Same old tactic: Treasury to issue $1trillion in new debt at beginning of 2014
Lion's share went to payoff maturing securities Treasury sold before that had come due
It's the same old song for the federal government. The Treasury was forced to issue more than $1 trillion in new debt Between October 1, 2013, the first day of fiscal 2014, and November 14. This was less than a month after Congress agreed to temporarily suspend the legal limit on the federal debt. In other words, a very bad way to start a new year that hasn't begun yet.
"There is no plan other than raising the debt limit that permits us to meet all of our obligations," Treasury Secretary Jacob Lew said later in that hearing.
These funds were used to cover government obligations and expenses that exceeded the $255,080,000,000 it accrued through tax revenues during the same six-week period.
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According to the Daily Treasury Statement, the Treasury needed to redeem $879,734,000,000 in maturing debt during the first six weeks of the fiscal 2014.
The government's biggest expenses were $98.853 billion in Social Security benefits, $77.704 billion in Medicare expenses, $35.304 billion to Defense Department vendors, $34.623 billion for Medicaid, $20.537 billion for the salaries for federal workers, $20.155 billion for the Department of Education, $13.060 billion for the Department of Agriculture's Food and Nutrition Service (which includes the food stamp program), $11.152 billion in Health and Human Services Department grants, $10.648 billion for Housing and Urban Development Department programs, and $9.172 billion to buy insurance for federal employees over and above the $20.537 billion they were paid in salaries.
When Treasury Secretary Jacob Lew appeared in the Senate Finance Committee on October 10 and called for Congress to increase the legal limit on the federal debt, he expressed regret that people do not understand that the Treasury needs to constantly borrow new money to meet ongoing expenses.
"Every week we roll over approximately $100 billion in U.S. bills," Lew testified. "If U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.
"There is no plan other than raising the debt limit that permits us to meet all of our obligations," Lew said later in that hearing.
"Let me start by saying what I think should be obvious: that if we don't have enough cash to pay all our bills, we will be failing to meet our obligations, and under any scenario we will be defaulting on obligations," said Lew.
"Let me remind everyone," he said, "principal on the debt is not something we pay out of our cash flow of revenues. Principal on the debt is something that is a function of the markets rolling over."
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Respect for Women: That all cultures may respect the rights and dignity of women.
Vocations: That many young people may accept the Lordís invitation to consecrate their lives to proclaiming the Gospel.
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