“The US budget deficit shot up 15.7 percent in the first six months of fiscal 2011, the Treasury Department said Wednesday as political knives were being sharpened for a new budget battle.
“The Treasury reported a deficit of $829 billion for the October-March period, compared with $717 billion a year earlier, as revenue rose a sluggish 6.9 percent as the economic recovery slowly gained pace.
“The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods.”
“Some Republicans are already squirming over a vote that provides a ready-made campaign ad for their opponents: Rep. Paul Ryan’s fiscal 2012 budget, which will restructure Medicare, alter Medicaid funding and slash $6 trillion from federal spending over 10 years.
“Whether they’re new lawmakers in formerly Democratic seats or House veterans who represent districts with large elderly populations dependent on Medicare, a significant number of Republicans realize that embracing the Ryan plan may be one of the most treacherous votes of the year…
“Privately, rank-and-file offices on Capitol Hill are whispering that the Republican leadership is asking its members to take a tough vote on a bill that has no chance of becoming law — Ryan’s budget is dead on arrival in the Senate, still ruled by Democrats.
“For now, GOP lawmakers are dodging the question.”
“Failure to raise the debt ceiling would mean that the government would have to make choices as to who they would and would not pay. For example, they would have to make decisions about whether to pay bondholders, including those in China and Japan who had loaned the United States money, or whether to issue Social Security checks…
“It was made quite clear in the latest NBC News/Wall Street Journal poll—conducted March 31-April 4 among 1,000 adults, with a 3-point error margin—that most Americans do not understand what the debt limit is or the consequences of not raising it…
“It’s clear that President Obama and congressional leaders of both parties as well as opinion leaders of all stripes have an enormous amount of educating to do. The public seems to see raising the debt ceiling as being a question of whether we should go further into debt or not, even when it is explained to them.
“It would be interesting to see how the public would have responded if it had been made clear that Social Security and veterans’ checks wouldn’t be going out, that the government’s credit rating would drop, and that the implications for Medicare and Medicaid would be enormous.”