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Treasury Dept. Moves to Avoid Debt Limit

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posted on Mar, 6 2006 @ 04:34 PM

WASHINGTON -- Treasury Secretary John Snow notified Congress on Monday that the administration has now taken "all prudent and legal actions," including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national debt limit.

In a letter to Congress, Snow urged lawmakers to pass a new debt ceiling immediately to avoid the nation's first-ever default on its obligations.

"I know that you share the president's and my commitment to maintaining the full faith and credit of the U.S. government," Snow said in his letter to leaders in the House and Senate.

Treasury officials, briefing congressional aides last week, said that the government will run out of maneuvering room to keep from exceeding the current limit sometime during the week of March 20.

Snow in his letter notified lawmakers that Treasury would begin tapping the Civil Service Retirement and Disability Fund, which Treasury officials said would provide a "few billion" dollars in extra borrowing ability.

Treasury officials also announced that on Friday they had used the $15 billion in the Exchange Stabilization Fund, a reserve that the Treasury secretary has that is normally used to smooth out volatile movements in the value of the dollar in currency markets.

Treasury has also been taking investments out of a $65.3 billion government pension fund known as the G-fund.

Officials have said that once the debt limit is raised, the investments taken out of the pension funds would be replaced and any lost interest payments would be made up. The formal title for the G-fund is the Government Securities Investment Fund of the Federal Employees Retirement System.

Democrats hope to use the upcoming congressional debate over raising the debt limit to highlight what they see as the failings of the administration's economic program with its emphasis on sweeping tax cuts.

An actual default on the debt, a situation when the government misses making payments to current bondholders, is a doomsday scenario considered highly unlikely given what it would do to the government's credit rating.

Please visit the link provided for the complete story.

To me, if the limit is raised, we have already entered this "doomsday scenario". This is the same as me reaching the credit limit on my credit card, and being able to up the limit myself, so I can spend more money. Doesn't really help me at all, just puts me further in debt. That may be a bad example, but this really doesn't sound like a good idea to me.

Things are looking pretty dark folks...

[edit on 3/6/2006 by yadboy]

posted on Mar, 6 2006 @ 05:13 PM
actually, things are looking pretty dang insane!!!

it would be like me, having spent all the money for the week, exausted all my credit to boot, and well, going and finding some nieve friend to loan me enough money to go out and buy 100 more pairs of shoes!!!

how much crap is in that budget that is stupid, unnecessary, and benefits only a small portion of the population, if that? why can't our elected representative understand the words "we're broke"? I can, I sure most of us can, and do, when things get tight, have the ability to say no to ourselves when it comes to not only alot of unnecessary, "gee, it would be nice to have" things, along with a few necessary items.

what the heck is their problem???

[edit on 6-3-2006 by dawnstar]

posted on Mar, 6 2006 @ 05:21 PM
"In a letter to Congress, Snow urged lawmakers to pass a new debt ceiling immediately to avoid the nation's first-ever default on its obligations."

Is this called deficit financing? What is the right term?

Scary stuff, huh?

Check this out. According to this writer, it's not incompetence. Bush Wants To Bankrupt America: There is Method To His Madness

posted on Mar, 6 2006 @ 08:53 PM
scary stuff indeed and this is not receiving enough attention.

More related info here:

[edit on 7-3-2006 by DontTreadOnMe]

posted on Mar, 6 2006 @ 09:33 PM
I was 7/8 of the way done on an ATSNN news story on this and figured I ought to do a ATS search to see if there were any relevant threads before posting. Doh!

Anyway, this is indeed a worrisome situation. I'm not too thrilled that govt. civilian retirement funds are being used to fill the gap. I'm not so worried that they won't be paid back, the govt's credit history is perfect. My worry is that the G fund will become another Social Security Trust Fund - a cash cow for hiding budget deficits.

Perhaps one of the things this prevents that is the fact that the govt. is run by the same civilians whose money is being used!

I'm just sick of the political wrangling and collective hand-wringing with no action. Neither party has proposed anything that I've heard that even approximates a long term solution.

posted on Mar, 6 2006 @ 09:40 PM
Bush is trying to get congress to approve a new line-item veto bill...

WASHINGTON (Reuters) - President George W. Bush, who has never vetoed legislation, asked the U.S. Congress on Monday to give him a line-item veto that would allow him to propose canceling specific spending projects.

But the proposal faces hurdles because an earlier version that Congress passed under former President Bill Clinton was rejected by the Supreme Court as unconstitutional.

Bush said the 1998 court decision "should not be the end of the story," and said the legislation he offered to Congress was crafted in a way to satisfy the court's concerns.

"By passing this version of the line-item veto, the administration will work with the Congress to reduce wasteful spending, reduce the budget deficit and ensure that taxpayer dollars are spent wisely," he said.

Senate Majority Leader Bill Frist, a Tennessee Republican, said he would introduce the bill.

In striking down the Clinton-era line-item veto by a vote of 6-3, the Supreme Court said Congress was not authorized under the Constitution to hand the president that power.

The White House said its proposal would differ from that 1996 law, which allowed the president to reject specific spending items after a bill was passed by Congress.

