Category Archives: government fraud spending collusion

Dept. of Energy, Fleecing of the Taxpayers

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Report: DOE Failed to Catch Solyndra’s Misrepresentations

by Lachlan Markay: Inspector general releases findings of years-long investigation into bankrupt solar company

A years-long investigation into the Department of Energy’s support for the bankrupt solar company Solyndra faults DOE officials, contractors, and the company itself for the department’s eventual loss of hundreds of millions of taxpayer dollars steered to the firm.

The DOE’s inspector general on Wednesday released the results of the investigation. It was undertaken in conjunction with the Department of Justice, which, the report reveals, decided early this year not to pursue any criminal charges in the matter.

Solyndra received a $535 million stimulus-backed DOE loan guarantee as part of the Obama administration’s early push for renewable energy subsidies. The company filed for bankruptcy in 2011 and laid off 1,100 employees, eventually costing taxpayers more than $500 million.

The company became a symbol of opposition to the administration’s green energy subsidy programs. Critics said its investors’ political connections had helped it to obtain taxpayer money despite obvious problems with its business.

Wednesday’s report, from DOE’s inspector general, notes these concerns, but says that the political factors supporting Solyndra’s government assistance were not examined during the investigation.

“While not the focus of the investigation, we were mindful of the concerns that had been raised regarding possible political pressure applied in the Solyndra decision-making process,” the report noted.

“Employees acknowledged that they felt tremendous pressure, in general, to process loan guarantee applications. They suggested the pressure was based on the significant interest in the program from Department leadership, the Administration, Congress, and the applicants.”

The report faults some unnamed DOE officials for failing to account for problems with the company’s business model shortly before it guaranteed financing for its solar panel production.

A week before the closing of Solyndra’s loan, an employee in the DOE’s Loan Programs Office (LPO) noticed a report from another branch of the department, the office of Energy Efficiency and Renewable Energy, that projected a per-watt cost of rooftop solar systems well below what Solyndra charged for its products.

According to the report, the LPO employee sent three emails to superiors noting the troubling data, yet no action was taken and DOE moved ahead with its Solyndra loan guarantee.

“This information should have raised serious questions concerning the viability of Solyndra’s financial model and Solyndra’s corresponding ability to service its debt payments. Instead, it was apparently disregarded,” the report found.

By that point, according to the report, Solyndra was already lying to the department about the company’s financial health: it inflated sales figures and misrepresented the costs of its solar panels to both DOE and engineering and financial contractors hired to assess its loan guarantee application.

The report primarily blames Solyndra for those misrepresentations, but it also faults LPO officials for failing to recognize apparent discrepancies in the information the company was providing.

In the run-up to the closing of its DOE-guaranteed loan, Solyndra assured the White House Office of Management and Budget and the credit rating agency Fitch, hired to assess the company’s financial prospects, that its panels were selling well and fetching a competitive price.

However, just weeks before, the company had provided DOE with a spreadsheet that “if read carefully” would have demonstrated to LPO officials that the company was inflating promises of future contracts and hiding the true costs of its products and that it “internally viewed the sales contracts as broken.”

“It is clear that there were shortcomings in the Department’s due diligence process,” the IG found, but it placed the bulk of the blame on the company itself for providing misleading and at times inaccurate information to department auditors and loan officials.

William Yeatman, a senior fellow and energy policy expert with the Competitive Enterprise Institute, said he was suspicious of IG findings that seemed to absolve the department of responsibility for ensuring the accuracy of information used to support the loan guarantee.

“The report raises more questions than answers,” Yeatman said in an email. “Outwardly, it passes the buck to Solyndra. But if you pay attention to the details, it demonstrates a woeful lack of due diligence by the Energy Department.”

“However, the IG refused to investigate a likely cause of this ineptitude—political pressure, which the report acknowledges was a factor—for whatever reason,” he added.

