The United States
Federal Budget & National Debt

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Letter to the Editor - Big government Republicans

©Beaver County Times/Allegheny Times 2004, 07/08/2004

In his letter to the editor ("Look beyond war record," Friday), Rick Whitten wrote that President Bush promotes smaller government and more personal responsibility.

It's one thing for him to write and say that Bush and the Republicans promote smaller government, but a closer look at the numbers reveals that the Republicans are lying to the American people:

The federal budget during the last year of the Clinton administration was $1.9 trillion.
The federal budget just proposed by Bush and submitted to the Republican-controlled House of Representatives (responsible for spending) for fiscal year ending October 2005 was $2.4 trillion.

If passed, annual federal spending will have increased by $500 billion since Bill Clinton left office in January 2001.
This means that Bush and the Republicans have significantly increased the size of the federal government since January 2001.

The federal government went from an annual budget surplus under Clinton to an annual budget deficit of more than $500 billion under Bush and the Republican-controlled House.

At the same time, the national debt swelled from $5.6 trillion under Clinton to a whopping $7.25 trillion under Bush.
The national debt is expected to increase to more than $7.6 trillion sometime after Bush leaves office in January 2005.

All of this the direct result of the Bush and Republican tax cuts for the wealthy in 2001 and 2003.
Tax cuts do not automatically translate into a smaller government, just a larger debt and deficit.

Fourteen percent of the federal budget is now being used to pay the interest on the national debt, up from 8 percent during the Clinton administration.

The war on terrorism is only costing this country $225 billion.
Even with the increased spending for the war on terrorism, without the Bush tax cuts we would have had a federal budget surplus.

It's hard to be more personally responsible when the Republicans are destroying the economic fabric of this country.

Nikola (Nick) Drobac
Aliquippa

http://www.timesonline.com/site/news.cfm?newsid=12242471&BRD=2305&PAG=461&dept_id=478569&rfi=8

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To the Editor:

In 2003, I received from the Social Security Administration (SSA) a statement indicating that a little after my 66th birthday, I will begin collecting approximately $2,000 a month in SS benefits. Not counting the SS automatic Cost of Living Adjustments (COLA), I should collect approximately $24,000 per year, every year, until I die.

To date, my father has been collecting Social Security benefits for over 20 years. When he first retired from the LTV/Jones & Laughlin Steel Corporation of Aliquippa, Pa., his retirement plan included healthcare and a monthly pension paycheck twice that of his SS income.

Today, my father's healthcare is no longer paid for by the bankrupt LTV Corporation. In addition, as a result of the COLA, his monthly SS income is twice the monthly pension paycheck that he receives from the Pension Benefit Guarantee Corporation (PBGC). The PBGC is a U.S. government agency that took over the LTV Steel (Republic) pension fund.

This past week, Allan Greenspan dropped a bombshell with his statements concerning the financial condition of SS. Since then, there has been talk by prominent Republicans that Social Security should not be changed for anyone presently on or close to retirement (age of 55 or older).

I am under the age of 55. Like millions of other Americans, I have been paying into the SS System for over 25 years. Worse case scenario, if the Republicans eliminate SS, I will have lost my entire investment into SS. More specifically, like millions of other Americans who will lose their entire investment, I stand to lose over $500,000 in SS retirement income.

As a result of the negative effects of the global economy and free trade, Americans today are losing many of their benefits, and the standard of living for all Americans is declining. Today, about half of all Americans do not have a pension plan. That number is rising.

If SS can be preserved as former President Bill Clinton envisioned, and if I drop dead tomorrow never collecting a dime of the SS benefits, I will die having the satisfaction of knowing that my contributions will provide for (using the words in the Preamble of the Constitution) the prosperity and general welfare of those American that will need SS.

Last year about this time, I wrote the following letter to the editor of The Republican (also, see below): "Let's personalize this scenario. If you are in your 30s, 40s, or 50s, as a result of Bush's poor fiscal policies, the federal government will not have enough money to pay off the national debt and pay Social Security recipients."

When I go to the polling booth in Aliquippa on the first Tuesday in November, I will remember one thing: "Anybody but Bush."

Nikola (Nick) Drobac
Aliquippa, Pa.

The Rupublican News, 4 March 2004
http://www.therepublicannews.com/letters.html

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From the Cumberland Times-News Monday, April 28, 2003, page 8A Tax cut now means more taxes to pay in the future

To the Editor:

There have been 2 million jobs lost in the past two years. The Republicans once boldly stated that government cannot create jobs. They stated that only the private sector had the ability to create new jobs.

Now, President Bush has announced that his tax cut will create 1.4 million jobs. That would still leave 600,000 people without work.

Like his last tax cut in 2001 that failed to stimulate the economy and create new jobs, this tax cut proposed by Bush will increase the annual budget deficit thereby increasing the national debt.

In 1994 when the Republicans introduced their infamous contract with America, Newt Gingrich, Trent Lott, Rush Limbaugh, and other Republicans were pushing for a balanced budget amendment.

These and other Republicans demanded a balanced budget every year. The Republicans wanted a balanced budget even at times of war, recession, depression, etc. In short, “no matter what ... .”