Under the Bush proposal, the president would propose getting rid of items he considered wasteful and then send the package back to Congress. Congress would have 10 days to hold an up or down vote on the package of proposed changes.

Please visit the link provided for the complete story.

It sounds like a great idea on the surface, cut out a lot of the pork barrel special interests tacked onto important spending bills. Only problem is, I don't trust Dubya as far as I can throw him. I'm sure this is suppose to make me feel all warm and fuzzy, but all I see is a partisan congress going round and round in circles getting absolutely nothing done. Heck, he would probably take out the good parts of the bills, and try to push through all the pork!

[edit on 3/6/2006 by yadboy]

Mod edit : link fixed

[edit on 3/7/2006 by Gools]

posted on Mar, 6 2006 @ 09:45 PM
that's what I thought when I heard about him wanting the line item veto. umm....let's see, he would have passed the nice large sum of money for defense spending, less the attempt by congress to get rid of the torture, right??

if we ever get some sane people in our government I'm all for the line item veto, or anything else that might be used to reign in their spending habits, but this president, I don't think knows what it means to tighten the belt, although he does seem to know what it means to consolidate alot of power under the executive branch of the government.....
I think it's just more of the power grap bit, really.

posted on Mar, 6 2006 @ 09:50 PM

Originally posted by yadboy
Bush is trying to get congress to above a new line-item veto bill...

I'm sure this is suppose to make me feel all warm and fuzzy, but all I see is a partisan congress going round and round in circles getting absolutely nothing done. Heck, he would probably take out the good parts of the bills, and try to push through all the pork!

I used to be a proponent of the line item veto, but I've seen too much crap to think that it would ever be used wisely. Thankfully, the SCOTUS saw the light early on. The line item veto would become just another political tool and wouldn't even come close to fixing the long term problems with the budget. Instead of being able to just hold each other hostage, Congresspersons would be able to hold the Administration hostage too (and vice-versa) - even more so then they already do. Nobody needs that.

posted on Mar, 7 2006 @ 04:22 AM
Trouble is, we actually passed our debt ceiling about 4 to 6 weeks ago. How have we been paying the bills since then??


posted on Mar, 7 2006 @ 04:40 AM
The debt... currently at (as of 07 Mar 2006 at 10:37:34 AM GMT) :

$8,275,876,815,531.95 !

Click for the latest updated number

posted on Mar, 7 2006 @ 06:21 AM

Originally posted by forestlady
Trouble is, we actually passed our debt ceiling about 4 to 6 weeks ago. How have we been paying the bills since then??


Already deep in the hole, so it just means we print more money and sell more bonds.

Welcome to the Neo-Weimar Republic.
Question is how long do we have before paying the piper?

How long can households sustain negative savings? - USA Today

[edit on 7-3-2006 by Regenmacher]

posted on Mar, 7 2006 @ 06:06 PM
As pointed out in this ATS thread - U.S. in Technical Default! - the US has been in technical default since January 24, 2006. The debt limit was set at $8.184 trillion right after the 2004 elections and as pointed out by Hellmutt the debt is now $8.275 trillion.

The limit has already been breached by over $91 billion!

posted on Mar, 7 2006 @ 08:38 PM
I googled "bird flu" today and this delightful article jumped up - about 10 times. So I read it.

Conservatives Are Jumping Ship: Bush Is Going Down

..unlike Nixon's crew, Bush&Co. seem willing to take the country down with them, so desperate are they to hold onto power, deplete the treasury, pay off their corporate friends, carry out their ideological revolution -- and keep themselves out of the federal slammer.

The crimes of the Bush Administration are so many and varied that none of us should be surprised by anything that might happen in the coming weeks and months: Bin Laden captured or reported killed, a U.S.-Israeli air assault on Iran's nuclear facilities, a major terrorist attack inside the U.S. to be followed by martial law, the announcement of a bird-flu outbreak with the military placed in charge. I'm pretty level-headed and don't usually think in these dire terms, but these guys have backed themselves into a tight political corner and are desperate -- and dangerous.


All those defections from the Bush orbit are doing great damage to the once-unified Bush&Co. juggernaut, but I've left out one key one: Wall Street. The titans of finance are agitated, to the point of raising the awareness of the possibility of impeachment or even urging serious consideration of Bush's removal. ...The administration is saying the president has unlimited authority to order wiretaps in the pursuit of foreign terrorists, and that the Congress has no power to overrule him...Perhaps they were researched in a Star Chamber? Putting the president above the Congress is an invitation to tyranny.

So, friends, when we're down in the dumps, depressed by the fact that Bush&Co. are still in power even in the face of all their lies and bumblings and policies that result in thousands of people getting killed and maimed and tortured, let us consider that even their once-loyal rats are deserting the sinking ship of state.

It's a really good read. Trust me.

posted on Mar, 7 2006 @ 09:37 PM
I got an Idea just give Bush an American express credit card and let him use it with not establish maximum after all now is not longer our children's debt but it will be their children and grand children for generations to come to pay for it.

