Pro President Obama Blog

The risk of a U.S. default: By the numbers

Jul 15, 2011 The Week – news.yahoo (Excerpts)

If Congress doesn’t raise the debt ceiling by Aug. 2, Treasury Secretary Timothy Geithner will have to make some very tough choices.

It’s all coming down to the wire. If Congress and President Obama don’t reach a deal to raise the U.S. debt limit by early August, the government won’t be able to honor all of its financial obligations. The nation’s savings account would be essentially empty, and without the authority to borrow, Obama and Treasury Secretary Timothy Geithner would have to choose which bills to pay from incoming tax revenue — and which bills and obligations to ignore. “You can move the chess pieces around all you want,” says Jay Powell of the Bipartisan Policy Center, but “you’re going to lose.” How much? Here, a look at some numbers underpinning the debate:

$14.294 trillion – Current debt ceiling, reached May 16. Geithner has moved money around so the feds can continue paying the bills through Aug. 2, even though the nation’s legal borrowing limit has already been reached.

$80 million – Number of payments U.S. makes every month

$306.7 billion – Amount the U.S. is obligated to pay from Aug. 3 to Aug. 31

$172.4 billion – Amount of revenue the U.S will bring in from Aug. 3 to Aug. 31

44 – Percentage of those August payments that would have to be immediately scrapped if no deal is reached

$29 billion – Interest payments on Treasury securities due to investors on Aug. 15

$49.2 billion – Social Security benefits to be paid from Aug. 3 to Aug. 31

$50 billion – Medicare and Medicaid benefits to be paid from Aug. 3 to Aug. 31

$31.7 billion – Payments to defense contractors due from Aug. 3 to Aug. 31

$12.8 billion – Unemployment benefits to be paid from Aug. 3 to Aug. 31

$2.9 billion – Active-duty military pay due from Aug. 3 to Aug. 31

$2.9 billion – Veterans Affairs program payments due from Aug. 3 to Aug. 31

$14.2 billion – Federal salaries and benefits due from Aug. 3 to Aug. 31

$12 billion – U.S. tax income expected to be received on Aug. 3

$32 billion – U.S. spending planned for Aug. 3 (including $23 billion in Social Security checks)

50 – U.S. credit rating within 90 days

7,000 – Number of top-rated municipal bonds Moody’s will automatically downgrade without a debt-ceiling deal

$130 billion – Amount of municipal debt affected by the Moody’s ultimatum

74 – Number of times the debt ceiling has been raised since 1962

10 – Number of times the debt ceiling has been raised since 2001

Highlights from President Obama’s June 29th press conference:

” There are a lot of folks out there who are still struggling with the effects of the recession. Many people are still looking for work or looking for a job that pays more. Families are wondering how they’d deal with a broken refrigerator or a busted transmission, or how they’re going to finance their kids’ college education, and they’re also worrying about the possibility of layoffs.

The struggles of middle-class families were a big problem long before the recession hit in 2007. They weren’t created overnight, and the truth is our economic challenges are not going to be solved overnight. But there are more steps that we can take right now that would help businesses create jobs here in America.

Today, our administration is trying to take those steps, so we’re reviewing government regulations so that we can fix any rules in place that are an unnecessary burden on businesses. We’re working with the private sector to get small businesses and start-ups the financing they need to grow and expand. And because of the partnership that we’ve launched with businesses and community colleges, 500,000 workers will be able to receive the right skills and training for manufacturing jobs in companies all across America — jobs that companies are looking to fill.

In addition to the steps that my administration can take on our own, there are also things that Congress could do right now that will help create good jobs“

* Congress can send me a bill that would make it easier for entrepreneurs to patent a new product or idea

* Congress can send me a bill that puts construction workers back on the job rebuilding roads and bridges

* Congress can advance a set of trade agreements that would allow American businesses to sell more of their goods and services to countries in Asia and South America

* Congress can extend the tax cut I signed for middle-class families in December for one more year.

* Congress can get rid of tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners

“So the bottom line is this: Any agreement to reduce our deficit is going to require tough decisions and balanced solutions. And before we ask our seniors to pay more for health care, before we cut our children’s education, before we sacrifice our commitment to the research and innovation that will help create more jobs in the economy, I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up a tax break that no other business enjoys. I don’t think that’s real radical. I think the majority of Americans agree with that.

So the good news is, because of the work that’s been done, I this we can actually bridge our differences. I think there is a conceptual framework that would allow us to make huge progress on our debt and deficit, and do so in a way that does not hurt our economy right here and right now.

And it’s not often that Washington sees both parties agree on the scale and the urgency of the challenge at hand. Nobody wants to put the creditworthiness of the United States in jeopardy. Nobody wants to see the United States default. So we’ve got to seize this moment, and we have to seize it soon. The Vice President and I will continue these negotiations with both leaders of both parties in Congress for as long as it takes, and we will reach a deal that will require our government to live within its means and give our businesses confidence and get this economy moving. “

President Obama 6/9/11

For the entire transcript: http://www.whitehouse.gov/the-press-office/2011/06/29/press-conference-president

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