NATION
Thursday, February 14, 2019
East Oregonian
A7
Should anyone worry about a $22 trillion national debt?
By MARTIN
CRUTSINGER
AP Economics Writer
WASHINGTON
—
The government surpassed
a dubious milestone this
week: Its debt topped $22
trillion for the first time.
Piles of federal debt have
been growing ever higher
for years, fueled by accu-
mulating annual deficits,
which themselves have been
driven by tax cuts, govern-
ment spending increases
and the mounting costs of
Medicare and Social Secu-
rity and interest on the debt
itself.
Under President Donald
Trump, the national debt has
topped $20 trillion (Septem-
ber 2017) $21 trillion (March
2018) and now $22 trillion.
As a presidential candidate,
Trump had assailed the $1
trillion annual deficits under
President Barack Obama
and had said that as presi-
dent he could wipe out all
the debt. Now, Trump is pro-
jecting that his own annual
deficits will top $1 trillion
for a time.
So just what is the
AP Photo/Pablo Martinez Monsivais, File
This June 8, 2017, file photo, shows the U.S. Treasury Depart-
ment building in Washington.
national debt, why does it
keep rising and how wor-
ried should we be about it?
Here are some questions and
answers:
Q: What makes up the
national debt?
A: It’s the total the gov-
ernment has borrowed
to finance its operations
beyond what it’s collected
over the years in reve-
nue from taxes and other
sources. The debt has
become a perennial source
of hand-wringing because
of, among other things, con-
cern that it will paralyze the
nation’s ability to finance
its future operations and
will hamstring generations
to come. Not since the late
1990s and early 2000s has
the U.S. government run a
surplus, a luxury that allows
it to reduce the debt and
finance other needs.
Q: How does the debt
differ from the deficit?
A: The deficit is the gap
between what the govern-
ment collects in revenue and
what it spends in any partic-
ular budget year. The accu-
mulation of these annual
budget deficits, combined
into one, represent the debt.
Because the government
typically spends more than
it collects, it must borrow
to make up the difference.
For the 2018 budget year,
which ended Sept. 30, the
deficit totaled $779 billion.
That was the largest gap
between spending and rev-
enue since 2012, when the
deficit was $1.1 trillion. That
year, during the Obama
administration, the govern-
ment had increased spend-
ing and cut taxes to continue
stimulating the economy in
the aftermath of the 2008
financial crisis and the Great
Recession.
Q: Who holds all the
debt the government has
borrowed?
A: One misperception is
that most of the U.S. debt
is held by foreigners — in
China, Japan and elsewhere.
But in fact America’s big-
gest creditor is ... America.
Sixty-two percent of the fed-
eral debt is held in the United
States — by the Federal
Reserve, the Social Secu-
rity system, banks, pension
plans, mutual funds, insur-
ance companies and indi-
vidual investors.
The largest single chunk
— $5.9 trillion, about one-
fourth of the total — is money
the government owes itself in
the form of trust funds. The
biggest is the Social Security
trust fund. The government
has drawn on this money,
which is earmarked to pay
Social Security benefits, to
finance other expenses. But
once that money is needed
to pay Social Security ben-
efits, the government must
replenish the amounts it bor-
rowed — with interest. If it’s
still running deficits, the only
way to do this is to take on
more debt.
The debt held by the pub-
lic — $16.2 trillion — is
about three-fourths of the
total. It’s held by investors in
both the United States and
abroad, ranging from indi-
viduals and pension funds
to foreign central banks.
China is the largest for-
eign owner of debt. It holds
roughly $1.2 trillion in Trea-
sury securities, followed by
Japan, which holds about
$1 trillion, according to the
latest accounting.
Q: With interest rates
still so low, how much con-
cern is there about the size
of the national debt?
A: That depends on
whom you ask. Many econ-
omists say they fear that
the rising debt represents a
time bomb that will eventu-
ally explode and derail the
economy. That is especially
true, they argue, in light of
projections that the annual
deficits are once again
headed above $1 trillion and
will be stuck at those lev-
els for years as the govern-
ment pays the rising costs of
Social Security benefits and
Medicare health insurance
for vast numbers of retiring
baby boomers.
But some economists
counter that with interest
rates so low, the govern-
ment shouldn’t be worried
about reducing the deficits
— at least not now. Instead,
they contend, the govern-
ment should focus on mak-
ing worthwhile public
investments in such areas
as education, infrastructure,
health care and environmen-
tal protections.
