U.S. National Debt Hits $22 Trillion — A New Record That’s Predicted To Fall : NPR

Despite being in the second-longest economic expansion since the post–World War II boom, the U.S. is projected to rack up national debt at rates not seen since the 1940s. Here, the U.S. Treasury Department’s main building is seen in Washington, D.C.

Mandel Ngan/AFP/Getty Images

hide caption

Despite being in the second-longest economic expansion since the post–World War II boom, the U.S. is projected to rack up national debt at rates not seen since the 1940s. Here, the U.S. Treasury Department’s main building is seen in Washington, D.C.

The U.S. government’s public debt is now more than $22 trillion — the highest it’s ever been. The Treasury Department data comes as tax revenue has fallen and federal spending continues to rise. The new debt level reflects a rise of more than $2 trillion from the day President Trump took office in 2017.

Despite being in the second-longest economic expansion since the post–World War II boom, the U.S. is projected to rack up annual deficits and incur national debt at rates not seen since the 1940s, according to the Congressional Budget Office.

Over the next 10 years, annual federal deficits — when Congress spends more than it takes in through tax revenues — are expected to average $1.2 trillion, which would be 4.4 percent of gross domestic product. That’s far higher than the 2.9 percent of GDP that has been the average for the past 50 years.

“Other than the period immediately after World War II, the only other time the average deficit has been so large over so many years was after the 2007–2009 recession,” the CBO said last month.

Annual deficits and the national debt rose to new heights under the Obama administration, and the trend has continued under President Trump.

As a share of the U.S. economy, the national debt stood at 78 percent of GDP in 2018. But the CBO says it will rise to 93 percent by the end of 2029. Again, those numbers put the ratio at levels not seen since just after World War II.

“By 2029, debt is estimated to reach $28.7 trillion,” the CBO said in January, referring to federal debt held by the public — a figure that doesn’t include the billions of dollars that the government owes to itself. In recent years, those intragovernmental holdings have hovered well above $5.5 trillion.

“This milestone is another sad reminder of the inexcusable tab our nation’s leaders continue to run up and will leave for the next generation,” reads a joint statement from former GOP senator Judd Gregg and former Democratic governor Ed Rendell, the co-chairmen of the nonpartisan group Campaign to Fix the Debt.

Calling on Congress to cut into the national debt, Gregg and Rendell said, “The fiscal recklessness over past years has been shocking, with few willing to step up with a real plan. We need responsible leadership to fix the debt, not a worsening of partisanship.”

The U.S. hit the new height despite Trump’s promises on the campaign trail that he would reduce America’s debt load. Almost exactly four years ago, he said that if the national debt topped $21 trillion by the end of President Obama’s term in office, “Obama will have effectively bankrupted our country.”

The national debt nearly doubled under Obama: It was $10.6 trillion when he took office and was nearly $20 trillion when he left. The rise has been blamed on factors from the Great Recession to wars in Iraq and Afghanistan and rising costs of Social Security and Medicare. Many of those pressures still exist today.

Trump has long said that he knows how to solve America’s debt problem. As he said in 2015, “When you have $18-$19 trillion in debt, they need someone like me to straighten it out.”

“@FoxNews: @realDonaldTrump: “When you have $18-$19 trillion in debt, they need someone like me to straighten it out”

— Donald J. Trump (@realDonaldTrump)

On Jan. 20, 2017, the total amount of outstanding public debt was $19.9 trillion. On Monday, it surpassed $22 trillion. That’s despite Trump saying in August of last year that new tariffs on imported goods would let the U.S. “start paying down large amounts” of the national debt.

“The president is very much aware of the realities presented by our national debt,” White House budget director Mick Mulvaney said last October, when the government said the federal deficit had ballooned to $779 billion in the most recent fiscal year.

Mulvaney said the deficits would be offset by gains in economic growth; he also called on Congress to rein in what he called “irresponsible and unnecessary spending.”

The new data comes as Washington copes with the fallout of the longest government shutdown in U.S. history — and tries to avoid another shutdown by reaching a deal on Trump’s demands for a wall along the U.S. southern border.

The U.S. is entering new debt levels more than a year after Trump signed a $1.5 trillion tax cut that cut the top corporate tax rate from 35 percent to 21 percent. The legislation also gave most U.S. taxpayers at least a small break, although the largest benefits went to the wealthiest Americans.

