This is ABSOLUTE BULLSHIT!
It may be true that raising the debt limit does not authorize "new" spending commitments, but the suggestion that raising the debt limit does not increase the debt is both absurd and a LIE.
The United States Treasury claims raising the debt ceiling simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.
If only that were true, I guess it depends on how you define "finance".
If raising the debt ceiling doesn't raise the national debt, why has the national debt risen following each increase in the debt ceiling.
Let's begin with a brief history of raising the debt ceiling. I will limit our debt ceiling history lesson to the years since Barack Obama was elected President in 2008.
The fiscal year for the United States Government begins every year on October 1 and ends the following year on September 30. Therefore, for this debt ceiling history lesson, we will begin with the fiscal year 2009 that began on October 1, 2008. Barack Obama was elected President of the United States on November 4, 2008.
The 2007-2008 fiscal crisis and subsequent economic slowdown led to sharply higher deficits in recent years, which led to a series of debt limit increases. The Housing and Economic Recovery Act of 2008 (H.R. 3221), signed into law (P.L. 110-289) on July 30, 2008, included a debt limit increase. The Emergency Economic Stabilization Act of 2008 (H.R. 1424), signed into law on October 3 (P.L. 110-343), raised the debt limit again. The debt limit rose a third time in less than a year to $12,104 billion with the passage of the American Recovery and Reinvestment Act of 2009 on February 13, 2009 (ARRA; H.R. 1), which was signed into law on February 17, 2009 (P.L. 111-5). Following that measure, the debt limit was subsequently increased by $290 billion to $12,394 billion (P.L. 111-123) in a stand-alone debt limit bill on December 28, 2009, and by $1.9 trillion to $14,294 billion on February 12, 2010 (P.L. 111-139), as part of a package that also contained the Statutory Pay-As-You-Go Act of 2010.
The 2011 debt limit episode, during the 112th Congress, was resolved on August 2, 2011, when President Obama signed into law the Budget Control Act of 2011 (BCA; S. 365). The federal debt had reached its statutory limit on May 16, 2011, prompting Treasury Secretary Timothy Geithner to declare a debt issuance suspension period, allowing certain extraordinary measures to extend Treasury’s borrowing capacity. The BCA included provisions aimed at deficit reduction and would allow the debt limit to rise between $2,100 billion and $2,400 billion in three stages, with the latter two subject to congressional disapproval. All three increases, totaling $2,100 billion, have occurred. A January 12, 2012, presidential certification triggered a third, $1.2 trillion increase that took place on January 28, 2012. A disapproval measure, which would have been subject to veto, could have blocked that increase if enacted within 15 days of the certification. On January 18, 2012, the House passed such a measure (H.J.Res. 98) on a 239-176 vote. The Senate declined to take up a companion measure (S.J.Res. 34) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-passed measure (H.J.Res. 98), thus clearing the way for the increase, resulting in a debt limit of $16,394 billion.
According to the timeline above, the debt ceiling has been raised FOUR times since Barack Obama became President of the United States. The debt ceiling is today up for a FIFTH increase during the Obama presidency.
Contrary to popular belief, the current debt ceiling was originally reached on December 31, 2012. It was only through extraordinary measures by both the US Treasury Department and the US Congress that the "current" debt ceiling has been reached once again....and I do mean EXTRAORDINARY...in fact, the government has been operating WITHOUT a debt ceiling since January 31, 2013:
The 2011 debt limit episode, during the 112th Congress, was resolved on August 2, 2011, when President Obama signed into law the Budget Control Act of 2011 (BCA; S. 365). The federal debt had reached its statutory limit on May 16, 2011, prompting Treasury Secretary Timothy Geithner to declare a debt issuance suspension period, allowing certain extraordinary measures to extend Treasury’s borrowing capacity. The BCA included provisions aimed at deficit reduction and would allow the debt limit to rise between $2,100 billion and $2,400 billion in three stages, with the latter two subject to congressional disapproval. All three increases, totaling $2,100 billion, have occurred. A January 12, 2012, presidential certification triggered a third, $1.2 trillion increase that took place on January 28, 2012. A disapproval measure, which would have been subject to veto, could have blocked that increase if enacted within 15 days of the certification.8 On January 18, 2012, the House passed such a measure (H.J.Res. 98) on a 239-176 vote. The Senate declined to take up a companion measure (S.J.Res. 34) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-passed measure (H.J.Res. 98), thus clearing the way for the increase, resulting in a debt limit of $16,394 billion.
On December 26, 2012, the U.S. Treasury stated that the debt would reach its limit on December 31 and that the Treasury Secretary would declare a debt issuance suspension period to authorize extraordinary measures (noted above, described below) that could be used to meet federal payments for approximately two months. As predicted, federal debt did reach its limit on December 31 when large biannual interest payments, in the form of Treasury securities, were made to certain trust funds. From December 31, 2012, until H.R. 325 was signed on February 4, 2013, total federal debt subject to limit was held just $25 million under its $16,394 billion limit.
The U.S. Treasury stressed that these extraordinary measures would be exhausted more quickly than in recent debt limit episodes for various technical reasons. A January 14, 2013, letter from Treasury Secretary Geithner also estimated that extraordinary measures would be exhausted sometime between mid-February or early March 2013.13 CBO had previously estimated that federal debt would reach its limit near the end of December 2012, and that the extraordinary measures could be used to fund government activities until mid-February or early March 2013. One policy research group had projected that the deadline for action would fall in mid-February,15 while other estimates put that date at the beginning of March 2013. Changes in economic conditions or financial markets, as well as in federal taxation and expenditure trends,
affect Treasury’s debt management requirements.
