Washington Flirting With Debt Crisis… Federal Spending Sets Record

Washington is flirting with a debt crisis. No one has a plan to stop it

Washington (CNN)The US government is hurtling toward a potential financial crisis, and no one in Washington seems to know how to stop it.

As lawmakers trade fire over contempt votes and impeachment, there’s been no progress toward reaching a budget agreement or extending the federal government’s ability to borrow before September, when the money runs out. That’s raising the ugly prospect of more than $100 billion in mandatory cuts as well as an unprecedented default on US debt — a situation that could trigger a worldwide economic catastrophe.
It’s a mess everyone knows is coming, and yet no one seems to have a plan — at least at the moment — for averting disaster.
“It’s one of those cartoonish anvil-over-head moments,” one senior GOP congressional aide told CNN. “We all look around knowingly like ‘Man, we’re about to get crushed by this,’ but nobody’s really sure how to get out from underneath it right now.”
Even the battle lines aren’t totally clear at this point. There’s brewing frustration between President Donald Trump and congressional Republicans, as well as questions about what House Democrats will agree to.

The fight over disaster relief

The latest sign of the dysfunction gripping Congress came this week, when Republicans and Democrats continued to flounder in months-long negotiations over disaster aid for states recently hit by hurricanes, flooding, and wildfires, typically a subject that can easily win bipartisan consensus but has instead repeatedly fallen apart over unrelated issues.
“If we can’t do this, what the heck can we do on something much bigger?” Senate Appropriations Committee Chairman Richard Shelby asked after a phone call with White House chief of staff Mick Mulvaney. “I hope this is not a preview of coming events.”
The Alabama Republican said he told Mulvaney that the inability to pass the aid bill was not a good sign for the tougher negotiations ahead.

 

(CNSNews.com) – The federal government spent $2,573,708,000,000 in the first seven months of fiscal 2019 (October through April), setting an all-time record for real federal spending in the first seven months of a fiscal year, according to data published in the Monthly Treasury Statements.

Prior to this fiscal year, the most that the federal government had ever spent in the first seven months of a fiscal year was in fiscal 2011, when it spent $2,476,257,690,000 in constant April 2019 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).

Federal spending in the first seven months of this fiscal year exceeded the previous record by $97,450,310,000.

At the same time that the Treasury was spending the most it has ever spent in the first seven months of a fiscal year, it also ran a deficit of $530,870,000,000.

With April 15 as the deadline for filing tax returns, the month of April is ordinarily a boom time for federal tax collections—and this year was no exception. The Treasury collected $535,545,000,000 in total taxes during the month compared to $228,811,000,000 in March and $167,265,000,000 in February.

But even with the April boost in tax revenue, this fiscal year’s real total tax revenues, real individual income tax revenues, and real corporation income tax revenues have lagged behind last year’s numbers.

In the first seven months of this fiscal year, the Treasury collected $2,042,838,000,000 in total taxes. In the first seven months of last year, it collected $2,047, 528,550,000 (in constant April 2019 dollars).

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