Both Republicans and Democrats At Fault For $14 Trillion Debt

By Alan Denton

james-denton@mocs.utc.edu

WASHINGTON (AP) — Two centuries after America’s birth, the national debt was a bit under $1 trillion when Ronald Reagan took office in 1981. Just three decades later, it has soared above $14 trillion, and accusations of blame are flying. Both Republicans and Democrats played major roles in driving the figure sky high.

If the tab were divided up now, it would come to roughly $47,000 for each man, woman and child in the United States.

In what is shaping up as the next bruising economic battle, Congress is being asked by President Barack Obama to authorize fresh borrowing once the nation’s fast-growing debt slams into the current debt ceiling of $14.3 trillion — something the Treasury Department says will happen no later than May 16.

Leaders of both parties acknowledge that failing to raise the limit could force the government to begin defaulting on some of its obligations — for instance making interest payments on Treasury bills and bonds — with severe adverse consequences, including possibly pushing the economy back into recession.

Creative accounting may help forestall the crisis for a few additional months. But then the effects could be severe, or as the White House warns, “like Armageddon, in terms of the economy.”

Republican and Democratic Symbols

Republicans like to blame Obama and congressional Democrats, citing heavy spending that they claim has done little to end the recession or create jobs. Democrats argue that the stage for fiscal ruin was set by Republican President George W. Bush, with large tax cuts that favored the wealthy, two wars and a vastly underfunded prescription drug program for the elderly. They accuse Bush of squandering a budget surplus handed him by President Bill Clinton.

 

“We lost our way” during the Bush years, Obama suggested on Wednesday as he laid out his own prescriptions for taming the nation’s long-term budget woes, a move the administration hoped would also smooth the way for a debt-ceiling vote.

In fact, spending far outpaced revenues in both the Bush and Obama years. And the main culprit in addition to war spending was the devastating 2007-2009 recession, which not only prompted hundreds of billions of dollars in downturn-fighting spending by both the Bush and Obama administrations, but also resulted in a sharp dip in tax revenues due to sagging individual and corporate incomes.

The main reasons for big increases in the national debt in the years ahead are fast-growing obligations for Social Security, Medicare, Medicaid and other entitlement programs as tens of millions of baby boomers reach retirement age.

Congress has raised the debt limit ten times in the last decade alone, most recently in February 2010. But this year, the stakes are higher than usual, with Republicans and some Democrats warning Obama that they will not vote to raise it unless he agrees to mandatory restraints on future spending.

It was against this backdrop that Obama on Wednesday countered Republican budget plans with a series of his own proposals that he held out as better balanced. They included wide-ranging spending cuts, tax increases aimed at the wealthy and a “debt failsafe” trigger for additional across-the-board spending cuts and tax hikes if deficits are not headed down by 2014.

“That should be an incentive for us to act boldly now, instead of kicking our problems further down the road,” Obama said. Still, his plan faced difficulties ahead, with GOP opposition to new tax increases and complaints from some Democrats that his spending cuts are too drastic.

The U.S. has never defaulted on its debt. Its bonds are viewed as among the safest investments in the world. In addition to millions of Americans, many foreign governments and investors have vast holdings in Treasury securities, with China leading the pack.

The GOP now is in the majority in the House of Representatives after mid-term elections last November that many victors and tea-party activists viewed as a mandate for deep spending cuts.

“My members won’t vote to increase the debt limit unless we’re taking serious steps in the right direction,” says House Speaker John Boehner, R-Ohio.

After a White House meeting with Obama on Wednesday to preview the speech, Boehner said, “I think the president heard us loud and clear.” He agreed that passing a debt-limit extension is highly important. “Not meeting our debt obligations is a very bad idea,” he said. But Boehner also insisted that higher taxes not be part of any debt relief deal.

The national debt is the total accumulated indebtedness of the U.S. government. As of Wednesday, it stood at $14.27 trillion. Of this, $14.21 trillion is subject to the debt limit. For various mostly technical reasons, several small governmental programs are not counted.

The national debt should not be confused with the federal budget deficit, which is only a one-year slice. The deficit is the difference between what the government spends in a given year and what it takes in. In the budget year that ends Sept. 30, the deficit is expected to be a record $1.5 trillion. At that level, for every $1 the government spends, it must borrow about 42 cents.

Only a few times in the nation’s history has the government run a budget surplus. The most recent was in the early 2000s, when for several years the government took in more than it paid out. That helped take a nick out of the national debt, then hovering between $5 trillion and $6 trillion. Soon deficits returned and the national debt resumed its relentless climb.

“America’s finances were in great shape by the year 2000. We went from deficit to surplus. America was actually on track to becoming completely debt-free, and we were prepared for the retirement of the baby boomers,” Obama said. “But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed.”

The national debt began when President George Washington and Congress agreed to take on debts incurred by the states for fighting the Revolutionary War.

It broke through the $1 trillion mark (that’s a $1 followed by 12 zeroes) in 1981, the first year of the Reagan’s presidency. But despite Reagan’s vow to balance the budget, the debt tripled during his two terms, to just over $3 trillion under the weight of a recession, large tax cuts and increased spending.

When his successor, President George H.W. Bush, left office in early 1993, the debt was over $4 trillion. Clinton’s eight years in office took it to nearly $6 trillion, despite those fleeting budget surpluses. When George W. Bush finished his two terms the debt had pushed through the $10 trillion mark.

A celebrated national debt “clock” near Times Square had to be rebuilt to allow for the extra digit.

In just 2½ years under Obama, the debt has grown to where it stands today.

Of the $14.27 trillion national debt, some $4.62 trillion is money the government owes itself — mostly money borrowed from Social Security revenues. Without it, the “debt held by the public” is $9.65 trillion.