Republicans in Congress and the White House had predicted their late 2017 tax cut would boost economic growth and help create jobs. While the cut prompted the CBO to raise its GDP and job growth projections, as NPR’s Susan Davis has reported, “GDP growth is forecast to slow down after 2020, in part because all of this economic stimulus is likely to drive up interest rates.”

The CBO predicts federal spending will rise from 20.8 percent of GDP in 2019 to 23 percent in 2029, with programs such as Social Security and Medicare expected to spend more to cope with an aging population and rising health care costs.

Providing historical context for the current pattern, NPR’s Scott Horsley recently reported:

“The deficit typically grows during recessions — when tax receipts shrink and demand for food stamps and other government assistance rises — then falls during good times. The current spike in the deficit at a time of strong economic growth and low unemployment represents a break with that historical pattern.”

This content was originally published here.


Philando Castile Charity Covers Entire School District’s Lunch Debt

Two years after he was fatally shot by a police officer in Minnesota, Philando Castile is still helping students afford lunch.

A charity created in Castile’s honor has paid off the lunch debt for every student in the 56 schools in the St. Paul Public School District, including the school where Castile worked as a cafeteria supervisor.

Castile had worked as a cafeteria supervisor at the J.J. Hill Montessori Magnet School in St. Paul for two years at the time he was killed.

Families said students at the school took his death especially hard.

In 2017, around the anniversary of Castile’s death, families of children at J.J. Hill told the Pioneer Press that Castile often high-fived students and helped them with their lunches.

“It’s one thing to say he was a good guy, and it’s another thing to know he was a good guy,” Eisen Ramgren, a student’s parent, told the St. Paul newspaper.

Pam Fergus, an educator who launched the charity, told CNN she delivered a $35,000 check to the St. Paul Public School District this week. The charity, which had an original goal of raising $5,000, now has more than $117,000 in donations, according to the YouCaring page. The funds will continue to pay for student lunches “for years to come,” Fergus wrote in a fundraising update.

Fergus told Fox 9 News that Castile was known at his school for paying for students’ lunches when they couldn’t afford it.

“Philando was famous for that,” she said. “His mother told me that every day he would call her after leaving his job at J.J. Hill and talk about the kids. Another kid didn’t have the money in his account, so Philando would take $3 out of his pocket and buy that kid’s lunch for the day.” 

In July 2016, St. Anthony Police Officer Jeronimo Yanez shot and killed Castile after pulling him over for a broken taillight in a St. Paul suburb.

Yanez maintained that he thought Castile was reaching for the weapon, while Diamond Reynolds, Castile’s girlfriend who filmed the traffic stop from the passenger seat, said he was reaching for his wallet.

Footage of the incident from a police dash cam and Reynolds’ camera shows Castile calmly telling Yanez he had a firearm. After the shooting, Reynolds said Yanez had just asked Castile for his license and registration, adding that Castile was licensed to carry.

Now that the charity has reached well over its fundraising goal, Fergus hopes it can continue to raise money for more schools in Minnesota. 

“I don’t know how much it would take to help the whole state of Minnesota,” Fergus told CNN. “There is no end goal. Basically, I want a million bucks in there.”

This content was originally published here.


$1.25 TRILLION: Sen. Elizabeth Warren Proposes Using Taxpayer Money To Pay Student Debt | Daily Wire

Sen. Elizabeth Warren wants to use taxpayer money to “cancel” hundreds of billions of dollars in student-loan debt and offer debt-free college for millions more, which would cost $1.25 trillion over the next decade.

In a blog post on Medium, the Massachusetts Democrat said the “huge student loan debt burden” is “crushing millions of families and acting as an anchor on our economy. It’s reducing home ownership rates. It’s leading fewer people to start businesses. It’s forcing students to drop out of school before getting a degree. It’s a problem for all of us.”

The first step in addressing this crisis is to deal head-on with the outstanding debt that is weighing down millions of families and should never have been required in the first place. That’s why I’m calling for something truly transformational — the cancellation of up to $50,000 in student loan debt for 42 million Americans.