Since Solyndra’s bankruptcy, two other companies backed by the same loan guarantee program, Fisker Automotive and Abound Solar, have also filed for bankruptcy protection.

A third, Vehicle Production Group, ceased operations and laid off its entire staff in 2013. Another company, AM General, bought up VPG’s remaining assets, and its DOE-backed $50 million loan, for which it paid just $3 million.

Meanwhile:

EPA withholds mine spill documents from Congress

by Tori Richards: A congressional committee blasted the Environmental Protection Agency today for blocking release of documents related to the Gold King mine disaster, which poured deadly chemicals into the largest source of drinking water in the West.

“It is disappointing, but not surprising, that the EPA failed to meet the House Science Committee’s reasonable deadline in turning over documents pertaining to the Gold King Mine spill,” said Rep. Lamar Smith (R-TX). “These documents are essential to the Committee’s ongoing investigation and our upcoming hearing on Sept. 9. But more importantly, this information matters to the many Americans directly affected in western states, who are still waiting for answers from the EPA.”

Smith – who frequently spars with the EPA – is chairman of the House Science, Space, and Technology Committee. EPA director Gina McCarthy has been asked to appear and answer questions about the agency’s role in creating a 3-million-gallon toxic spill into Colorado’s Animas River on Aug. 5. Critics say McCarthy and the EPA have been unresponsive, secretive and unsympathetic toward millions of people who live in three states bordering the river.

For several days, the EPA didn’t notify the states of Utah, New Mexico or the Navajo Nation that the spill was coming their way. McCarthy waited a week before visiting Colorado and even then she refused to tour Silverton, the town nearest the Gold King mine where EPA contractors unleashed the toxic plume into waterways that feed the Colorado River. The agency withheld the name of the contractor working on the project and other details that are generally considered public information. Lastly, the Navajo Nation, which relies on the river for drinking water and farming, received an emergency supply from the EPA in oil-contaminated containers.

Smith also blasted McCarthy for traveling to Japan while controversy over the spill continues to swirl. He criticized President Barack Obama, as well.

“EPA Administrator Gina McCarthy is currently crusading on climate-change action in Japan while President Obama, who has yet to visit the areas affected by the spill, is touring the U.S. to tout EPA’s latest regulation that will do little to impact climate change and will only further burden Americans with higher electric bills,” Smith said.

And it’s not just the public and the media that have been frustrated by the EPA’s inaction.

“Time and again, the EPA has failed to be cooperative, forthright, or reasonable in its dealings with my Committee and with Congress in general,” Smith told Watchdog. “The agency embodies all the dysfunction, misguided priorities, and government overreach that angers so many Americans. The EPA seems to have a clear disregard for the very people it is intended to serve.”

The hearing is scheduled to last just a day and could include testimony from the firm that was contracted to stem the flow of toxic water from several mines above Silverton. Smith said in a statement last week that people affected by the spill continue to deal with limited information and uncertainty.

“As the agency entrusted by the American people to protect the environment and ensure the nation’s waters are clean, the EPA should be held to the highest standard,” Smith said. “The Science Committee needs to hear from the EPA about steps it is taking to repair the damage and to prevent this from ever occurring again.”

One official familiar with the committee but not authorized to speak said House members have been dismayed by an increased number of reports showing either incompetence or flat-out disregard in a variety of situations not limited just to the Animas River spill.

And at least one state senator has started an investigation into allegations that the EPA purposely caused the spill to create a Superfund site – a designation that the tiny town of Silverton has repeatedly rebuffed.

“EPA gets a failing grade from me for pursuing an extreme agenda at the expense of our nation’s economy, American interests, and, in this case, environmental protection,” Smith told Watchdog. “The more I review reports from the spill, the more questions I have about EPA’s faulty processes and failure to communicate with local residents and officials.”

$$ is Behind Senator’s Yes Votes on Iran Deal

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Traitor Senators Took Money from Iran Lobby, Back Iran Nukes

The Democrats are becoming a party of atom bomb spies.

