Federal Debt

If you are a teacher in debt, there's good news and bad news. There are literally dozens of programs that could potentially help wipe out your student loans. But most of them have narrow requirements that may lock you out. Just ask Troy Dale, a high school counselor from Ellis, Kan. He and his wife have $23,000 in student loans that they've been paying down for nearly a decade. At their current rate, they'll still be paying off their student debts when their oldest child enrolls in college.

WASHINGTON - The federal deficit is shrinking more quickly than expected, and the government's long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report that could strengthen the Obama administration's hand in the budget battles with congressional Republicans. The budget office continues to say the federal government faces a long-range budget problem - mostly caused by the costs of an aging population - but its new forecast pushes the crunch point for that problem off into a considerably more distant future: well after the 2020 presidential election.

WASHINGTON - The federal deficit is shrinking more quickly than expected, and the government's long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report that could strengthen the Obama administration's hand in the budget battles with congressional Republicans. The budget office continues to say the federal government faces a long-range budget problem - mostly caused by the costs of an aging population - but its new forecast pushes the crunch point for that problem off into a considerably more distant future: well after the 2020 presidential election.

A federal jury in Los Angeles found an Anaheim physician and two others guilty this week for their roles in a $1.5-million Medicare fraud scheme involving power wheelchairs. At trial, federal prosecutors said that Godwin Onyeabor, 49, an officer at Fendih Medical Supply Inc. in San Bernardino, paid kickbacks to physician Sri J. Wijegunaratne, 58, and another healthcare professional, Heidi Morishita, 48, for fraudulent prescriptions for durable medical equipment. Officials said that as a result of this scheme, which ran from 2007 to 2012, those prescriptions were used to bill Medicare $1.5 million for false and fraudulent claims.

Re "And Now, Tackle the Debt," editorial, Feb. 3: I couldn't agree more. With a debt of 5.4 trillion, there can be no "surplus." The Reagan administration gets much of the credit for the debt, with massive defense spending. It is also possible that this ended the Cold War. If this is true, it is time to pay up. Any surplus should be applied to debt reduction. ROBERT J. DOYLE Newbury Park

One of the most fearsome statistics in the war against the federal deficit has always been the country's ratio of debt to gross domestic product. When this ratio reaches 90%, the argument goes, watch out -- lower economic growth is on the horizon. And that's scary, because that's where the U.S. has been heading. This idea comes from Harvard economists Ken Rogoff and Carmen Reinhart, who featured it in a 2010 paper and popularized it in a book entitled " This Time is Different : Eight Centuries of Financial Folly.

The Senate approved an $800-billion increase in the federal debt limit Wednesday, a major boost in borrowing that Sen. John F. Kerry and other Democrats said was the result of President Bush's fiscal policies. The mostly party-line 52-44 vote was expected to be followed by House passage today. Enactment would raise the government's borrowing limit to $8.18 trillion -- more than eight times the total federal debt that existed when President Reagan took office in 1981.

The House on Thursday passed a measure that would increase the federal government's borrowing power enough to keep it from going into default before late September. But raising the borrowing authority--an annual exercise on Capitol Hill as the government approaches its legal debt ceiling--faces complications in the Senate today. Sponsors of the original Gramm-Rudman deficit reduction law plan to attach a rider that would restore that law's threat of automatic spending cuts.

Democrats, eager to hammer home their assertion that President Bush's tax cuts are driving the country into a fiscal ditch, on Friday estimated government budget deficits will top $400 billion this year and approach $500 billion in 2004. A new round of tax cuts, coupled with a continuing U.S. occupation of Iraq, could help drive up the federal debt by $3.6 trillion through 2011, according to forecasts by House Budget Committee Democrats.

The nation's youths are being challenged to begin a national debate on the trillions of dollars in federal debt today's politicians would bequeath them. Frank Pia, an English teacher at Mamaroneck High School, laid the groundwork for the debate by pioneering an awareness program he hopes will spread to every high school in the country. "If budget reform is going to happen, it's going to have to come from the little guy standing up and saying, 'Enough is enough,' " Pia said.