During the 112th Congress, Speaker John Boehner had stated that a future debt limit increase should be linked to spending cuts of at least the same magnitude, a position that reflects the structure of the Budget Control Act. On April 10, 2013, the Oversight Subcommittee of the House Ways and Means Committee held hearings on the debt limit and how the U.S. government might operate when the debt limit binds.
House Republicans decided on January 18, 2013, to propose a three-month suspension of the debt limit tied to a provision that would delay Members’ salaries in the event that their chamber of Congress had not agreed to a budget resolution.19 H.R. 325, according to its sponsor, would allow Treasury to pay bills coming due before May 18, 2013, and would hold salaries of Members of Congress in escrow if a house of Congress had not agreed to a budget resolution by April 15, 2013. Such a provision could raise constitutional issues under the Twenty-Seventh Amendment. A new debt limit would then be set on May 19.20
On January 23, 2013, the House passed H.R. 325, which suspends the debt limit until May 19, 2013, on a 285-144 vote. The Senate passed the measure on January 31 on a 64-34 vote; it was then signed into law (P.L. 113-3) on February 4.
Once H.R. 325 was signed into law on February 4, the U.S. Treasury replenished funds that had been used to meet federal payments, thus resetting its ability to use extraordinary measures. As of February 1, 2013, the U.S. Treasury had used about $31 billion in extraordinary measures.21 Statutory language that grants the Treasury Secretary the authority to declare a “debt issuance suspension period” (DISP), which permits certain extraordinary measures, also requires that “the Secretary of the Treasury shall immediately issue” amounts to replenish those funds once a debt issuance suspension period (DISP) is over.22 A DISP extends through “any period for which the Secretary of the Treasury determines for purposes of this subsection that the issuance of obligations of the United States may not be made without exceeding the public debt limit.”
Once the debt limit suspension lapsed after May 18, 2013, the U.S. Treasury reset the debt limit at $16,699 billion, or $305 billion above the previous statutory limit. On May 20, 2013, the first business day after the expiration of the suspension, debt subject to limit was just $25 million below the limit.
Some Members, as noted above, stated that H.R. 325 (P.L. 113-3) was intended to prevent the U.S. Treasury from accumulating cash balances. The U.S. Treasury’s operating cash balances at the start of May 20, 2013 ($34 billion), were well below balances ($60 billion) at the close of February 4, 2013, when H.R. 325 was enacted.
Treasury Secretary Jacob Lew notified Congress on May 20, 2013, that he had declared a new debt issuance suspension period (DISP), triggering authorities that allow the Treasury Secretary to use extraordinary measures to meet federal obligations.27 That DISP will last until August 2, 2013, just before the expected date of a summer recess of Congress.28 Secretary Lew urged Congress to raise the debt limit in a “timely fashion.”
That was certainly a series of extraordinary events, care of the Congress and the Treasury Department, that has gotten us to today's "threat" of a debt default. It is bit disingenuous of President Obama and the Senate Democrats to blame the Republicans for this looming "debt default". If the Republicans "wanted" a debt default, they could have forced one months ago.
Okay, we have now established that the debt ceiling has been raised FOUR times since President Obama was elected in November 2008. The President and the Treasury Department are today seeking a FIFTH increase in the debt ceiling.
So the debt ceiling has been raised FOUR times during the Obama presidency, with a fifth on the way. If raising the debt ceiling doesn't raise the debt, as President Obama claims, then why have we had to keep raising the debt ceiling? BECAUSE THE DEBT KEEPS RISING!!!
According to TreasuryDirect, the 2009 fiscal year began with the a US Treasury debt of $10,024,724,896,912.49...that's $10.024 BILLION. Today's debt stands at $16,747,409,787,772.33...that's $16.747 BILLION. During President Obama's 4.8 years in office, the US Treasury's debt has risen $6.723 BILLION!
FOUR debt ceiling increases, and a $6.723 BILLION increase in US Treasury debt since October 1, 2009...and the President stands before the American public...BEFORE THE ENTIRE WORLD...and he makes the claim that raising the debt ceiling does not raise the debt? Seriously?
Did this man pass third grade math, or is he a bonafide moron? If the President honestly believes that the American public is dumb enough to believe this bald faced lie, he is in for a world of hurt. Can he not hear the entire WORLD laughing at him?
As we noted in the opening: The United States Treasury claims raising the debt ceiling simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past. If we have to borrow money to pay back money we have previously borrowed, are we "financing the debt", or are we really just adding to it?
Roll Over Plan: Treasury Needed to Pay Off Record $7.5T in Maturing Debt in FY 2013, Issued $8.3T New Debt; Increased Net Debt $777BBy Terence P. Jeffrey
During the same period, the Treasury turned around and issued another $8,323,949,000,000 in new Treasury securities.
The spread between the old debt held by the public that matured and was paid off during the fiscal year and the new debt that was sold to cover government spending over and above tax revenues, increased the net federal government debt held by the public by $777.223 billion during the fiscal year.
In the previous fiscal year, 2012, the Treasury had needed to redeem only $6,804,956,000,000 in Treasury securities, but then it needed to turn around and issue $7,924,651,000,000 in new securities—increasing the net debt held by the public by $1.119695 trillion.
And yet, the President insists that raising the debt ceiling DOES NOT raise the debt! Perhaps the President is confusing the debt with spending. Does he think the money that is borrowed is never spent? Does he think that just because "he says" that raising the debt ceiling doesn't raise the debt...it doesn't raise the debt?
I'm just a produce clerk, and from what I have observed, the President is either REALLY BAD at math, or a complete moron...or simply, he is just a LIAR. Gasp!
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