Rep. Jeb Hensarling (R-Texas) says the Obama administration is using an accounting “gimmick” in its budget by not including the debt owed by mortgage firms Fannie Mae and Freddie Mac.
“The accounting gimmicks that are used today would make an Enron and WorldCom accountant blush,” Hensarling told reporters. “The American people know that under the policies of this administration—under the policies of this Congress—we are drowning in a sea of red ink.”
Hensarling, a member of the House Financial Services Committee, joined a group of House Republicans Tuesday in announcing the introduction of a bill that would require President Obama’s Office of Management and Budget to include the liabilities of Fannie and Freddie in the national debt calculation.
Sunday, February 28, 2010
The record U.S. budget deficit and debt should be viewed as a growing national security concern, U.S. Secretary of State Hillary Clinton told lawmakers yesterday.
“We have to address this deficit and the debt of the U.S. as a matter of national security, not only as a matter of economics,” Clinton said in testimony to the House Appropriations Subcommittee on State, Foreign Operations and related programs. The panel was reviewing the U.S. foreign affairs budget for fiscal year 2011.
President Obama used an Executive Order to create the Budget Deficit Panel, when it could not pass the Senate. Its appointees supposedly represent both Democrats, Republicans and Independents. Its name describes its duties. What can be done to alleviate a growing budget, that can lead to debt that will cripple the nation.
Over the course of almost four hours of testimony at the House financial committee yesterday, Mr. Bernanke was asked more about the country's record deficit and debt than any other subject, putting him in the middle of a debate that Democratic President Barack
Obamaand his Republican opponents in Congress appear eager to have but unwilling to resolve.
Mr. Bernanke stepped gingerly around queries that reflected the challenges of a country struggling to escape recession, yet were often political traps rigged to manipulate Mr. Bernanke into embarrassing one side or the other.
Seeking neutral ground, the Fed chief said it was "very, very important" that the administration and Congress come up with a credible plan to deal with the $1.6-trillion (U.S.) deficit. He stressed that the effort would pay immediate dividends by easing the minds of the investors who finance the government's operations.
For every dollar in debt that Americans have paid off since they started cleansing their balance sheets in mid-2008, the U.S. government has borrowed more than $7. All the hard work by consumers to replenish their piggy banks may be for naught if big government budget deficits play havoc with the economy.
The Obama administration projected that the federal debt could double over the next decade, prompting Moody's Investors Service to warn that the pristine AAA credit rating of the U.S. "could come under downward pressure."
Investors need to account for the burgeoning federal budget deficit as they save for retirement, college tuition or homes. Uncle Sam's borrowing binge could set off a surge in inflation and push down the dollar, both of which would erode the value of savings. It could also push interest rates higher, hammering the value of the more than $1 trillion in Treasury bonds owned by households directly or through mutual funds. Income taxes, already set to rise, might have to climb further to help close the government's budget gap.
Wednesday, February 24, 2010
The poll shows that 54 percent of voters say the deficit makes them feel worried, while 32 percent say they feel angry. Few -- 8 percent -- are okay with the new estimates that have the federal deficit growing to over $1.5 trillion dollars.
Furthermore, more voters -- 47 percent -- think President Obama's federal spending freeze proposal is just a gimmick that won't really help, while 37 percent, or almost four in 10, think it's an important step in reducing the deficit.
Monday, February 1, 2010
The key question is whether the President’s freeze represents a first small step towards real fiscal responsibility or an attempt to divert nervous taxpayers’ attention away from larger spending increases elsewhere. The President’s continued support for a trillion-dollar health care expansion as well as yet another expensive stimulus bill suggests the latter.