last been raised in 1997.</NITF>

<NITF>Since 2002, Congress has raised the borrowing limit by more than $1.4 trillion, as the government ran increasingly large deficits of $158 billion in 2002, $375 billion in 2003 and $413 billion for fiscal 2004, which ended in September. Yesterday the Treasury Department released its final 2004 deficit figure, which came in below initial forecasts but still at a record level in dollar terms.</NITF>

<NITF>If Republicans had hoped to avoid the issue before the election, Democrats sought yesterday to make them pay with a litany of accusations.</NITF>

<NITF>"This is a heck of a burden to pass on to the next generation," said Rep. John M. Spratt Jr. (S.C.), the ranking Democrat on the House Budget Committee.</NITF>

<NITF>Campaign aides of Democratic presidential nominee Sen. John F. Kerry (D-Mass.) noted that Bush's 2001 budget anticipated the debt ceiling would not have to be raised until 2008. And, they said, , the government has run up more debt in the past 17 months than was amassed under all the presidents from George Washington to Ronald Reagan.</NITF>

<NITF>"George Bush continues to make history for all the wrong reasons," said Kerry campaign spokesman Phil Singer.</NITF>

<NITF>Budget watchdog organizations took both Kerry and Bush to task for what they see as a failure to take the deficit seriously. </NITF>

<NITF>"Following the presidential debate, where more attention was given to the candidates' wives than to the budget deficit . . . it is hard to see where the leadership to put the country back on the path of fiscal responsibility will come from," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.</NITF>

<NITF>A number of independent analyses have concluded that the mix of tax cuts and spending plans outlined by both candidates would balloon the budget deficit.</NITF>

http://www.washingtonpost.com/wp-dyn/articles/A32985-2004Oct14.html?nav=rss_topnews

 

[cussin'it]

<!--StartFragment --> Speaker: Bush, George - President

Date: 2/2/2004

Quote/Claim:
"The reason we are where we are, in terms of the deficit, is because we went through a recession, we were attacked, and we're fighting a war." [Source: White House Web site]

Fact:
All told, tax cuts account for 35% of the $9.3 trillion deterioration in the budget outlook since Bush took office - the largest single factor contributing to the deficit. The tax cuts cost more than even the post-9/11 defense and homeland security spending increases. That is almost $3.3 trillion in deficits over the next 10 years due to tax cuts. - CBPP 8/26/03

 

[RobFunk]

this is very very serious. we need a new president who will raise taxes or do whatever it takes to restore order. i dont care if kerry is president and the republicans get back in four years im fine with that. but bush and cheney arent very smart people and it is crippling the nation. i know you guys want to back them to stay pro-rebup as if youre rooting for your favorite team in sports, but it is a little more serious than that to the rest of us.

 

[RobFunk]

"The reason we are where we are, in terms of the deficit, is because we went through a recession, we were attacked, and we're fighting a war."

we didnt go into a recession after oklahoma city, this administration doesnt know what theyre doing. end of story. and yes I can compare it, it took exactly 2 guys to do that in oklahoma, you dont see us with a bunch of tanks trying to kill every scragaly red neck we see back then.

 

[RobFunk]

eek - I'm just curious - I wonder why a foreigner- especially a European - is so interested in the politics of the United States?

BB, these guys talk about us in their papers all the time we are a laughing stock to them with this administration. i suppose it is payback for the whole prince charles deal in the 80's. were very easy to pick on with guys like bush and cheney at the helm and so they are taking full advantage. you reap what you sew, and we started it first. theyre having their fun BB.

 

[cussin'it]

RobF,

We don't need to increase taxes, just rollback the Shrub tax cuts for the wealthiest. Never before in this country have the top brackets got a tax cut during war!!! Never.
The age old notion that has held true from the beginning: "You (the wealthy) supply the cash, we'll (the middle and lower class) supply the blood for your war" has been totally upturned by these jackals.

They want the average Joe and our family's to NOT ONLY SUPPLY THE BLOOD FOR BUT ALSO PAY FOR THIS FVCKING WAR.
What a bunch of crafty thieves. Did you know that the top bracket was lowered from 35 to 32 % while we are at war. In Vietnam the top bracket's rate was 77%, Korea 92%

The rich had a helluva burden in those eras but have made damn sure they get the spoils afterwards. Agree that those are pretty high figures, but the last number should have gone up from 35 to 40%, not down.

This is proof that they serve their masters well. FVCKING THIEVES :finger:

 

[Cujo]

we didnt go into a recession after oklahoma city, this administration doesnt know what theyre doing. end of story. and yes I can compare it, it took exactly 2 guys to do that in oklahoma, you dont see us with a bunch of tanks trying to kill every scragaly red neck we see back then.

RobFunk,

Outside of Oklahoma, the situation wasn't as somber or at least where I lived (Nevada). That's not to say people weren't talking about it but to compare that episode to one in which airplanes were flown into buildings is a huge stretch. Oklahoma City was localized. 9/11 paralyzed not only the airlines but any business or individual that depended on that method of transportation for their livelihood. That damage wasn't limited to this country as I took a hit on my economic holdings in 2 Asian markets.


I can understand that people don't like Bush but sometimes there's nothing that can be done to avoid certain things. If you like Kerry, good for you. We'll see if he comes through or if he falls flat on his face. If he fails, I hope to see you and others in here bashing him.