The 2011 budget deal brokered by Democrats and Republicans is pushing the national debt to a level that exceeds the entire U.S. economy.
A latest Treasury report predicts that the national debt will be 102 percent of the country's gross domestic product before this year is over.The last time debt surpassed GDP was during World War II.
One of the key debt drivers was last December's Capitol Hill budget deal, which added an estimated $858 billion to federal deficits over a decade. Some $410 billion is being piled on this year alone, said the Congressional Budget Office.
While liberals blame the rising red ink on the extension of the Bush-era tax rates -- a policy that President Barack Obama and Democratic negotiators agreed to last year -- conservatives say continued government spending plays a bigger role in the spiraling costs.
U.S. Rep. Dave Camp, the lead tax writer in the House, told the Chicago Tribune this week that the latest Treasury numbers are a clear indication why any increase in the debt limit must be paired with significant spending reductions and real entitlement reforms.
Most recently, however, the Obama administration proposed a $2.4 trillion increase in the $14.6 trillion debt limit without any spending cuts. That proposal was roundly rejected by the Republican-controlled House.
Though Treasury Secretary Timothy Geithner and Wall Street financiers warn that the United States will lurch into default this summer unless Congress raises the debt limit, GOP leaders insist on "significant" budget cuts as a precondition for any lifting of the ceiling.
The debt-to-GDP ratio is more than statistical esoterica.
After examining data from dozens of countries over two centuries, economists Ken Rogoff and Carmen Reinhart found that when a nation's gross debt reaches 90 percent of its economy, it often loses about 1 percentage point of growth a year.
Despite the White House's claims of economic recovery, the U.S. private sector continues to slump and shrink amid rising debt. As the nation's unemployment rate rose again last month, up to 30,000 of the paltry 54,000 new hires were in minimum-wage seasonal positions at McDonald's, according to Morgan Stanley.
Meanwhile, Washington has been operating on a patchwork series of continuing spending resolutions. The Democratic-led Senate has neither proposed nor approved an actual budget in more than two years.
George LeMieux, a Florida Republican who is seeking to return to the Senate after serving there on an interim basis for 19 months, said, "It's astounding to think that all the work being done by Americans, and every single ounce of output, will be surpassed by the debt."
LeMieux, who has proposed a budget that takes federal spending back to 2007 levels, noted that outlays in the past 2 1/2 years totaled more than the eight previous years combined.
After Democrats suffered what Obama called a "shellacking" last November, conservatives are hopeful that a strict budget-cutting message will yield more victories in 2012.
"Let's be clear, the Democrat Party is not interested in a fiscally strong America," said Patricia Sullivan, head of the Florida Tea Party Network, a coalition of 69 tea parties around the state.
"The current administration has exploded entitlement programs in an effort to be 'compassionate,' but with certitude I can say debt is not compassionate."
For starters, Sullivan said she favors repealing the federal health-care law as part of any debt-ceiling adjustment.
Other tea partiers -- and even some newly elected Republicans -- see Washington's fiscal dithering as a bipartisan problem.
U.S. Rep. Allen West, R-Plantation, said, "If we continue down the road of subsequent two-week CRs (continuing resolutions), theres more uncertainty, more unpredictability."
Likening Congress's near-shutdown of the government earlier this year to a "Greek tragedy," West blamed "political gamesmanship" on the Hill and at the White House.
"We just don't look very competent to the American people," he told Fox News at the time.
Henry Kelley, chairman of the Fort Walton Beach Tea Party, said America's mounting fiscal debt is a pox on both parties.
"This is an appalling failure of leadership by all our elected officials," Kelley said.
Breaking down the numbers, Kelley estimatesthat Washington will be making $900 billion in debt service payments in three years, up from $250 billion now.
"Imagine 25 to 35 percent of your household income going toward interest -- not principal, just interest," he said.
Looking for a way out of the political and fiscal gridlock, Kelley favors "serious cuts" to entitlement and defense spending, and abolition of the current "progressive" income tax.
"It is time for a flat or FAIR [national sales] tax solution, not more changes to a broken tax code," he concluded.
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