No wonder states wants to abolish abortion they need all the bodies they can get to pay back the debt.

posted on Mar, 8 2006 @ 07:21 AM

Originally posted by soficrow
Conservatives Are Jumping Ship: Bush Is Going Down

Good one to pass around as I have pictured the current admin's demise as a sinking ship of diseased rats. A ship built on fraud and lies doesn't hold water for long.

Here's a well written article in regards to the economy, and sums it all up quite nicely:
The Biggest Lie of them all by gjohnsit

"Give me control of a country's money and I care not who makes the laws".
- Meyer Rothchild

I have noticed WSJ has been running anti-Bush stories of late,
a sure sign big money is prepping for coming change.

Impeachment Proves Risky Political Issue -WSJ

Bush, Congress Make a Farce of the Debt Ceiling
The reality is that taxes and spending are badly out of whack, and hardly anyone -- certainly neither President George W. Bush nor Vice President Richard Cheney -- wants to admit it. If the White House won't acknowledge what's happening, why should an ordinary member of Congress?

Instead, Bush continues to push Congress to extend earlier tax cuts that lowered the maximum personal income tax rate on dividends and long-term capital gains to 15 percent. Those cuts are set to expire at year-end.

America’s Debt Ceiling: A Dangerous Shell Game
“Hence the American dilemma,” says Denning. “How do you convince lenders to lend when you can’t even obey your own laws about spending limits? It’s one thing to sell short-term debt with a respectable yield, but who will be willing to hold any American obligations – short or long term – as the nation’s financing needs grow larger relative to its productivity?”

[edit on 8-3-2006 by Regenmacher]

posted on Mar, 8 2006 @ 10:05 AM
You guys talk like Bush was responsible for this multitrillion dollar debt, when we have this debt ages ago, pretty much all the way back to the Civil war, after we had zero debt for awhile prior to the Civil War.

posted on Mar, 8 2006 @ 11:02 AM

Originally posted by deltaboy
You guys talk like Bush was responsible for this multitrillion dollar debt, when we have this debt ages ago, pretty much all the way back to the Civil war, after we had zero debt for awhile prior to the Civil War.

Leaders are accountable how the nation performs or get rid of the stinking bum.

Bush is responsible for current fiscal policy and saying we always had debt is no excuse for fiscal irresponsibilty. Financial retardism leads to economic collapse or depression. National debt is nearly 60% of GDP and is rising faster under Bushco than under any other administration in American history.

Lack of a sound economic policy equates to this:
Bush disapproval edges Nixon

Perhaps most alarming, Bush has created a larger governmental debt in five years than all the previous U.S. administrations added together - from the time of George Washington to Bill Clinton. source

The emporer has no clothes and you can't wear excuses.

The national savings rate for Americans is at its lowest point since the Great Depression, yet 78 million Americans will retire in the next 20 years.

People planning on going naked too. "Will retire" is a big assumption.
It's more likely they will be working their butts off as pensions go poof.

Those that are part of a rising tide of economic stupidity, fiscal excuse making and monetary complacency can blame themselves also and buy a soup bowl for the mission.

[edit on 8-3-2006 by Regenmacher]

posted on Mar, 8 2006 @ 11:30 AM

Rising faster or slower, it don't matter. It won't go down as long we live the way we live, we buy things overseas as well as acting like the world's policeman since WW2.

posted on Mar, 8 2006 @ 12:01 PM
What deltaboy doesn’t understand in his Bush filled mind is. . . that the reason we live the way we live is thanks to the doings of our administrations, in order to profit from the global economy.

We consume more than we produce and we import more than we export, but is that the American people’s fault? Deltaboy, or is blamed to something called outsourcing something that our present and past administration are very fond off to keep the economy going and be able to influence other markets with poor economies while borrowing from them.

Funny that you blame it to the American way of life rather than the main source of the reason we are where we are now.

Funny that we depend on the money of relatively poor countries like China and Asian nations.

While US profits from this way of doing business we are enjoying the benefits of been able to go into debt without having to pay for all the consequences of any of the countries we borrow from asking for their money back.

While US receive more interest and dividends from the rest of the world than it paid out we are vulnerable to the any of these countries change of hart.

For a while this way of doing business with the rest of the world had benefits, it makes the deficit less serious but sooner of later US will have to pay back, and in 2005 do to weakness in global interest rates we had a glimpse of times to come.

While all this has been good for the US we have enter into a few years in which the debt has been exploited and getting to much in debt will weaken the dollar to the point that it will affect our nation in a way that many experts don’t want to even talk about.

Too much of a good thing can turn sour when is not control the warning signs have been all over but so far have been ignored.

posted on Mar, 8 2006 @ 05:40 PM
Well gee Marg, would you buy a cheaper product or an expensive American product that can do the same thing? Its that simple. We like cheaper products. Nobody wants to buy American products, then no jobs for Americans. Tsk tsk. Whos to blame? The adminstrations? or the American people? The govt doesnt tell the American people what to buy either it be foreign or domestic. Its our choice.

We consume more than we produce and we import more than we export, but is that the American people’s fault?

Its almost like we spend more than what we earn. We become in debt.

[edit on 8-3-2006 by deltaboy]

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