Debt Limit - Paying for that which was already spent

I've heard arguments that raising the debt limit is required to pay for expendatures already authorized by Congress. While the authorized expendatures were perhaps unwise there is a valid point to the US government paying for these authorized expendatures.

While I don't know the exact amount of these authorized expendatures I do know that every year the Congress has to pass a budget. The expendatures being referred to are those that were previously authorized by prior budgets but obviously they do not include any new spending authorizations that will be in the 2012 budget. I know, for example, that spending authorizations for the US Army are Constitutionally limited to two year appropriations. At the most the US Army has authorized appropriations through 2013 and not beyond. The Constitution prohibits it.

So exactly what are the current obligation? It does not include any 2012 appropriations because none have been authorized to date.

Assuming that the argument is correct, and it does have merit, that the Congress must raise the debt limit for previously authorized expendatures then why shouldn't the increase in the debt ceiling increase be limited to only covering previously authorized expendatures?

Draw the line in the sand, no more new deficit spending! Let Congress prioritize the 2012 budget so it only authorizes spending based upon revenues. These are not previously authorized expendatures and the Congress basically starts with a clean slate. Past authorizations will be paid but new spending will be limited to revenues.

We don't need a Constitutional amendment to require a balance budget, we merely need Congress to refuse to raise the debt limit in the future to accommodate new deficit spending. Congress can stop future deficits with the 2012 budget by merely limiting appropriations to the revenues that will support the expendatures.

 

If Congress wants to authorize new spending, it should reduce something in return.

It's the "give a penny, take a penny system" except with hundreds of quadrillions of pennys.

Also, raising the debt limit to pay for prior debt is backward thinking. Two debts do not make a right.

 

If Congress limited appropriations to revenues it isn't cutting spending on anything. If appropriations for a program or expendature have not been authorized it isn't really cutting spending. Cutting spending relates to reducing previously authorized expendatures.

For example, the TSA might have $10 billion authorized for 2011 but in the 2012 budget it might only have $5 billion authorized. That is not really a spending cut but instead it is merely a change in the funding authorized. The $10 billion was never previously authorized for 2012 so it cannot be "cut" from the budget. This assumption that because an agency is getting "X" amount of dollars this year but will receive less next year equates to a "cut" is absurd. It is based upon the assumption that funding must remain constant from year to year and that is never the case.

I would settle for a 2012 budget that is equal to the anticipated revenues. The 2012 budget can be balanced even though previously authorized expendatures will require deficit spending. There is no rational reason why the 2012 budget needs to generate more deficits.

 

congress cannot pay for only previously authorized expendatures because the country has more bills than that which have been previously covered under past compromises.

the debt ceiling must be raised to compensate for hikes in social security and medicare costs and also rising welfare spending costs..

also more government contracts are neccessary for future infrastructure deficit spending because the US has stopped investing in itself for a long time.

 

would have to disagree, when government programs like the TSA are labeled as spending cuts in the budget it is because these programs are deemed a neccessity to the countries function.

this means that when spending is authorized to be less than what is needed to run the program efficiently to accomplish its purpose, it falls under the most appropriate label of a "cut"

 

When presenting an argument it helps if the examples support the argument.

Social Security/Medicare are paid for with FICA/Payroll taxes and withdrawals from the Social Security Trust fund. As long as the Trust Fund has funds these expendatures are being met without deficit spending and no current cuts are required. Of course the Trust Fund is being rapidly used up and when it runs out then Social Security/Medicare go belly-up so these programs do require a major overhaul. General tax revenues cannot be used to fund either Social Security or Medicare.

The word "infrastructure" is often tossed about casually and it encompases many things but predominately the states are responsible for infrastructure with a couple of notable exceptions where the federal funding in addition to state funding is addressed by the Constitution. Providing funding for the postal road and providing funding for dockyards are specifically addressed. That doesn't imply that the federal government is fully responsible for these costs but it does have a financial obligation related to them. When it comes to both there are associated federal taxes for funding. There is a federal fuel tax for highways and there are federal taxes, tariffs and import fees related to shipping that uses American ports. For those "infrastructure" responsibilities of the federal government we always see taxes that are generally referred to as "user fees" that are related to them that are intended to fund the expendatures.

So in referring to "infrastructure" we need to be specific. Is it a federal responsibility and are there related taxes to fund those expendatures. Highways, harbors, airports, etc. all have related taxation to fund expendatures. There isn't any real problem related to the federal funding of these projects if the fees and taxes the federal government collects are used for the purposes intended.

So we really don't have an example of something that needs to be addressed by deficit spending.

 

Seems like there should be a rule dictating that.

 

How about we just cut wasteful Federal Spending so we don't have to eventually default like Greece is about to?

What a concept!

 

Oh wow, two memes in one!

The Reagan waste fraud and abuse nonsense, plus the US is just like one of the smallest economies on the planet.

<<< Mod Edit: Insult >>> It's what Tea Partiers do so well.

 

Sadly, I've never heard you present an intelligent argument.

You think calling something a "meme" at random is the ultimate rebuttal.

 

This thread sets an excellent precedence for debate. Let's keep it civil. The next member who insults another will be banned from this thread.