My plan for broad student debt cancellation will:

Cancel debt for more than 95% of the nearly 45 million Americans with student loan debt;
Wipe out student loan debt entirely for more than 75% of the Americans with that debt;

Substantially increase wealth for Black and Latinx families and reduce both the Black-White and Latinx-White wealth gaps; and

Provide an enormous middle-class stimulus that will boost economic growth, increase home purchases, and fuel a new wave of small business formation.

“Experts estimate my debt cancellation plan creates a one-time cost to the government of $640 billion. The Universal Free College program brings the total cost of the program to roughly $1.25 trillion over ten years,” Warren wrote.

But Warren says “the actual costs of these new ideas are likely to be even less than that,” and claims “we can fully cover the cost of these ideas with revenue from my Ultra-Millionaire Tax on the wealthiest 75,000 families in the country — those with fortunes of $50 million or more.”

The Wall Street Journal reported that would entail “an annual 2% levy on wealth above $50 million and an additional 1% tax on wealth above $1 billion.”

The senator, who is running for president in 2020, also proposes using $50 billion in taxpayer funds for historically black colleges and universities, known as HBCUs. And she wants to “prohibit public colleges from considering citizenship status” when making admissions decisions.

In addition, Warren wants to phase out federal money that now goes to for-profit schools. “After an appropriate transition period, ban for-profit colleges from receiving any federal dollars (including military benefits and federal student loans), so they can no longer use taxpayer dollars to enrich themselves while targeting lower-income students, servicemembers, and students of color and leaving them saddled with debt,” she wrote.

Student loan debt has more than doubled over the last 10 years to $1.5 trillion, and some economic experts say that is driving the declining home ownership rates among young adults.

This content was originally published here.


Elizabeth Warren: Let’s Cancel Student Loan Debt And Make College Free

U.S. Senator Elizabeth Warren (D-MA) (Photo Credit: BRENDAN SMIALOWSKI/AFP/Getty Images)

Elizabeth Warren wants to cancel your student loan debt and make college tuition-free.

Here’s what you need to know.

Proposal: Cancel Student Loan Debt 

U.S. Senator Warren (D-MA), who is also a 2020 presidential candidate, proposed Monday an ambitious student loan forgiveness plan that could benefit tens of millions of Americans. The plan would cancel student loan debt for more than 95% of borrowers, and would entirely cancel student loan debt for more than 75% of Americans with student loan debt. Warren believes that her plan would reduce the wealth gap in America and provide an economic stimulus to the middle class to increase home purchases and help start small businesses.

According to the latest student loan debt statistics, there are more than 44 million Americans who collectively owe $1.5 trillion in student loan debt. Today, according to personal finance site Make Lemonade, student loan debt is now the second highest consumer debt category – second only to mortgages and higher than credit card debt and auto loans. By 2023, 40% of student loan borrowers may default on their student loans.

Specifically, Warren’s plan for student loan debt forgiveness would:

Importantly, Warren’s plan offers no student loan debt cancellation to borrowers with a household income above $250,000, which she says is the Top 5% of earners. There would also be “phase-outs” based on income. The $50,000 cancellation amount would phase out by $1 for every $3 in income above $100,000. According to Warren, for example, “a person with household income of $130,000 gets $40,000 in cancellation, while a person with household income of $160,000 gets $30,000 in cancellation.”

Proposal: Make College Tuition-Free

Specifically, Warren’s plan for free universal free college would:”

Student loan debt is crushing millions of families,” Warren tweeted. “That’s why I’m calling for something truly transformational: Universal free college and the cancellation of debt for more than 95% of Americans with student loan debt.” In a separate tweet, Warren wrote: “This is the kind of big, structural change we need to make sure our kids have opportunity in this country.”

How These Proposals Would Be Funded

How would Warren pay for this student loan forgiveness plan and universal free college plan?

Answer: with an Ultra-Millionaire Tax.

Warren’s Ultra-Millionaire Tax would include a 2% annual tax on the 75,000 families in the U.S. who have at least $50 million in net worth.

Warren also wants to invest an additional $100 billion in Pell Grants over the next 10 years and expand eligibility for Pell Grants to include more lower- and middle-income students.

Pre-order Zack Friedman’s highly-anticipated new book, . Zack is also Founder & CEO of Make Lemonade.

This content was originally published here.


Blame Republican tax cuts for skyrocketing federal deficits and debt

Don’t believe Trump team misdirection. We’re piling up debt during good economic times, and it’s all because of last year’s Republican tax cuts.

gross domestic product since 2013.

