The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Another New Math?

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


It seems that Treasury Secretary Jack Lew may have created another form of “new math.”  According to CNSNews.com, the U.S. Treasury has not reported an increase in the debt for the entire month of August.  It has remained at the same level every day since May.  As CNSNews points out, “that makes 112 days that, according to the U.S. Treasury, the debt has been stuck at $16,699,396,000,000.”  You can see the Treasury’s Tuesday report here.  Meanwhile the infamous Dept Clock is at $16.9 trillion and climbing.

The debt amount is “steady” in spite of the fact the federal government’s deficit was $146 billion during the month of August and has run up a cumulative deficit of $753 billion since last October.

Is it “new Lew math?”  Some of us might remember new math from the sixties.  It was promoted in our schools as a response to the Soviet lead in mathematics, science, and space exploration.  For example, the binary system or base-two number system was taught as it represented the “on and off” found in digital electronic circuitry.  Only two digits are used ‘0’ and ‘1.’  So the number 1 is ‘1’ in binary but the number 2 is written as ’10,’ while the number 10 is ‘1010.’  But this can’t be the kind of math that Secretary Lew is using.  Plus, I don’t even want to think about what the number $16.7 trillion looks like in binary.

Note that the $16,699,396,000,000 figure is $25 million below the legal debt limit of $16,699,421,000,000.  As you may recall, back in August 2011, the Budget Control Act was enacted that provided for an increase in the debt limit and also established procedures to reduce the federal budget deficit from which the sequester was born.  Raising the debt limit has been a bone of contention for the past few years as many fiscal conservatives in Congress do not want to give the president and the Treasury secretary more borrowing authority to pay the nation’s obligations without reducing spending elsewhere in the federal government.  Congress has always limited federal debt but has modified the debt limit ten times since 2001.

Earlier this year, Congress passed H.R. 325, which suspended the debt limit until May 19, 2013 and set the debt limit at $16,699,421,000,000.  You can read more about the debt limit here.

As spending gets closer to the debt limit, it gets harder for Treasury to manage the government’s finances because revenue constantly ebbs and flows on a monthly basis.  As a result, Treasury has to take “unusual and extraordinary measures” to meet federal obligations.

In May, Secretary Jack Lew wrote a letter to Speaker Boehner stating that the Treasury would need to start taking extraordinary measures to meet the country’s obligations since they had reached the statutory deadline.  In the letter he lists the measures he would take such as “suspend the daily reinvestment of the Treasury securities held by the Government Securities Investment Fund (G Fund) of the Federal Employees’ Retirement System Thrift Savings Plan” or take “actions regarding investments under the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health Benefits Fund (PSRHBF).”  As one blog said, he is “taking from Peter to pay Paul.”  Lew later informed Speaker Boehner in a letter that any extraordinary measures he did take would be exhausted by mid-October.

And so here we are, weeks away from another showdown regarding the debt ceiling and a continuing resolution (CR) that must be passed by September 30, the end of the fiscal year.  A CR is necessary to keep the government open since no appropriations (spending) bills have been signed into law.

There is a debate among the House Republicans on what should be contained in the CR.  Many are calling for a defunding of Obamacare as part of the CR while others believe a better idea is to delay implementation of the individual mandate requiring people without insurance to participate in Obamacare as part of an agreement to raise the debt limit.  (You may recall the Obama Administration has delayed the employer mandate until 2015.)  The Congressional Budget Office has said delaying the individual mandate would save the government $35 billion over ten years.

Plus, we have the “Boehner Rule,” which means no debt ceiling increase without corresponding spending cuts – a policy CAGW agrees with.

However, Secretary Lew has said the Obama Administration will not negotiate with Congress on raising the debt ceiling.  But he can’t keep the debt level at $16,699,396,000,000 forever; even new math won’t allow that.  So the pressure is mounting for everyone involved.

Let the games begin.

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