According to Obama administration figures, just over $3 trillion of the $14.27 trillion debt can be attributed to Bush-era tax cuts, the wars in Iraq and Afghanistan and the Medicare prescription drug program. Stimulus spending by Obama and tax cuts he signed into law accounted for about $600 billion through last Sept. 30.

If there are no changes in government policies, the debt will soar to $18.76 trillion by 2014 and $20.8 trillion by 2016, according to administration projections.

 

A Musical History of the White House

White House (AP/THELOOP)-

MELANCHOLY BALLAD

The first East Room concert for an invited audience took place on Feb. 23, 1883, when Chester Arthur had more than 100 guests hear members of Her Majesty’s Opera Company sing Mozart, Verdi and Wagner. The star of the evening was famed Canadian soprano Emma Albani, who sang “Robin Adair” as her final selection. The song had special meaning for Arthur, whose late wife Ellen had sung the Irish ballad many times at Arthur’s request.

THE LION SHINES

Theodore Roosevelt’s White House was the first to feature a Steinway piano, and great pianists soon followed. Ignacy Jan Paderewski’s first appearance at the White House in April 1902 was recounted by portrait painter Cecilia Beaux, who wrote: “The yellow head of the Lion shone gloriously against the satin of the Blue Room. … I think it may have been better than hearing Chopin himself.” Paderewski described the president’s reaction: “The president listened with charming interest and applauded vociferously and always shouted out ‘Bravo! Bravo! Fine! Splendid! — even during the performance.”

NO THANKS

Franklin and Eleanor Roosevelt brought in professional dancers to the White House for the first time. They featured black vocal artists, the first staged opera, women’s organizations, ethnic groups and an array of American folk singers and players never before seen in the mansion. Offers to perform in the Roosevelt White House came in at the rate of 250 a season during the 1930s. Some who never made it: a young man who demonstrated the “Theremin Wave — a scientific musical mystery,” a woman who played the piano wearing mittens, and an 18-month-old baby who directed music in perfect time.

SONG OF AN EXILE

Famed Spanish cellist Pablo Casals played in Theodore Roosevelt’s White House in 1904, but he stopped making American appearances in 1938 because the United States had recognized the Franco dictatorship. Casals lived in exile, vowing not to return to Spain until democracy was restored. When President John Kennedy sent him a letter inviting him to play for a November 1961 state dinner, Casals accepted because of his admiration for the president. The hour-long concert was serious, featuring works by Mendelssohn, Robert Schumann, and Francois Couperin, and closed with a powerful encore. “You might know this song,” Casals said, almost weeping. “It’s a Catalan folk song, ‘The Song of the Birds’ — but to me, it’s the song of the exile.”

KENNEDY’S CUES

Kennedy was caught more than once clapping at the wrong time during classical numbers, and sometimes was uncertain when a concert was finally over. Social secretary Letitia Baldrige worked out a secret signal to cue him on when to clap. “As the last piece was almost finished, I was to open the central door of the East Room from the outside about two inches — enough for him to glimpse the prominent Baldrige nose structure in the crack. It worked beautifully that night and for all future concerts,” Baldrige said.

NIXON’S BLUES

Five months before Richard Nixon resigned in disgrace, he hosted governors in March 1974 at the White House, where blues great Pearl Bailey provided after-dinner entertainment. Bailey persuaded Nixon to play the piano, telling the president he could choose any number he wanted. But when Nixon began playing “Home on the Range,” Bailey complained, “Mr. President, I want to sing a song, not ride a horse.” Then the two of them had trouble finding the same key. “I don’t know whether I’m finding him, or he’s finding me,” Bailey said. Vice President Gerald Ford said he’d never laughed so hard. Nixon said: “I just want to say to our distinguished guests that this piano will never be the same again and neither will I.”

SALT PEANUTS

The Carters loved classical music, but also wanted to showcase ethnic and folk traditions as well. In June 1978, the White House hosted a jazz concert on the South Lawn in honor of the 25th anniversary of the Newport Jazz Festival. The concert featured nine decades of jazz performers, including 95-year-old Eubie Blake, Herbie Hancock, Dizzy Gillespie, Stan Getz and others. Carter, sitting on the lawn in his shirt sleeves, asked Gillespie to play “Salt Peanuts” and joined in with repeated chants of “salt peanuts” in the breaks.

CLOSE CALL

Frank Sinatra didn’t have much time to rehearse when the Reagan White House asked him to perform for a state dinner for Sri Lanka in 1984. Security at the White House was tightened in the aftermath of the bombing of the U.S. Embassy in Beirut, and so bomb-sniffing dogs had to check out everything coming into the mansion, including musical instruments. On the day of the dinner, the dogs became too exhausted to work anymore, and Sinatra’s instruments were stranded outside the East Gate until replacement dogs could be called in.

VELVET UNDERGROUND

When the Clinton White House welcomed Czech President Vaclav Havel for a state dinner in 1998, the former playwright made a special request for entertainment by rocker Lou Reed, a founding member of the former rock group Velvet Underground. The group had helped inspire Havel’s leadership of the “Velvet Revolution” that brought democracy to the Czech Republic. In halting English, Havel told about getting his first earful of Reed’s music during a visit to Greenwich Village in 1968, and said, “I’ve been listening to it for 30 years.” Reed’s band for the White House gig included Milan Hlavsa, a bass player from the Czech Republic whose music was inspired in part by Reed.

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Sources:

—”Musical Highlights from the White House,” by Elise K. Kirk.

—”Entertaining at the White House with Nancy Reagan,” by Peter Schifando and J. Jonathan Joseph.

—AP files