The bottom line 2018 deficit number is significant because it occurred during good economic times, when the federal deficit typically falls rather than spikes. But that’s not the most important story. A simple analysis of what Treasury reported shows that virtually the entire deficit increase was because the tax cut enacted in December reduced revenues substantially.

GOP tax cuts are expanding the deficit

Treasury said revenues grew from 2017 to 2018 by slightly less than $14 billion. Given the federal government’s overall $113 billion deficit increase, you might assume that the deficit rose because spending was $127 billion higher.

Overall federal outlays did increase by $127 billion compared with what was actually spent in 2017, but that’s the wrong comparison. The right comparison is the total tax revenue the government would have collected under the old tax law versus the new one.

The Congressional Budget Office estimated fiscal 2018 revenue would be $3.5 trillion under the laws that were in place before President Donald Trump signed the GOP tax cut bill. The actual amount Treasury reported Monday was $202 billion less. That $202 billion would have more than covered the $127 billion in extra spending in 2018.

This comparison, to tax revenues that were expected had the laws stayed the same, unambiguously shows that virtually all of the federal deficit increase that occurred from 2017 to 2018 was because of the new cuts in corporate and individual taxes. Had the tax changes not been enacted, the federal deficit in 2018 would have dropped to well below $600 billion, rather than rising to close to $800 billion.

Four things about this are most troubling. First, both Treasury and CBO expect the deficit to keep spiking. Compared with the CBO pre-tax bill baseline, 2019 revenues will be $263 billion below what they would have been if rates had stayed the same. Treasury’s projected 2019 deficit would be just above $800 billion rather than close to $1.1 trillion.

Second, not content with how much they’ve already increased the deficit, Congress and the White House are seriously considering passing another big tax cut during the lame duck session after the midterms. That will increase it even more.

The House passed this bill just before it recessed for the midterm elections, and the scuttlebutt I hear from budget insiders is that Republican leaders are seriously considering misusing the congressional budget process so no one may filibuster the next deficit increase. In its current form, this new tax bill will reduce revenues by another $630 billion over the next 10 years.

Third, unlike the recession-caused trillion dollar federal deficits of the Obama years that fell precipitously when the economy improved, these deficits are the result of permanent changes in federal revenues caused by the tax law. Not only does this put the constantly promised-but-never-achieved goal of balancing the federal budget in 10 years out of reach, it makes even the projection of a balanced budget into the political equivalent of a practical joke or a hoax.

And fourth, Treasury Secretary Steven Mnuchin and Budget Director Mick Mulvaney are either in denial about these numbers or think no one notices when they say high spending rather than low revenue is why the deficit is rising so precipitously.

Mnuchin and Mulvaney should be ashamed

Last week, Mnuchin said it was the Democrats’ demand for more spending on health care and education that was the sole reason the deficit was increasing.

Mnuchin and Mulvaney should both be embarrassed by these obvious attempts at budget misdirection, but Mnuchin should be especially ashamed. It is Treasury, the department he leads with a staff that reports to him, that has exposed the tax law as the real reason the federal deficit is increasing so steeply.

Stan Collender teaches federal budgeting at the McCourt School of Public Policy at Georgetown University and is the founder of . Follow him on Twitter: @thebudgetguy

Read or Share this story:

This content was originally published here.


Texas Church Abolishes Over $10 Million in Medical Debt for Local Families

During their Easter service on April 1, 2018, Pastor Stephen Hayes of Covenant Church in Carrollton, Texas revealed that the congregation alone helped to relieve over 4,000 local families of their medical debt.

Because Hayes himself understands firsthand what it’s like to be impaired with medical debt, as he was hit by a car at 17 years old and spent 12 days in the ICU, this hit close to home for him. At the time, his family was aided in paying off the medical bills with the help of his church family. He wanted to do the same for others.

Usually, leading up to Easter Sunday, the church spends upwards of $100,000 to in order to promote their services. They’ve purchased radio ads, TV commercials and even billboards, which costs close to $30,000 per month. This year, they decided to take that money and spend it differently.

Hayes suggested sending out letters that said something along the lines of: “We are Covenant Church and we are local in this area and can serve you in any way, and we would love to be your church. But even if we don’t get to meet you, just know that God loves you.”

