$239 billion spike uses up 60% of funding OK’d on Tuesday
The debt subject to the statutory limit shot way past the old cap of $14.294 trillion to hit $14.532 trillion on Tuesday, according to the latest the Treasury Department figures, which are released on the next business day.
That increase puts the government already remarkably close to the new debt limit of $14.694, which means one day’s new borrowing ate up 60 percent of the $400 billion in space Congress granted the president this week.
Debt numbers go up and down regularly, depending on what the Treasury Department is redeeming or issuing on any day, but have been on a steep upward trend for the past decade as spending has ballooned and revenues have fluctuated.
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For the past 2½ months, though, the number essentially was frozen as the government was poised to reach the borrowing limit set by law. The Treasury Department used extraordinary means to stall, but was about to run out of room on Tuesday.
With little time to spare, Congress and the White House managed to cobble together a deal to grant new borrowing authority: an initial increase of $400 billion, coupled with future increases.
The fight was so bruising that President Obama on Wednesday took his debt team out to celebrate by buying them hamburgers at Good Stuff Eatery, a well-known burger joint on Capitol Hill. The White House said it was a reward for their “nonstop” work over the past few months.
At a meeting of his Cabinet later in the day, the president said the debt increase gave the government some room to maneuver.
“We have now averted what could have been a disastrous blow to the economy. And we have identified on the front end over a trillion dollars in spending reductions that can be done sensibly and safely without affecting core programs,” Mr. Obama said.
He also looked ahead to the committee the debt deal creates and charges with finding an additional $1.5 trillion in deficit reduction by the end of the year.
“It’s going to be challenging work, and I’m encouraging Congress to take it with the utmost seriousness,” Mr. Obama said.
The deal called for caps on future spending and granted the president the power to win an initial $400 billion debt increase, with another $500 billion coming later if Congress doesn’t manage to block it. Yet another increase is contingent on the committee’s recommendations.
Former GOP Sen. Alan Simpson, who co-chaired the deficit commission that Mr. Obama formed last year, called the spending limits in the bill “a baby step of the first order.”
“Disappointing would be half a world. Until they get to the point where they can change the ‘B’ in billion to a ‘T’ in trillion, we are not going to get anywhere,” he told Bloomberg Television.
The previous one-day record debt increase was $186 billion, set on June 30, 2009.
Government debt subject to the statutory limit is broken down into two categories: debt held by the public, and intragovernmental loans such as money borrowed from the Social Security Trust Fund and used to cover other basic government expenses.
According to the latest figures, the debt held by the public stood on Tuesday at $9.908 trillion, and the intragovernmental debt was $4.673 trillion. A slight portion of that debt is excluded from the legal limit.