Judge finds Manafort lied to investigators in Russia probe
By CHAD DAY
Associated Press
WASHINGTON — For-
mer Trump campaign chair-
man Paul Manafort inten-
tionally lied to investigators
and a federal grand jury in
the special counsel’s Rus-
sia probe, a judge ruled on
Wednesday.
U.S. District Judge Amy
Berman Jackson’s deci-
sion was another loss for
Manafort, a once-wealthy
political consultant who
rose to lead Donald Trump’s
2016 campaign and now
faces years in prison in
two criminal cases brought
in special counsel Robert
Mueller’s investigation.
The four-page ruling
hurts Manafort’s chance
of receiving a reduced sen-
tence, though Jackson said
she would decide the exact
AP Photo/Kevin Wolf
Kevin Downing, Paul Manafort’s defense attorney, right,
walks to the entrance of federal court on Wednesday in
Washington. At left is attorney Tim Wang, another member
of the defense team for Manafort.
impact during his sentencing
next month. It also resolves
a dispute that had provided
new insight into how Muel-
ler views Manafort’s actions
as part of the broader probe
of Russian election inter-
ference and any possible
coordination with Trump
associates.
Prosecutors have made
clear that they remain deeply
Highlights of the bill to avoid shutdown
Associated Press
WASHINGTON — It’s
not just about the border
wall.
The border security
issues that sparked a 35-day
government shutdown are
but one element of a massive
$330 billion-plus spending
measure that wraps seven
bills into one, funding nine
Cabinet agencies, includ-
ing the departments of Jus-
tice, State, Agriculture and
Commerce. End-stage fights
over unrelated policy provi-
sions produced a deadlock,
so efforts to extend soon-to-
expire laws like the federal
flood insurance program
were dropped.
Highlights include:
A billion here, a billion
there: Most of the bill deals
with spending minutia such
as a $1 billion increase to
gear up for the 2020 census,
an almost 4 percent budget
increase for NASA and an
$11.3 billion budget for the
IRS. Most agencies are kept
relatively level.
Federal employee pay:
Trump has proposed a pay
freeze for civilian fed-
eral employees, but the
measure would guarantee
those workers a 1.9 percent
increase.
Big trucks: For fans of
the truly obscure, there’s a
provision to exempt sugar
beet trucks in rural Oregon
from length limits.
interested in Manafort’s
interactions with a man the
FBI says has ties to Russian
intelligence. But it’s unclear
exactly what has drawn
their attention and whether
it relates to election inter-
ference because much of
the dispute has played out
in secret court hearings and
blacked out court filings.
In her ruling Wednesday,
Jackson provided few new
details as she found there
was sufficient evidence
to say Manafort broke the
terms of his plea agreement
by lying about three of five
matters that prosecutors had
singled out. The ruling was
a rejection of Manafort’s
attorneys’ argument that he
hadn’t intentionally misled
investigators but rather for-
got some details until his
memory was refreshed.
The judge found that
Manafort did mislead the
FBI, prosecutors and a fed-
eral grand jury about his
interactions with Konstan-
tin Kilimnik, the co-defen-
dant who the FBI says has
ties to Russian intelligence.
Prosecutors had accused
Manafort of lying about sev-
eral discussions the two men
had including about a possi-
ble peace plan to resolve the
Russia-Ukraine conflict in
Crimea.
During a sealed hearing
last week, Mueller prosecu-
tor Andrew Weissmann said
one of the discussions— an
Aug. 2, 2016, meeting at the
Grand Havana Room club
and cigar bar in New York—
went to the “larger view of
what we think is going on”
and what “we think the
motive here is.”
“This goes, I think, very
much to the heart of what the
Special Counsel’s Office is
investigating,” Weissmann
said, according to a redacted
transcript of the hearing. He
added: “That meeting and
what happened at that meet-
ing is of significance to the
special counsel.”
The meeting occurred
while Manafort was still in
a high-ranking role in the
Trump campaign.
Weissmann said inves-
tigators were also inter-
ested in several other meet-
ings between Kilimnik and
Manafort including when
Kilimnik traveled to Wash-
ington for Trump’s inau-
guration in January 2017.
And Manafort’s attor-
neys accidentally revealed
weeks ago that prosecutors
believe Manafort shared
polling data with Kilimnik
during the 2016 presidential
campaign.
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