Sunday, October 20, 2013

U.S. debt jumps a record $328 billion — tops $17 trillion for first time

U.S. debt jumps a record $328 billion — tops $17 trillion for first time

In this photo taken Friday, Oct. 4, 2013, President Barack Obama smiles during an exclusive interview with The Associated Press in the White House library in Washington, four days into a partial shutdown of the federal government that has forced 800,000 people off the job, closed national parks and curbed many government services. The deadline for keeping the government open coincided with the Oct. 1 start of sign-ups for the insurance markets at the center of the health care overhaul Obama signed into law during his first term. Government websites struggled in the first week to keep up with high demand for the new marketplaces. It’s not clear that more than a few managed to enroll the first day. (AP Photo/Charles Dharapak)
U.S. debt jumped more than $300 billion Thursday, the first day the federal government was able to borrow money under the deal President Obama and Congress sealed last week.
Debt now equals $17.075 trillion, according to figures posted online by the Treasury Department on Friday.

The $328 billion increase is an all-time record, shattering the previous high of $238 billion set two years ago.
The giant jump comes because the government was replenishing its stock of “extraordinary measures” — the federal funds it borrowed from over the past five months as it tried to avoid bumping into the debt ceiling.
Under the law, that replenishing happens as soon as there is new debt space.
(Treasury Department) (Treasury Department) more >
In this case, the Treasury Department borrowed $400 billion from other funds beginning in May, awaiting a final deal from Congress and Mr. Obama.
Usually Congress sets a borrowing limit, or debt ceiling, that caps the total amount the government can be in the red.
But under the terms of this week’s deal, Congress set a deadline instead of a dollar cap. That means debt can rise as much as Mr. Obama and Congress want it to, until the Feb. 7 deadline.

Judging by the rate of increase over the past five months, that could end up meaning Congress just granted Mr. Obama a debt increase of $700 billion or more.
Republicans initially sought to attach strings to the debt increase, but they surrendered last week, instead settling on a bill that reopened the government and included some special earmark projects, but didn’t include any spending cuts.
Democrats insisted that the debt increase be “clean,” meaning without any strings attached. They say the debt increase only allows Mr. Obama to pay for the bills he and Congress have already racked up, and that it doesn’t encourage new spending.

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