House faces tough vote on $1.9 trillion more debt
Written By: ANDREW TAYLOR
Facing a politically excruciating vote, House Democratic leaders are counting on new budget deficit curbs to help smooth the way for a bill allowing the government to go $1.9 trillion deeper into debt over the next year – or about $6,000 more for every U.S. resident.
The debt measure set for a House vote Thursday would raise the cap on federal borrowing to $14.3 trillion. That’s enough to keep Congress from having to vote again before the November elections on an issue that is feeding a sense among voters that the government is spending too much and putting future generations under a mountain of debt to do it.
Already, the accumulated debt amounts to $40,000 per person. And the debt is increasingly held by foreign nations such as China.
U.S. Debt to Hit Proposed Ceiling This Month
The US debt is on track to hit a congressionally proposed debt ceiling of 14.3 trillion dollars by the end of February, the Treasury said Wednesday, a day ahead of a key vote to raise it to that level.
“Based on current projections, Treasury expects to reach the debt ceiling as early as the end of February. However, the government’s cash flows are volatile, making it difficult to forecast a precise date,” the Treasury said in a statement.
The current limit on the public debt of the United States is 12.374 trillion dollars.
The US debt exceeded 12.349 trillion dollars on Monday, according to Treasury data.
The US House of Representatives will vote Thursday on whether to raise the US debt limit to a historic 14.3 trillion dollars, allowing the United States to borrow another 1.9 trillion dollars
Deficit imperils United States’ top credit rating
Moody’s warns US of credit rating fears
Fannie, Freddie Kept Off Budget, Dividends Counted
Written By: Dawn Kopecki
President Barack Obama’s budget blueprint for the next fiscal year excludes the $6.3 trillion in liabilities of government-controlled Fannie Mae and Freddie Mac and delays for a second time a decision on restructuring the mortgage-finance companies that were seized 17 months ago.
The companies may need $54.4 billion more in U.S. Treasury Department preferred stock purchases to stay afloat in the current year that ends Sept. 30, and $23 billion more for the next fiscal year, according to calculations made from the Obama administration’s 2011 budget proposal to Congress today.
“The administration continues to monitor the situation of the GSEs closely and will continue to provide updates on considerations for longer-term reform of Fannie Mae and Freddie Mac as appropriate,” the Obama administration said.
White House budget director Peter Orszag delayed a decision on whether to bring the companies’ $1.6 trillion in corporate debt and $4.7 trillion mortgage obligations onto the federal budget. As the director of the Congressional Budget Office, Orszag criticized the Bush administration for keeping the 2008 rescue of the government-sponsored enterprises off budget.
At the time, Orszag said “the degree of federal control over Fannie and Freddie is so strong, we are incorporating them into the federal budget.”
“We continue to be on track to release a statement in the very near future” on the GSEs, Housing and Urban Development Secretary Shaun Donovan said in a conference call with reporters today.
First-time jobless claims rise unexpectedly
Written By: Christopher S. Rugaber
New jobless claims rise unexpectedly to 480,000 as layoffs continue, jobs remain scarce
Next in Line for a Bailout: Social Security
Written By: Allan Sloan
Don’t look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.
A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.
Instead of helping to finance the rest of the government, as it has done for decades, our nation’s biggest social program needs help from the Treasury to keep benefit checks from bouncing — in other words, a taxpayer bailout.
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So Obama is going to free up the loans to small businesses?
The Banking System Doesn’t Need More Money
As a small business owner with a lot of friends who also own small businesses, I get tired of hearing all the news stories about how small business lending is going to get a shot in the arm from President Obama’s programs or any other source in the foreseeable future. Yesterday I listened to a speaker from one of the large banks talk about how many loans the bank was making, doing its share to get the country moving again. All the banks are simply not making business loans unless they are absolutely gold-plated. Period. This isn’t because they don’t want to make loans; it’s because they’re being criticized by examiners.
The regulators have made it clear to banks that they will be criticized for any loan where the borrower takes out any cash, regardless of the underlying fundamentals or collateral. This is nonsensical.
I understand that real estate is depressed, and that values are uncertain, and that tenants are moving, and all the other fundamentals.
The answer is simple: The regulators need to relax—not on every loan, but use some common sense!
I feel for all the small businesses in America that are crippled. They dont understand why their debt free building isnt worth anything for collateral on a loan, or why their receivables which have deteriorated only slightly are now not worth anything as collateral.
Here’s the simple truth from one of the “little guys” in a small business who sees the misery here in the street, and just can’t relate to our government’s plan to put more money in the system. There is plenty of money out there; someone just needs to stop sitting on it, after the regulators tell them it’s ok to lend some with solid underwriting policies.
This story has been truncated, see the whole story at: http://www.mrmissionpossible.com/blog/auto-salvage-consulting/obamas-30-billion-small-business-plan-more-money-isnt-needed/
Ron Sturgeon
5940 Eden
Ft. Worth TX 76117