Daniel Greenfield: Senator Markey has announced his support for the Iran deal that will let the terrorist regime inspect its own Parchin nuclear weapons research site, conduct uranium enrichment, build advanced centrifuges, buy ballistic missiles, fund terrorism and have a near zero breakout time to a nuclear bomb.

There was no surprise there.

Markey had topped the list of candidates supported by the Iran Lobby. And the Iranian American Political Action Committee (IAPAC) had maxed out its contributions to his campaign.

After more fake suspense, Al Franken, another IAPAC backed politician who also benefited from Iran Lobby money, came out for the nuke sellout.

Senator Jeanne Shaheen, the Iran Lobby’s third Dem senator, didn’t bother playing coy like her colleagues. She came out for the deal a while back even though she only got half the IAPAC cash that Franken and Markey received.

As did Senator Gillibrand, who had benefited from IAPAC money back when she first ran for senator and whose position on the deal should have come as no surprise.

The Iran Lobby had even tried, and failed, to turn Arizona Republican Jeff Flake. Iran Lobby cash had made the White House count on him as the Republican who would flip, but Flake came out against the deal. The Iran Lobby invested a good deal of time and money into Schumer, but that effort also failed.

Still these donations were only the tip of the Iran Lobby iceberg.

Gillibrand had also picked up money from the Iran Lobby’s Hassan Nemazee. Namazee was Hillary’s national campaign finance director who had raised a fortune for both her and Kerry before pleading guilty to a fraud scheme encompassing hundreds of millions of dollars. Nemazee had been an IAPAC trustee and had helped set up the organization.

Bill Clinton had nominated Hassan Nemazee as the US ambassador to Argentina when he had only been a citizen for two years.  A spoilsport Senate didn’t allow Clinton to make a member of the Iran Lobby into a US ambassador, but Nemazee remained a steady presence on the Dem fundraising circuit.

Nemazee had donated to Gillibrand and had also kicked in money to help the Franken Recount Fund scour all the cemeteries for freshly dead votes, as well as to Barbara Boxer, who also came out for the Iran nuke deal. Boxer had also received money more directly from IAPAC.

In the House, the Democratic recipients of IAPAC money came out for the deal. Mike Honda, one of the biggest beneficiaries of the Iran Lobby backed the nuke sellout. As did Andre Carson, Gerry Connolly, Donna Edwards and Jackie Speier. The Iran Lobby was certainly getting its money’s worth.

But the Iran Lobby’s biggest wins weren’t Markey or Shaheen. The real victory had come long before when two of their biggest politicians, Joe Biden and John Kerry, had moved into prime positions in the administration. Not only IAPAC, but key Iran Lobby figures had been major donors to both men.

That list includes Housang Amirahmadi, the founder of the American Iranian Council, who had spoken of a campaign to “conquer Obama’s heart and mind” and had described himself as “the Iranian lobby in the United States.” It includes the Iranian Muslim Association of North America (IMAN) board members who had fundraised for Biden. And it includes the aforementioned Hassan Nemazee.

A member of Iran’s opposition had accused Biden’s campaigns of being “financed by Islamic charities of the Iranian regime based in California and by the Silicon Iran network.” Biden’s affinity for the terrorist regime in Tehran was so extreme that after 9/11 he had suggested, “Seems to me this would be a good time to send, no strings attached, a check for $200 million to Iran”.

Appeasement inflation has since raised that $200 million to at least $50 billion. But there are still no strings worth mentioning attached to the big check.

Questions about donations from the Iran Lobby had haunted Kerry’s campaign. Back then Kerry had been accused of supporting an agreement favorable to Iran. The parameters of that controversial proposal however were less generous than the one that Obama and Kerry are trying to sell now.

The hypothetical debates over the influence of the Iran Lobby have come to a very real conclusion.

