Reuters Ignores Projected August Debt Payments in ‘Exclusive’ About Preventing Default
Reuters on Thursday issued what it called an “exclusive” report about the Treasury department “secretly” weighing options to avert a default if the debt ceiling isn't raised by August 2nd. In the piece , the authors shared with readers the amount of tax revenue Treasury projects it will collect in August as well as projected Social Security payments, but conspicuously ignored what the department expects to pay in interest costs on the federal debt: A small team of Treasury officials is discussing options to stave off default if Congress fails to raise the country's borrowing limit by an August 2 deadline, sources familiar with the matter said on Wednesday. Senior officials, including Treasury Secretary Timothy Geithner, have repeatedly said there are no contingency plans if lawmakers do not give the U.S. government the authority to borrow more money. But behind the scenes, top Treasury officials have been exploring ways to prevent a financial meltdown that would be triggered if the government were unable to pay its bills on time, sources told Reuters. Sounds reasonable, right? Unfortunately, Reuters failed to accurately report what those contingencies could be: In August, the Treasury will take in roughly $172 billion, but is obligated to make $306 billion in payments — meaning it cannot pay about 45 percent of its bills without borrowing more money, according to the Bipartisan Policy Center, a Washington think tank. That would force the administration to make some difficult choices, even though officials believe emergency measures will buy little time and cannot stave off an economic catastrophe. If Treasury were to decide to delay some payments, one option could be to postpone a disbursement of more than $49 billion to Social Security recipients that is due on August 3. It would be a politically explosive step but one that could allow the government to temporarily pay bondholders to try to avoid foreign investors dumping U.S. Treasuries and the dollar. Notice something missing? Like how much interest is due on our debt in August? If we're going to bring in $172 billion next month, and we owe $49 billion to Social Security recipients, that leaves $123 billion, right? As NewsBusters reported Tuesday, our August interest payment isn't likely to be higher than $35 billion, meaning we will have more than enough in revenues to make our debt payment and fulfill our obligations to America's seniors. After paying the interest due on our debt and Social Security bills, we'll still have $88 billion remaining to pay military men in the field, Medicare expenses, and a whole host of things. Wouldn't this have been valuable information for Reuters to share in an article titled “Exclusive: Treasury Secretly Weighs Options to Avert Default?” Or would informing the public that there really is absolutely no danger whatsoever of America defaulting on its debt not fit the media's current desire to gin up hysteria about this supposedly looming “crisis” in order to put pressure on Congressional Republicans to raise taxes? Shouldn't it be the press's responsibility to actually give the public the complete picture without withholding key elements of the story? Or would that be too much like journalism?
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Reuters Ignores Projected August Debt Payments in ‘Exclusive’ About Preventing Default
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on July 7, 2011. Filed under