Tag Archives: Treasury

America is paying more in interest on its record $33 trillion debt than on national defense

Weird-Biden

Important Takeaways:

  • America’s gross national debt hit an eye-watering $33 trillion for the first time in September — mere months after eclipsing the $32 trillion mark earlier in the year.
  • The U.S. is also currently spending more to pay interest on the national debt than it does on national defense, according to the Treasury’s monthly statement.
  • In the current fiscal year through August, the Treasury has shelled out $807.84 billion in interest on its debt securities, while the Department of Defense’s budget for military programs totaled just $695.44 billion in the same period.
  • A deficit is what happens when the government spends more money in a fiscal year than it brings in through taxes — and the last few years have been expensive for the U.S.
  • Nearly $2 billion is spent every day just in interest on the national debt
  • Foreign governments and private investors are one of the biggest holders of the public debt, owning around $8 trillion.
  • “With more than $10 trillion of interest costs over the next decade, this compounding fiscal cycle will only continue to do damage to our kids and grandkids.”

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Yellen says U.S. debt ceiling could pinch in summer

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Friday the nation could exhaust its ability to borrow this summer even if Treasury takes “extraordinary actions” to buy more time when the nation’s debt ceiling comes back into effect at the end of July.

Yellen told reporters at the White House that while the Treasury could extend its ability to borrow by employing special measures if Congress did not act to raise the debt ceiling, those steps might buy only a “very limited” amount of time.

“It is exceptionally challenging this time to try to figure out just how long those (extraordinary) measures are going to last in part because of higher and more volatile spending and revenue numbers associated with the state of the economy and the pandemic,” she said.

“We are concerned that there are scenarios that give (a) very limited amount of additional time to use extraordinary measures,” Yellen added. “There are scenarios in which some time during the summer” room would run out even after special measures were employed, she said.

(Reporting by Steve Holland; Writing by Tim Ahmann; Editing by Andrea Ricci)

Trump: U.S. should get ‘substantial portion’ of TikTok operations sale price

By David Shepardson and Jeff Mason

WASHINGTON (Reuters) – U.S. President Donald Trump said Monday the U.S. government should get a “substantial portion” of the sales price of the U.S. operations of TikTok and warned he will ban the service in the United States on September 15 without a sale.

The turnaround came after Trump Friday he said he was planning to ban the Chinese-owned video app’s U.S. operations as soon as Saturday after dismissing a possible sale to Microsoft.

Reuters reported last week that some investors are valuing TikTok at about $50 billion, citing people familiar with the matter.

“I did say that if you buy it, whatever the price is that goes to whoever owns it, because I guess it’s China essentially … I said a very substantial portion of that price is going to have to come into the Treasury of the United States because we’re making it possible for this deal to happen,” Trump said.

It was not clear how the U.S. government would receive part of the purchase price.

He added it “will close down on September 15 unless Microsoft or somebody else is able to buy it and work out a deal, an appropriate deal so the Treasury … of the United States gets a lot of money.

Daniel Elman, analyst at Nucleus Research, said a sale “could foreshadow a growing wave of U.S. company acquisition of Chinese internet properties, particularly if the geopolitical tensions continue to mount.”

Elman said that could impact Tencent’s WeChat.

Secretary of State Mike Pompeo referenced WeChat on Sunday and said Trump “will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party.”

U.S. officials have said TikTok poses a national risk because of the personal data it handles. TikTok CEO Kevin Mayer said in a blog post last week that the company was committed to following U.S. laws and was allowing experts to observe its moderation policies and examine the code that drives its algorithms.

Trump’s comments confirmed a Reuters report Sunday that he had agreed to give China’s ByteDance 45 days to negotiate a sale of popular short-video app TikTok to Microsoft.

Trump, a former New York real estate developer, compared TikTok to the landlord tenant relationship, suggesting TikTok is like a tenant. “Without a lease, the tenant has nothing – so they pay what’s called key money or they pay something.”

He said he did not mind “whether it’s Microsoft or somebody else – a big company, a secure company, very, very American company buy it.”

Microsoft said Sunday that CEO Satya Nadella had spoken to Trump and “is prepared to continue discussions to explore a purchase of TikTok in the United States.”

Microsoft said Sunday it is “committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”

Many prominent Republicans, including House Republican Leader Kevin McCarthy, issued statements in support of a Microsoft acquisition of TikTok’s U.S. operations. Some congressional aides are worried about a backlash by younger voters against the party if Trump banned TikTok, which has 100 million American users.

Microsoft and TikTok parent ByteDance gave the U.S. government a notice of intent to explore a preliminary proposal for Microsoft to purchase the TikTok service in the United States, Canada, Australia, and New Zealand.

U.S. Senate Democratic leader Chuck Schumer also backed the sale, while a senior White House adviser raised concerns about a sale to Microsoft.

“A U.S. company should buy TikTok so everyone can keep using it and your data is safe,” Schumer said on Twitter, adding: “This is about privacy. With TikTok in China, it’s subject to Chinese Communist Party laws that may require handing over data to their government.”

White House trade adviser Peter Navarro suggested on Monday that Microsoft could divest its holdings in China if it were to buy TikTok.

“So the question is, is Microsoft going to be compromised?” Navarro said in an interview with CNN. “Maybe Microsoft could divest its Chinese holdings?”

Navarro said the Chinese government and military use Microsoft software “to do all the things they do.”

(Reporting by David Shepardson, Doina Chiacu, Susan Heavey, Alexandra Alper, Echo Wang, Greg Roumeliotis, Paresh Dave and Pete Schroeder; Editing by Nick Zieminski and Lisa Shumaker)