Both of Obama’s secretaries of state were involved in Iran Lobby cash controversies, as was his vice president and his former secretary of defense. Obama was also the beneficiary of sizable donations from the Iran Lobby. Akbar Ghahary, the former co-founder of IAPAC, had donated and raised some $50,000 for Obama.

It’s an unprecedented track record that has received very little notice. While the so-called “Israel Lobby” is constantly scrutinized, the fact that key foreign policy positions under Obama are controlled by political figures with troubling ties to an enemy of this country has gone mostly unreported by the mainstream media.

This culture of silence allowed the Iran Lobby to get away with taking out a full-page ad in the New York Times before the Netanyahu speech asking, “Will Congress side with our President or a Foreign Leader?”

Iran’s stooges had taken a break from lobbying for ballistic missiles to play American patriots.

Obama and his allies, Iranian and domestic, have accused opponents of his dirty Iran deal of making “common cause” with that same terror regime and of treason. The ugly truth is that he and his political accomplices were the traitors all along.

Democrats in favor of a deal that will let a terrorist regime go nuclear have taken money from lobbies for that regime. They have broken their oath by taking bribes from a regime whose leaders chant, “Death to America”. Their pretense of examining the deal is nothing more than a hollow charade.

This deal has come down from Iran Lobby influenced politicians like Kerry and is being waved through by members of Congress who have taken money from the Iran Lobby. That is treason plain and simple.

Despite what we are told about its “moderate” leaders, Iran considers itself to be in a state of war with us. Iran and its agents have repeatedly carried out attacks against American soldiers, abducted and tortured to death American officials and have even engaged in attacks on American naval vessels.

Aiding an enemy state in developing nuclear weapons is the worst form of treason imaginable. Helping put weapons of mass destruction in the hands of terrorists is the gravest of crimes.

The Democrats who have approved this deal are turning their party into a party of atom bomb spies.

Those politicians who have taken money from the Iran Lobby and are signing off on a deal that will let Iran go nuclear have engaged in the worst form of treason and committed the gravest of crimes. They must know that they will be held accountable. That when Iran detonates its first bomb, their names will be on it.

*** How can any senator vote yes, when as of early this week:

Iran Tracker: Rouhani: “We will buy and sell weapons whenever” we want. President Hassan Rouhani discussed Iran’s military capabilities during a speech for “Defense Industry Day” in Tehran on August 22. Rouhani emphasized that Iran pursues a defensive strategy of deterrence and added, “Our policy of détente, ‘convergence,’ and confidence-building does not conflict with the defensive power of military industries in the country; if a country does not have strength, independence, or stability, it cannot pursue real peace.” Rouhani also stated:

  • On cultural power: “If a country is not prepared, dedicated, or strong with respect to cultural power, we cannot call that country strong or resisting. If a country does not have political capabilities and does not have strong diplomats for negotiating and understanding, it will be defeated.”
  • On the arms restrictions in the nuclear agreement: “The only thing that was in the [UN Security Resolution 2231] was not to build any missiles with the ability to carry nuclear warheads; we have never pursued this goal anyway.”
  • Rouhani emphasized that there are no “military-related issues that will limit the armed forces” in the Joint Comprehensive Plan of Action (JCPOA).
  • “We will sell and buy weapons whenever and wherever we deem it necessary… we will not wait for permission from anyone or any resolution.”
  • On strengthening Iran’s defense capabilities: “We must strengthen the defensive power of the country in order to ensure the stability of the nuclear deal and security in the country.”
  • “Before the [Islamic] Revolution, we were only consumers of weapons and foreign equipment…praise be to God, in recent years, we have made huge steps in design, construction, and equipment; we are moving towards complete self-sufficiency; every day there is a new achievement.”
  • “Today in the defense and military field our country must be strong. However, our capabilities are not against any country. We are not seeking intervention or aggression against any other country; we are equipping ourselves for defense of our country.”
  • “We [the government] must be the buyer and willing to cooperate; we must transfer this industry to sectors outside of the Ministry of Defense, especially to the non-governmental sphere.” (President.ir) http://president.ir/fa/88788

Review This 45 Item List from 1963

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Chilling and a real conversation starter, most provocative.