Thank you,

Jiyuu-Freedom
Site Moderator

 

The Debt should be raised to pay current obligations. However at the same time they need to make cuts across the board. And it would be bad to make investments in american highways, schools etc. like they did during the 30s.

Germany, says their trying to do both. Cut cost and still make necessary investments in the country, but this takes time before the markets understand that this country is serious. For example we have a law that we cant increase our debt, I think it becomes relevent in 2015? Of course their exceptions to the rules, but it demonstrates that the germans want to keep their spending under controll.

If America would cut cost drastically and fast, then large segments of society would be out of work eg Military Industrial Complex. Look at NASA many men with highly valued skills have lost their jobs. That not good in an election.

 

No other country in the world has this foolish debt ceiling debate. It's taken as a matter of course that budgets are always provisional and if expected revenues fall below expenditures, the government borrows. Period.

No western democracy spends a minute on this GOP nonsense.

In contrast here in the US, a minority of Tea Partiers has brought the government to the brink of default because the electorate didn't support their attempt to destroy our social sevices, using the illegitimate means of attaching riders to debt ceiling increases.

The Tea Party is totally dysfunctional. A total joke.

 

Incorrect the example was correct as government advances money to social security and medicare through the treasury and if the debt ceiling is not raised it will have no money to make payments for rising costs to these programs...

also this does not include rising welfare and government agency costs, the rising spending requirements for the EPA,TSA, IRS, FBI, CIA homeland security, bridges, highways, etc... have all experienced spending cuts because of republican leadership.

http://www.latimes.com/news/politics/la-pn-debt-primer-20110728,0,5523462.story?track=rss

 

Actually it is the other way around. SS and Medicare advance money to the government which then disperses it as necessary and keeps the excess in a special class of Treasury Securities. The government currently owes about $3Trillion in advances from the SS and Medicare Trust Funds.

The inability of the government to make SS and Medicare payments due to exceeding the debt ceiling is strictly a cash flow problem caused by insufficient revenues from other sources, not the result of insufficient monies from either SS or Medicare.

 

The government will continue to collect Social Security taxes, but the taxes flow in across the month, while the checks go out at the beginning of the month. Normally, the Treasury advances money to Social Security at the start of each month to pay that month’s checks, then gets repaid as the tax money comes in. But the Treasury can’t make that advance if it doesn’t have cash. And while the Social Security Trust Fund has more than $2.5 trillion in assets, that money is invested in U.S. government securities.

If the debt ceiling is not raised, the government cannot make payments to social security and medicare.

 

Obama's lies... repeated by the faithful.

 

You're exactly right, Shiva. What we're seeing is nothing more than smoke & mirrors... by both parties.

The scary part is... if neither party will agree on these 'pseudo' spending cut proposals, what are the chances they'll ever pass a REAL spending cut bill?

 

government gives cash advances to social security and medicare recipients through deficit spending.

if the debt ceiling is not raised the government can not cash in US government securities to pay for social security and medicare

when this happens many elderly people will not have their checks at the end of the month.

 

This is incorrect because the Social Security Trust Fund has Treasury bills on deposit. These can be redeemed on a dollar for dollar basis with new Treasury bills without effecting the national debt. The redemption of Treasury bills on a dollar for dollar basis does not effect the national debt. Interest payments are the only expense related in anyway to the existing debt. The interest cannot be paid for with borrowing but instead would have to be paid for with monthly revenues.

 

Keep drinking that kool-aid, LM. America has 'suffered' shut-downs of the govt 18 times and never once has SS or Medicare been involved... or even threatened. These empty threats are a new low for our country. The Democrats should be ashamed.

 

Virtually non-existent. Neither the Democrats or Republicans are interested in reducing the size and expense of the US government to the point where the American People can afford it. To my knowledge the US budget has never been reduced in my lifetime and I don't expect it now. A lot of promises, a lot of smoke and mirrors, and in the end the government continues to grow and there are never any real spending cuts.

A spending cut means actually reducing an expendature and we merely get the BS that expendatures won't increase as fast as they possibly could. Expendatures continue to rise and no cuts are ever really made by either Democrats or Republicans.

 

Actually, we could also halt, adjust or end programs now that aren't necessary.

The issue is that we are in massive debt, with a $1.2 trillion dollar deficit. Why borrow more?

http://www.usgovernmentspending.com/federal_budget

We do need to make cuts across the board. Absolutely.

Check the link to the current budget and decide what you could live without.

 

I agree with Shiva's comments. The time to debate finance is WHEN THE FISCAL YEAR BUDGET IS CREATED. Given that the Republicans made their miraculous 38 billion dollar reduction for the 1.6 trillion dollar budget deficit, IT SHOULD BE A FOREGONE CONCLUSION THAT THE DEBT CEILING SHOULD BE RAISED TO A LEVEL NECESSARY TO ALLOW THE 2011 BUDGET TO REACH FRUITION. The debt ceiling should be immediately raised to the allow the amount AGREED TO BY THE REPUBLICANS and the fiscal debate should occur again before the next fiscal year budget (2012). Anything less is hypocrisy. Granted, a credit rating reduction is inevitable but this should have been thought of before the amazing $38 billion dollar agreement.

 

That's sad. How hard can it be to get a room full of adults to agree to manage spending, balance the budget and restore Constitutional status of Government? Obviously, that's nearly impossible. Thanks Representatives, you make me proud.