The medical debt money first went to local veterans who were suffering injuries caused by war. After every veteran in the 20-mile radius of each campus was covered, the rest of the money went to other families.

Now, 4,229 families in the Carrollton, Texas area will receive letters informing them that their medical debt has been completely paid off. The money that the congregation offered up ended up paying off $10,551,618 in total debt.

After the reveal of the total amount of debt abolished, Hayes reminded his congregation that they, too, have received similar letters, referencing to John 19:30 when Jesus said, ‘It is finished.’

“That’s your letter in the mail,” Hayes preached. “If you can imagine what those people this week will be feeling when they receive the letter that you sent them saying their debt is paid. I prayed 100-fold that [is how] you would feel in the reading the letter He wrote to you in the book of John 19:30. Hey, your debt of sin is paid. You are covered.”

This content was originally published here.


Department of Education blocks states on student loan debt collectors

Get immediate alerts on all breaking news, delivered via Facebook Messenger. Sign up here.

Education Secretary Betsy DeVos has a message for Massachusetts Attorney General Maura Healey and officials in other states hoping to rein in student loan debt collectors: Back off.

The US Department of Education announced Friday that it considers state efforts to regulate collection companies — many of which have been accused of unfair consumer practices — inappropriate and that they “undermine” federal authority.

The notice from the Education Department and DeVos infuriated consumer advocates and Healey, who called it a move to protect debt collectors at the expense of student loan borrowers across the country.

“Secretary DeVos can write as many love letters to the loan servicing industry as she wants,” Healey said in a statement. “The last thing we need is to give this industry a free pass while millions of students cannot afford to pay their loans.”

Get Fast Forward in your inbox:

Forget yesterday’s news. Get what you need today in this early-morning email.

The federal education agency in particular singled out Healey’s ongoing lawsuit against the Pennsylvania Higher Education Assistance Agency as an example of state officials overstepping their authority. The federal government has stepped in on behalf of the debt servicer in this state case.

Healey has alleged that the servicer, which does business as FedLoan Servicing, violated state and federal laws by causing teachers and others to lose benefits and financial help under the Public Service Loan Forgiveness program. Under the program, students can have loans forgiven after 10 years of public service, a benefit designed to encourage graduates to take jobs in government and nonprofits.

Legislators in other states have also adopted new laws requiring these loan collection companies to get state licenses, meet certain business standards, and comply with investigations launched by state authorities.

These new state requirements “may conflict with legal, regulatory and contractual requirements, and may skew the balance the department has sought in calibrating its enforcement decisions to the objectives of the program,” the Department of Education said in its notice.

They may also cost taxpayers more money by piling regulations onto these companies, who are likely to pass on the cost to the Education Department, DeVos said.

The Department of Education, which has issued more than $1 trillion of the $1.4 trillion in student loan debt owed by Americans, hires companies such as FedLoan Servicing and Navient to collect payments.

Federal and state investigations have found significant problems in the collection practices and Education Department oversight.

For example, an investigation by states and the Consumer Financial Protection Bureau alleged that Navient encouraged struggling consumers into a short-term forbearance program that required less paperwork for the company but meant that borrowers who postponed payments accrued more interest on their debt. Many of these borrowers could have instead qualified for the income-driven repayment plan, which would have lowered their monthly bill and put them on a potential path for loan forgiveness.

Authorities said Navient offered its employees incentives to get borrowers into forbearance plans, a move that allowed the company to collect $4 billion in interest charges over five years. Navient has denied any wrongdoing, but several states have also sued the company.

The Education Department, which contracts with these companies, hasn’t always been the best enforcer of consumer laws, said Persis Yu, a staff attorney at the National Consumer Law Center, a Boston-based organization that operates a borrower assistance project.

“People have lost years in their payments, and they will be paying thousands of dollars more because of the delays and the errors made by these companies,” Yu said. “Having more cops on the beat to look out for student loan borrowers [is] better.”

Healey said her office plans to continue its investigations into student loan collection companies, but consumer groups worry that state authorities may be discouraged by the additional hurdle put in place by the Education Department’s notice that federal authority trumps state guidelines.

Deirdre Fernandes can be reached at Follow her on Twitter @fernandesglobe.

This content was originally published here.


