(CNSNews.com) - President Barack Obama said last Friday that the administration and Congress need to cut a deal by Aug. 2 to increase the legal limit on the federal debt “to make sure that America does not default.”
Yet, the actual accounting done by the U.S. Treasury Department shows that federal tax revenues have exceeded interest payments on the federal debt by 20-fold since the Treasury announced on May 16 that the federal government had hit the current legal limit on the national debt.
In fact, since the government hit the debt limit on May 16, the ongoing flow of federal tax revenue has been more than sufficient to cover the combined costs of federal spending on interest payments, Medicare, Medicaid, Social Security, the Veterans Affairs department and federal workers wages and insurance benefits (including wages and insurance benefits for military personnel).
Specifically, according to the Daily Treasury Statements, as of the close of business on May 16, the federal government had taken in $1.333454 trillion in tax revenues since the beginning of fiscal 2011. By the close of business on July 7, tax revenues for fiscal 2011 had grown to $1.629630 trillion. Therefore, between May 16 and July 7 the federal government took in a total of $296.176 billion in new tax revenue.
In that same time period, total interest payments on the national debt equaled $14.632 billion.
Thus, the new tax revenue of $296.176 billion the federal government took in between May 16 and July 7 was enough to pay the federal government’s $14.632 billion in interest obligations during that period 20 times over.
Also during that same period, the federal government’s combined expenditures for interest payments on the national debt, Medicare, Medicaid, Social Security, the Veterans Affairs department and federal workers wages and insurance benefits equaled $270.151 billion.
Thus, since hitting the legal limit on the federal debt on May 16, the federal government could have spent its $296.176 billion in new tax revenues to pay for its combined $270.151 billion in expenses for interest, Medicare, Medicaid, Social Security, Veterans Affairs and federal workers wages and insurance benefits and still had $26.025 billion in additional tax revenue to spend on other government activities.
For another $2.198 billion, for example, the government could have covered all Justice Department programs between May 16 and July 7—thus bringing its surplus revenue for the post-debt-limit period down to $23.827.
For another $11.233 billion, the government could have covered all its Housing and Urban Development programs between May 16 and July 7—thus bringing its surplus revenue for the post-debt-limit period down to $12.594 billion.
For another $6.988 billion, the government could have covered all its Federal Highway Administration programs between May 16 and July 7—thus bringing it surplus revenue for the post-debt-limit period down to $5.606 billion.
What it could not have done between May 16 and July 7, using the tax revenue that came in during that period, was pay the interest on the debt, maintain all the big entitlement programs (Medicare, Medicaid, and Social Security), plus veterans benefits, plus all wages and insurance benefits for federal workers (including military personnel) AND paid all the money that the government planned to pay Defense Department vendors.
During the period of May 16 to July 7, the government paid $56.734 billion to Defense vendors, according to the Treasury Department.
So if, from May 16 to July 7, the government had added the $56.734 billion paid to Defense vendors to the $270.151 billion in combined costs for interest, Medicare, Medicaid, Social Security, Veterans Affairs and federal workers wages and insurance benefits, the government would have had total costs of $326.885 billion for the period.
Given that it took in $296.176 billion in tax revenue for the period that would have put the government in the red by $30.709 billion.
Still, $30.709 billion borrowed over a period of 52 days works out to a rate of $590.55 million in borrowing per day--or $188.992 billion in borrowing per year.
That beats what the government is doing now by well over $1 trillion. According to the latest estimate of the Congressional Budget Office, this year’s deficit will reach $1.399 trillion.