Washington's tug of war over the federal budget has many wonders, but the biggest one of all must be the lengths to which politicians and pundits will go to deprive Granny and Grandpa of $30 a month. That's the amount by which benefits for the average Social Security retiree would be reduced by 2023 under a provision in President Obama's new budget. It might not sound like much to the president or fans of the proposal in both parties and the Washington commentariat. For the retiree trying to stretch an average monthly check of about $1,200 to cover housing, healthcare and every other necessity under the sun, it looms rather larger.

One of the most fearsome statistics in the war against the federal deficit has always been the country's ratio of debt to gross domestic product. When this ratio reaches 90%, the argument goes, watch out -- lower economic growth is on the horizon. And that's scary, because that's where the U.S. has been heading. This idea comes from Harvard economists Ken Rogoff and Carmen Reinhart, who featured it in a 2010 paper and popularized it in a book entitled " This Time is Different : Eight Centuries of Financial Folly.

Over the last two years, President Obama and Congress have put the country on track to reduce projected federal budget deficits by nearly $4 trillion. Yet when that process began, in early 2011, only about 12% of Americans in Gallup polls cited federal debt as the nation's most important problem. Two to three times as many cited unemployment and jobs as the biggest challenge facing the country. So why did policymakers focus so intently on the deficit issue? One reason may be that the small minority that saw the deficit as the nation's priority had more clout than the majority that didn't.

New budget proposals this week from influential members of the House Republican and Senate Democratic leadership are the stuff of political caricatures. House Budget Committee Chairman Paul D. Ryan (R-Wis.), last year's Republican nominee for vice president, reprised the spending-cut talking points from his failed campaign with little change and no apparent irony. Senate Budget Committee Chairwoman Patty Murray (D-Wash.), meanwhile, offered the outlines of a budget that increases taxes and spending, while doing little more than buying time on the entitlement programs at the heart of Washington's long-term problems.

Here's what is most maddening about the "Perils of Pauline" fiscal crises that President Obama and Congress have led us into during the last year: Both sides have known from the beginning what the final deals would look like, but neither side has been willing to budge before it had to. Take the current dust-up over sequestration. If you listen closely to Obama and leading members of both parties in the Senate, you'll find that they've already reached a rough consensus about how to shrink the federal deficit in a smarter way. They'll cut the same amount, but they'll spread it around differently and perhaps delay some of the cuts.

Now that two months have passed since the 2012 election, what does Rep. Paul Ryan think the voters' message was? It wasn't a rejection of the Romney-Ryan platform or of the "Ryan Budget" that would have turned Medicare into a voucher plan, Ryan told reporters on Wednesday. "I don't see this [election result] as a rejection of our principles," Ryan said at a Wall Street Journal breakfast. Instead, the message Ryan heard was that Republicans need to make it clear that they're not the party of the rich -- that they're as intent on ending poverty and increasing opportunity as Democrats.

Almost two decades after Ross Perot put his poster-sized charts on national TV, the federal deficit is becoming a political issue again. Republicans and conservative advocacy groups are trumpeting the latest projections from the White House Office of Management and Budget, which predict that Washington will run up $9 trillion in deficits over the coming decade, almost doubling the national debt. The Congressional Budget Office predicted that the debt, which amounted to less than 60% of U.S. economic output in 2000, would be more than 100% of GDP by 2023.

It's the federal budget equivalent of a nuclear standoff. Republican budget hawks are vowing that if President Clinton does not agree to their deep spending cuts, they will block a scheduled increase in the federal debt ceiling--a move that could theoretically force the government into default. In response, the Clinton Administration is warning Congress that even talking about such a move risks a fiscal "disaster," including panic in world financial markets and soaring interest rates at home.

President Obama's second inaugural address was a ringing affirmation of Democratic priorities and a resolute defense of federal safety-net programs. But there's little chance that the president will be able to move his second-term agenda through Congress unless and until Washington stops its relentless, all-consuming bickering over the federal budget. For the sake of his own aspirations, Obama should focus on something he paid scant attention to in Monday's speech: persuading Democrats and Republicans to agree on a plan to pare the deficit and bring the national debt under control.

In my Sunday column , I suggested that the most interesting part of President Obama's second inaugural address Monday may be the “steely notes” - reminders to his Republican adversaries that he won the presidential election by a significant margin and his description of what kind of mandate he thinks he has. But since I wrote those words, I've decided I'm just as interested in the flip side of the proposition: What kind of outstretched hand...