Communist Goals (1963)
Documention below
Congressional Record–Appendix, pp. A34-A35
January 10, 1963

Current Communist Goals

EXTENSION OF REMARKS OF HON. A. S. HERLONG, JR. OF FLORIDA

IN THE HOUSE OF REPRESENTATIVES

Thursday, January 10, 1963

Mr. HERLONG. Mr. Speaker, Mrs. Patricia Nordman of De Land, Fla., is an ardent and articulate opponent of communism, and until recently published the De Land Courier, which she dedicated to the purpose of alerting the public to the dangers of communism in America.

At Mrs. Nordman’s request, I include in the RECORD, under unanimous consent, the following “Current Communist Goals,” which she identifies as an excerpt from “The Naked Communist,” by Cleon Skousen:

[From “The Naked Communist,” by Cleon Skousen]

CURRENT COMMUNIST GOALS

1. U.S. acceptance of coexistence as the only alternative to atomic war.

2. U.S. willingness to capitulate in preference to engaging in atomic war.

3. Develop the illusion that total disarmament [by] the United States would be a demonstration of moral strength.

4. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war.

5. Extension of long-term loans to Russia and Soviet satellites.

6. Provide American aid to all nations regardless of Communist domination.

7. Grant recognition of Red China. Admission of Red China to the U.N.

8. Set up East and West Germany as separate states in spite of Khrushchev’s promise in 1955 to settle the German question by free elections under supervision of the U.N.

9. Prolong the conferences to ban atomic tests because the United States has agreed to suspend tests as long as negotiations are in progress.

10. Allow all Soviet satellites individual representation in the U.N.

11. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces. (Some Communist leaders believe the world can be taken over as easily by the U.N. as by Moscow. Sometimes these two centers compete with each other as they are now doing in the Congo.)

12. Resist any attempt to outlaw the Communist Party.

13. Do away with all loyalty oaths.

14. Continue giving Russia access to the U.S. Patent Office.

15. Capture one or both of the political parties in the United States.

16. Use technical decisions of the courts to weaken basic American institutions by claiming their activities violate civil rights.

17. Get control of the schools. Use them as transmission belts for socialism and current Communist propaganda. Soften the curriculum. Get control of teachers’ associations. Put the party line in textbooks.

18. Gain control of all student newspapers.

19. Use student riots to foment public protests against programs or organizations which are under Communist attack.

20. Infiltrate the press. Get control of book-review assignments, editorial writing, policymaking positions.

21. Gain control of key positions in radio, TV, and motion pictures.

22. Continue discrediting American culture by degrading all forms of artistic expression. An American Communist cell was told to “eliminate all good sculpture from parks and buildings, substitute shapeless, awkward and meaningless forms.”

23. Control art critics and directors of art museums. “Our plan is to promote ugliness, repulsive, meaningless art.”

24. Eliminate all laws governing obscenity by calling them “censorship” and a violation of free speech and free press.

25. Break down cultural standards of morality by promoting pornography and obscenity in books, magazines, motion pictures, radio, and TV.

26. Present homosexuality, degeneracy and promiscuity as “normal, natural, healthy.”

27. Infiltrate the churches and replace revealed religion with “social” religion. Discredit the Bible and emphasize the need for intellectual maturity which does not need a “religious crutch.”

28. Eliminate prayer or any phase of religious expression in the schools on the ground that it violates the principle of “separation of church and state.”

29. Discredit the American Constitution by calling it inadequate, old-fashioned, out of step with modern needs, a hindrance to cooperation between nations on a worldwide basis.

30. Discredit the American Founding Fathers. Present them as selfish aristocrats who had no concern for the “common man.”

