The total public debt of the United States has surpassed the $34 trillion mark for the first time in the nation's history.
The Department of the Treasury confirmed the historic event on Tuesday, Jan. 2, just as members of the divided Congress gear up for another series of political battles over government spending. (Related: House passes record $886 BILLION defense spending bill.)
The Treasury noted that the historic mark was hit on Friday, Dec. 29, when total public debt outstanding rose to $34.001 trillion from $33.911 trillion on Thursday, Dec. 28.
The debt that counts toward the federal debt ceiling rose to $33.89 trillion on Friday from $33.794 trillion the previous day. This "debt subject to limit" category is slightly lower because it does not include the unamortized discount on U.S. Treasury bills and zero coupon bonds, on debt issued by the Federal Financing Bank and guaranteed debt of certain other government agencies.
This milestone comes shortly after the federal debt hit the $33 trillion mark in September 2023 amid rising federal deficits fueled by falling tax revenues and rising federal government spending.
This means the federal government spent a trillion dollars within just four months, growing significantly faster than expected.
"So far, Washington has been spending money as if we had unlimited resources," said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles. "But the bottom line is there is no free lunch, and I think the outlook is pretty grim."
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Maya McGuineas, president of the fiscal watchdog organization the Committee for a Responsible Federal Budget, called the $34 trillion debt figure "a truly depressing achievement" that the committee attributes to the unwillingness of political leaders to make "difficult fiscal choices."
"We remain hopeful that policymakers will take further measures to reduce our borrowing either by raising taxes, reducing spending or creating a fiscal commission – or ideally by doing all of the above," said MacGuineas in a statement.
Meanwhile, the administration of President Joe Biden has accused Republicans of being responsible for the historic achievement, with White House spokesperson Michael Kikukawa claiming that the debt increases were "trickle-down debt" driven by the 2017 tax cuts passed by the GOP that only benefited corporations and wealthy Americans.
"Congressional Republicans want to double down on 'MAGAnomics' with more than $3 trillion in giveaways skewed to the wealthy while forcing hardworking Americans to pay the price by cutting Social Security, Medicare and Medicaid," said Kikukawa in a statement.
Congress expected to bring up debt, government spending
Congress returns to Washington on Monday, Jan. 8, to tackle the Jan. 19 and Feb. 2 deadlines for settling government spending through September 2024 – the end of the current fiscal year.
Fortunately for Democrats, Republican lawmakers last year struck an agreement with the White House to temporarily lift the nation's debt limit, staving off what would have been a costly battle over the debt limit and allowing both the GOP and the administration to focus on government spending. This agreement lasts until January 2025.
Republicans are demanding reduced fiscal 2024 discretionary spending below caps agreed to in June. Democrats and pro-Kyiv and pro-Tel Aviv Republicans are hoping to pass emergency military aid for Ukraine and Israel, possibly with unrelated border security provisions attached.
Republicans are also calling for massive cuts to non-defense government programs and the repeal of clean energy tax credits and government spending authorized in Biden's Inflation Reduction Act. The GOP is also interested in cutting Biden's Internal Revenue Service funding and cutting taxes further.
This would contradict the White House's desire to increase taxes on large corporations and wealthy Americans and cut government spending on pharmaceuticals and tax breaks for energy companies, which Biden claims would reduce the U.S. deficit by $2.5 trillion over 10 years.
Failure to agree on the dozen fiscal 2024 spending bills Congress needs to pass before the deadlines would plunge the federal government into a shutdown. But reaching a compromise that is agreeable to both parties may prove to be more difficult, especially as politicians are now in campaign mode with the November presidential and congressional elections coming into focus.
Learn more about the public debt and government spending at GovernmentDebt.news.
Watch this clip from Fox Business with Republican Rep. Buddy Carter of Georgia discussing how the interest on U.S. debt alone is "killing us," and the only way to solve this is to immediately curb government spending.
This video is from the NewsClips channel on Brighteon.com.
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