ASSIGNMENT

I United States Debt Crisis

Suggestions given by Republican Party
Shashank Tripathi, Amit kumar roy,Rishabh,Amit kumar,Mukul kumar,Ravinder kumar

2011

What is United States Public Debt?

The United States public debt is a measure of the obligations of the United States federal government and is presented by the United States Treasury in two components and one total: Debt Held by the Public, representing all federal securities held by institutions or individuals outside the federal government, including that held by the Federal Reserve System and state and local governments; Intergovernmental Holdings, representing U.S. Treasury securities held in accounts which are administered by the federal government, such as the OASI Trust fund administered by the Social Security Administration; and Total Public Debt Outstanding, which is the sum of the above components. The gross public debt increases or decreases as a result of the annual unified budget deficit or surplus. The federal government budget deficit or surplus is the cash difference between government receipts and spending, ignoring intra-governmental transfers. However, there is certain spending (supplemental appropriations) that add to the gross debt but are excluded from the deficit. The deficit is presented on cash rather than an accruals basis, although the accrual deficit provides more information on the longer- term implications of the government's annual operations.

Gross debt has increased over $500 billion each year since fiscal year (FY) 2003, with increases of $1 trillion in FY2008, $1.9 trillion in FY2009, and $1.7 trillion in FY2010. As of June 29, 2011, the Total Public Debt Outstanding was $14.46 trillion and was approximately 98.6% of calendar year 2010's annual gross domestic product (GDP) of $14.66 trillion. Using 2010 figures, the International Monetary Fund places the total U.S. public debt at 96.3% of GDP, ranked 12th highest against other nations. Together with the budget deficit, this debt was one of the reasons given by Standard & Poor's to downgrade the United States' credit outlook to "negative" on April 18,2011. The government budget deficit should not be confused with the trade deficit, which is the difference between net imports and net exports. In the United States Congress there are currently a number of disagreements between Democrats and Republicans regarding the United States debt; the second of August 2011 is considered the deadline at which point, if the debt ceiling is not raised and a bill is not compromised, the United States government is expected to begin a process of default. Debt Deadlock: Bare Facts US politicians are divided over how to raise the countrys debt ceiling If it misses the August 2 deadline, the US government may run out of money The current debt ceiling is $14.3 trillion, which it touched in May, and the nation cant borrow more unless the ceiling is raised So far, the country managed to keep itself afloat by suspending payments into two federal pension funds Republicans say Obamas team must cut the deficit before looking at ways to raise the debt limit

Suggestions Given by Republican Party

The plan that finally emerged after weeks of contentious negotiations includes nearly $1 trillion in spending cuts over 10 years, with a similar increase in the debt limit. It creates a special, dual-party congressional committee of a dozen members to come up with recommendations for $1.5 trillion in further deficit reductions.

Republicans say a Constitutional change is still needed to rein in the size of the federal government. The spending caps would look like this: 2012 - $1.043 trillion 2013 - $1.047 trillion 2014 - $1.066 trillion 2015 - $1.086 trillion 2016 - $1.107 trillion 2017 - $1.131 trillion 2018 - $1.156 trillion 2019 - $1.182 trillion 2020 - $1.208 trillion 2021 - $1.234 trillion
Spending Cap in Trillions
$1.25 $1.20 $1.15 $1.10 Spending Cap in Trillions $1.05 $1.00 $0.95 $0.90

The current funding levels for the federal government in the current fiscal year (in terms of discretionary spending) are at $1.049 trillion. So, this deal would basically keep the budget flat for two more years, through fiscal year 2013. But you don't have to be a rocket scientist to see that the federal budget would keep growing in size under this plan after that. Still, this is the first time since 2002 that spending caps will be in place to limit that growth.

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

As for other items in this agreement, the final legislative language does not include any provisions to deal with the partial shutdown at the Federal Aviation Administration. The deal also dropped a series of provisions offered by the Senate on deficit reduction, as negotiators rejected a plan to save $11 billion by cutting direct payments to farmers, and another plan to auction off TV channel frequencies for use by wireless phone companies.

Conclusion

Hopes of the US debt crisis being resolved soon began to recede on Thursday night when the Republicans humiliatingly failed to get even their own bill through the House, exposing deep divisions within their own party. The Republican leader in the house, John Boehner, had to abandon the attempt on Thursday night after failing to persuade enough hardline conservatives to support his bill. Some Facts.

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