National Debt The federal government has incurred the highest debt in history.32 The deficit has been caused by the compounded factors of increased defense spending and decreased tax revenues. The increased defense spending includes homeland security and domestic reconstruction. Table II-1 Summary of Receipts, Outlays, and Surpluses or Deficits: 1990-2004 Fiscal Total Year Receipts 1990 1,031,969 1991 1,055,041 1992 1,091,279 1993 1,154,401 1994 1,258,627 1995 1,351,830 1996 1,453,062 1997 1,579,292 1998 1,721,798 1999 1,827,454 2000 2,025,218 2001 1,991,030 2002* 1,946,136 2003* 2,048,060 2004* 2,175,354 *Estimate On-Budget Surplus (Deficit) (277,819) (321,559) (340,492) (300,457) (258,929) (226,422) (174,098) (103,354) (30,016) 1,832 86,573 (33,422) (261,683) (258,753) (208,250) Off- Budget Surplus (Deficit) 56,590 52,198 50,087 45,347 55,654 62,415 66,588 81,364 99,195 123,690 149,819 160,526 155,499 178,583 194,509
Outlays 1,253,198 1,324,403 1,381,684 1,409,512 1,461,902 1,515,837 1,560,572 1,601,282 1,652,619 1,701,932 1,788,826 1,863,926 2,052,320 2,128,230 2,189,095
Surplus (Deficit) (221,229) (269,361) (290,404) (255,110) (203,275) (164,007) (107,510) (21,990) 69,179 125,522 236,392 127,104 (106,184) (80,170) (13,741)
Source: “Fixed Reproducible Tangible wealth in the United States; Revised Estimates for 1995-97 and Summary Estimates for 1925-97,” Survey of Current Business, Sept. 1998, Bureau of Economic Analysis, 3 Oct. 2003 www.bea.doc.gov/articles/NATIONAL/NIPARAL/1998/0998with.pdf.
There are two ways to look at the national debt: on-budget and off-budget. Onbudget reflects all income and expenditures of the federal government’s operating budget. On-budget items are used in the federal budgeting process. Off-budget reflects the cash on hand due to social security and other funds that require delayed payment. Off-budget items are not included in the normal federal budgeting process. Nonetheless, they are used in operations. Since 1990, on-budget surplus was only achieved in 1999 and 2000. With the change in presidency and the current recession, the government deficit increased. Although the off-budget balances indicate a surplus for all years, the combined balance of off-budget and on-budget indicates a deficit through 2004. With the war
32
Carl Hulse, “Warning on Hitting Debt Ceiling of $6.4 Trillion,” The New York Times on line 6 Feb. 2003, 7 Feb. 2003 www.nytimes.com/2003/02/06/politics/06HOUS.html.
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in Iraq and the current taxation and aid policies, this deficit will most likely continue past 2004. In February 2003, The New York Times reported that the federal government was approaching a $6.4 trillion national debt. According to the 1998 Bureau of Economic Analysis estimates (see Table II-1), the deficit for 2003 was predicted at less than $2.6 trillion.33 The budget deficit for the first half of fiscal year 2003 was $202 billion. This is $138 billion more than the same time period in 2002. 34 In February 2002, the Treasury Department urged Congress to increase the authority to borrow more funds. The only measures to pass the Appropriations Committee of the House and Senate in 2002, however, related to military spending. 35 By the end of 2003, defense spending is expected to be 20% higher according to the Congressional Budget Office. From October 2002 to April 2003, outlays for defense spending totaled $216 billion. This is up 15% from $187 billion in fiscal 2002.36
“Fixed Reproducible Tangible Wealth in the United states; Revised Estimates for 1995-97 and Summary Estimates for 1925-97,” Survey of Current Business, September 1998, The Bureau of Economic Analysis, 10 Feb. 2003 34 Luisa Beltran, “Deficit to Hit More Than $300 Billion.” CBS MarketWatch 10 May 2003, 11 May 2003 http://cbs.marketwatch.com. 35 Carl Hulse, “Warning on Hitting Debt Ceiling of $6.4 Trillion,” The New York Times on line 6 Feb 2003. Online. (6 Feb 2003) 36 Luisa Beltran, “Deficit to Hit More than $300 Billion.” CBS MarketWatch 10 May 2003, 10 May 2003 http://cbs.marketwatch.com.
33
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