Now around $6.4 trillion, this national debt must be paid. In addition, like your credit card bills, interest to be paid on the national debt will also increase as the national debt increases. Interest on the national debt cost American taxpayers $332.5 billion in 2002. This is not constructive; paying high interest rates on the national debt is like throwing money down the drain.

All of this means that future generations of Americans will have their taxes increased to pay for spending that will increase the national debt created by the Bush administration today. This will take more money out of the economy causing future economic slow downs. And to think that Bill Clinton had all of this under control.

Let’s personalize this scenario. If you are in your 30s, 40s, or 50s, as a result of Bush’s poor fiscal policies, the federal government will not have enough money to pay off the national debt and pay future social security recipients.

Knowing that more and more companies are eliminating or watering down their pension plans, and knowing that as many as 66 percent of all American will not have adequate funding in their pension plans, the result will be fewer and fewer people retiring.

This does not make me feel good about the new Bush tax cut plan.

Nikola (Nick) Drobac
Oakland, Maryland
http://www.times-news.com

References:

http://www.publicdebt.treas.gov/opd/opdint.htm

http://www.publicdebt.treas.gov/opd/opdpdodt.htm

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They say that a picture is worth a thousand words. I like this picture:

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PLEASE NOTE:
The nonpartisan Congressional Budget Office (CBO) provides the budget numbers to Congress.
Congress is required to use the CBO budget numbers.
Budget numbers developed by the White House Office of Management and Budget (OMB) are worthless.

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Governor George W. Bush and the Republicans are misleading the public concerning the budget surplus, the federal/national debt, and social security.

The "National Debt" is the sum total of all the federal budget deficits accumulated over the years. Presently, the National Debt is approximately $5.7 trillion.

From 1980 until 1988, then Republican President Ronald Wilson Reagan really ballooned the national debt by cutting taxes and increasing military spending (military spending is part federal spending).

Like any debt, the national debt needs to be financed. For the year 2000, the interest on the national debt amounted to approximately $330 billion. This accumulated interest needs to be paid annually and is one of the largest expenditures in the federal budget.

In reference to the above graphic, according to the Congressional Budget Office (CBO), federal budget surpluses are projected/estimated to a total of $4.6 trillion over the next ten years IF:
there are no tax cuts;
federal spending does not exceed the inflation rate; and,
there is moderate economic growth.

It only stands to reason that:
if the national debt is $5.7 trillion; and,
if the surplus only amounts to $4.6 trillion, then:
that still leaves a national debt of $1.1 trillion outstanding after ten years (this number is predicated upon the belief that congress will not vote any tax cuts, the economy continues to grow at a moderate rate, federal spending does not exceed inflation, etc.).

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The government pays off the national debt by collecting taxes from its citizens. Americans pay two types of taxes:
Income Taxes and Payroll Taxes

Of the $4.6 trillion dollar surplus, approximately $2.2 trillion is generated from income taxes. American taxpayers who pay this tax never receive a direct return on their investment.

Of the $4.6 trillion dollar surplus, approximately $2.4 trillion is generated from payroll taxes. Otherwise known as the FICA tax, American taxpayers who pay this tax will receive a direct return on their investment in the form of social security benefits.

I think that I would rather pay a payroll tax and get some direct return on my investment than pay an income tax and get absolutely no direct return on my investment.

The Republicans (who have campaigned on balancing the federal budget since the 1970’s) have not completely embraced the national debt as an issue.

Governor George W. Bush and the Republicans are proposing to do exactly what Ronald Reagan did in the 1980’s. Increase government spending on the military and cut taxes. This will, in effect, grow the national debt again, causing future generations of Americans to pay for Republican failed fiscal policies.

Governor George W. Bush and the Republicans are also proposing "Lockedbox" legislation.

See:
The Republican National Committee (RNC)
Republican policy, documents, and statements.

If that happens, then none of the $2.4 trillion generated from payroll taxes, will be applied to the national debt. Because all of the tax dollars are needed to pay off the national debt, this Republican proposal would kill any hopes of paying off the national debt in our lifetime.

Further, if Governor George W. Bush and the Republicans win the election and allows younger Americans to invest a portion of their social security in the stock market, that will cost Americans an additional $1 trillion dollars, draining additional revenue away from social security. That will further cause the national debt to increase at a faster rate and bankrupt social security.

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February 28, 2001

The CBO is now projecting a $5.6 trillion dollar budget surplus to be generated from 2002 through 2011:
$2.6 trillion would come from Social Security payroll taxes, and
$2.0 trillion would come from income taxes.

Of the $2.6 trillion dollar Social Security payroll taxes:
$2.0 trillion would be used to reduce the publicly held national debt.
$0.6 trillion ($6.0 billion) could either be used to reduce the national debt or it can be used shore up pension programs for future baby boomers retirees.

Of the $2.0 trillion dollar income taxes:
$1.6 trillion would be used to finance the tax cut.
$0.4 trillion ($6.0 billion) could either be used for emergency purposes.

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See also:
...Republicans are committed not just to creating the Social Security lockbox, but to crediting the amounts set aside to the accounts of individual workers.
From:
The Republican National Committee (RNC)
Republican policy, documents, and statements concerning Social Security.

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While in office, President Clinton asked Congress to place the interest savings from paying down the national debt into the Social Security Trust Fund. The White House estimated that action would add 54 years to the life of the Fund.

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