The federal budget deficit has taken an alarming turn for the worse.
In October, the first month of the federal fiscal year, the government ran a record deficit of $237.2 billion, close to the deficit the government ran for the entire year of 2006.
The deficit for this year could run over $1 trillion, dwarfing the record deficit of $454.8 billion we set in the fiscal year just ended. The accumulated budget deficits make up the national debt, which now stands at over $10.6 trillion.
The debt is more than an economic abstraction; it has practical political implications. Congress must appropriate the money to pay the interest on that debt each year, and that rapidly growing interest payment competes with other government programs.
Expect plenty of fireworks when the U.S. Congress meets this week for a post-election session focused largely on the ailing U.S. economy.
With Barack Obama preparing to become the 44th U.S. president on January 20, lawmakers will take another crack at providing fiscal relief to Americans and the U.S. auto industry, and elect leaders for the new Congress set to convene on January 6 with Obama’s Democrats in stronger control.
Lawmakers also will move to expel Republican Ted Stevens from the Senate if a protracted ballot count shows that Alaska voters returned the 84-year-old senator to Washington after his conviction for corruption last month.
President-elect Barack Obama on Saturday urged Congress to get moving next week on an economic rescue plan that would extend jobless benefits among other actions.
“If Congress does not pass an immediate plan that gives the economy the boost it needs, I will make it my first order of business as president,” Obama said in his Democratic Party’s weekly radio address.
The radio address was also videotaped and being posted online through a YouTube link to Obama’s transition Web site, http://www.change.gov. The president-elect plans to continue to record online videos of the addresses after he takes the oath of office Jan. 20.
Senior politicians, former ambassadors, top business leaders and lawyers will lead special teams into US government agencies to prepare the ground for Barack Obama’s presidency, his office said.
An army of specialists — including senior members of former president Bill Clinton’s administration — is set to fan out across in the Treasury, State Department and Pentagon.
Even the White House will be scrutinized as the 450-strong transition team goes through more than 100 departments and agencies.
The $700 billion bailout was rushed through Congress as a way of pumping liquidity into the financial system by letting the Treasury buy up so-called toxic assets, the most troubled loans on lenders’ books.
Well, that’s not what the Troubled Asset Relief Program is any more. Not too long after it passed, Treasury decided that it could put money into the system more effectively by purchasing bank stock directly.
For all the change supposedly blowing into Washington in this election, the face of the new Congress, aside from having around two-dozen more Democrats, won’t change all that much.
To be sure, there will be new people around the U.S. Capitol — about 60, in the House and at least nine in the Senate.
And based on victories declared for all but a dozen or so contests around the nation, Democrats will outnumber Republicans by 80-some votes in the House, the biggest majority since 1992, while holding a solid majority of at least 56 in the Senate.
Alaska Sen. Ted Stevens was convicted of seven corruption charges Monday in a trial that threatened to end the 40-year career of Alaska’s political patriarch in disgrace.
The verdict, coming barely a week before Election Day, increased Stevens’ difficulty in winning what already was a difficult race against Democratic challenger Mark Begich. Democrats hope to seize the once reliably Republican seat as part of their bid for a filibuster-proof majority in the Senate.
Congress and the Bush administration are beginning to agree on the idea of a second stimulus package but right now that’s as far as the agreement goes.
Congressional Democrats have been pushing for a second round of stimulus — although now it’s called "economic recovery" because "stimulus" sounds so wasteful. They got a big boost this week when Fed chairman Ben Bernanke endorsed the idea but in carefully couched terms — "consideration of a fiscal package by the Congress at this juncture seems appropriate."
If there were any doubts the House would pass the revised $700 billion bailout package, they were quickly resolved when the unemployment figures for September came out in advance of the vote.
The rate was unchanged at 6.1 percent but that masked the real damage to the economy — a loss of 159,000 jobs last month, the most in five years and far more than analysts expected. It was the ninth straight month that the economy shed jobs, bringing the total for the year to 760,000, a number the Associated Press called "staggering."
Bloated with pork, the massive $700 billion bailout bill passed the House Friday and President Bush immediately signed the legislation into law, turning to taxpayers to save government and Wall Street from themselves.
The pork added at least $120 to the final tab and victory from the same House that turned it down earlier in the week proved that all it takes is arm twisting, promises and outright bribes to turn controversial legislation into law.