Michael Avenatti is hit with $4.85-million judgment for unpaid debt as court orders eviction of his law firm

Michael Avenatti, the lawyer for porn actress Stormy Daniels, was hit with a personal judgment of $4.85 million Monday for his failure to pay a debt to a former colleague at his longtime Newport Beach firm.

Less than an hour after his defeat in the Los Angeles lawsuit, the firm, Eagan Avenatti, suffered a setback at a trial in Santa Ana: The Irvine Co. won a court order evicting Avenatti and his staff from their offices for skipping the last four months of rent.

The twin blows came as Avenatti was heading to New Hampshire for his third visit to the state that kicks off the 2020 presidential primaries. The celebrity lawyer is exploring a run for the Democratic nomination. His troubled financial history could emerge as a significant campaign issue if he joins the race.

The personal judgment against Avenatti by Judge Dennis J. Landin in Superior Court in Los Angeles is his latest in a series of courtroom losses in a protracted dispute with Jason Frank, the former colleague.

Eagan Avenatti emerged from federal bankruptcy protection in March after Avenatti promised that it would pay millions of dollars to Frank and other creditors, including the Internal Revenue Service. It has defaulted on nearly every payment that was due.

No one has pursued Avenatti more relentlessly than Frank, who has been fighting in federal court to collect on a $10-million judgment that he won against the firm in May.

“My client has had an awful lot of money owed to him for a lengthy period of time,” said Frank’s attorney, Eric George, “and it has been delayed through one tactic or another. Today, finally, the right thing happened.”

Avenatti was the managing partner of Eagan Avenatti since its founding in 2007.

He recently told a U.S. Bankruptcy Court judge that his other firm, Avenatti & Associates, wholly owned by Avenatti, had acquired 100% of the equity in Eagan Avenatti, buying out his minority partner, Michael Eagan of San Francisco.

But Avenatti told the Los Angeles Times on Monday that he hadn’t owned Eagan Avenatti for months. He did not name the new owner.

“Any judgment issued against me will be deducted from the over $12 million that Jason Frank owes me and my law firm Avenatti & Associates as a result of his fraud,” Avenatti said by email.

No court has found Frank engaged in fraud, and Avenatti is not pursuing any court case alleging that he did. When Frank and two others left Eagan Avenatti to form their own firm, some clients went with them, angering Avenatti.

Frank alleges that Eagan Avenatti cheated him out of millions of dollars in compensation.

As part of its bankruptcy settlement, Eagan Avenatti agreed to pay Frank $4.85 million. Avenatti guaranteed that if the firm missed the deadlines for making the payment, which it did, he would personally be required to pay Frank.

To enforce the personal guarantee, Frank sued Avenatti, and on Monday he won the case.

In matters involving Daniels and President Trump, the adult-film actress is represented by Avenatti & Associates, which operates out of the same offices as Eagan Avenatti and uses the same attorneys. Daniels is trying to void a nondisclosure agreement that bars her from discussing her alleged affair with Trump.

In the Santa Ana trial, 520 Newport Center Drive LLC, an arm of the Irvine Co., alleged that Eagan Avenatti missed $213,254 in rent payments over the last four months for its ocean-view suite on the 14th floor of an office building at Fashion Island.

Nobody from Eagan Avenatti showed up for the trial.

Superior Court Judge Robert J. Moss ordered the firm to vacate the premises and pay the landlord the full amount of overdue rent. He also canceled the remaining three months of the lease. If the firm fails to move out, it could take a few weeks for the Orange County Sheriff’s Department to enforce the eviction.

In court papers, the firm claimed it deducted the cost of needed repairs from its rent payments but did not receive proper credit.

The Irvine Co. denied that the offices needed any serious repairs. And the lease, signed by Avenatti, says the tenant “understands that it shall not make repairs at landlord’s expense or by rental offset.”

In July, Eagan Avenatti paid the monthly rent of $52,235, but the check bounced, according to the landlord.

1:45 p.m.: This article was updated with additional details on the court cases.

11:50 a.m.: This article was updated with background on Michael Avenatti exploring a run for president and the Stormy Daniels litigation against President Trump.

11:15 a.m.: This article was updated with comment from Michael Avenatti, background on Eagan Avenatti and the eviction judgment.

This article was originally published at 10:15 a.m.

This content was originally published here.

Shopping Basket