31. Belittle all forms of American culture and discourage the teaching of American history on the ground that it was only a minor part of the “big picture.” Give more emphasis to Russian history since the Communists took over.

32. Support any socialist movement to give centralized control over any part of the culture–education, social agencies, welfare programs, mental health clinics, etc.

33. Eliminate all laws or procedures which interfere with the operation of the Communist apparatus.

34. Eliminate the House Committee on Un-American Activities.

35. Discredit and eventually dismantle the FBI.

36. Infiltrate and gain control of more unions.

37. Infiltrate and gain control of big business.

38. Transfer some of the powers of arrest from the police to social agencies. Treat all behavioral problems as psychiatric disorders which no one but psychiatrists can understand [or treat].

39. Dominate the psychiatric profession and use mental health laws as a means of gaining coercive control over those who oppose Communist goals.

40. Discredit the family as an institution. Encourage promiscuity and easy divorce.

41. Emphasize the need to raise children away from the negative influence of parents. Attribute prejudices, mental blocks and retarding of children to suppressive influence of parents.

42. Create the impression that violence and insurrection are legitimate aspects of the American tradition; that students and special-interest groups should rise up and use [“]united force[“] to solve economic, political or social problems.

43. Overthrow all colonial governments before native populations are ready for self-government.

44. Internationalize the Panama Canal.

45. Repeal the Connally reservation so the United States cannot prevent the World Court from seizing jurisdiction [over domestic problems. Give the World Court jurisdiction] over nations and individuals alike.

Note by Webmaster: The Congressional Record back this far has not be digitized and posted on the Internet.

It will probably be available at your nearest library that is a federal repository. Call them and ask them.

Your college library is probably a repository. This is an excellent source of government records.

Another source are your Congress Critters. They should be more than happy to help you in this matter.

You will find the Ten Planks of the Communist Manifesto interesting at this point.

Click here to see them listed with brain-challenging comments.

Documentation

Webmaster Forest Glen Durland found the document in the library.
Sources are listed below.
The quote starts on page 259.
Microfilm:

California State University at San Jose
Clark Library, Government Floor
Phone (408)924-2770
Microfilm
Call Number:
J
11
.R5
Congressional Record, Vol. 109
88th Congress, 1st Session
Appendix Pages A1-A2842
Jan. 9-May 7, 1963
Reel 12
The book was found in the off campus stacks, was ordered and checked. The quote below was checked against the original and is correct. The few errors in the copy from the Congressional Record are shown in [ ] .
The quote starts on page 259.

California State University at San Jose, Clark Library stacks call number:
Naked Communist
HX
56
S55

Book title page:
Skousen, W. Cleon. Naked Communist
Salt Lake City, Utah: Ensign Publishing Co.
C. 1961 , 9th edition July 1961.

Obama’s Motivation for the Iran Nuclear Deal

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Obama’s Motivation for the Iran Nuclear Deal

This may be somewhat conspiratorial, so critiques and commentary is invited. The common question has been for several months, why is Barack Obama so pro-Iran in order to get a final deal signed with regard to their nuclear weapons program.

No one seems to be able to suggest a viable reason, personally I went so far as to track down and interview Ambassador Mark Wallace, CEO of United Against Nuclear Iran.

 

Still without any meaningful answer as to why, it was prudent to search far and wide for clues and suddenly a real story began to develop on its own.

 

 

Plans for an Iran strike by Israel has been on the table and in 2011, Israel Defense Minister Ehud Barak declared the time would be delayed for a future time. In 2012, Israel was poised to attack Iran, and the Obama National Security Council ensured that operation was terminated.

 

In summary, the United States and Israel have cooperated for decades on defense, military aid, arms sales, joint exercises and intelligence. This stems from a 1981 Memorandum of Understanding (MOU) that established cooperation on national security of both countries. In 1983, both sides signed a Joint Political Military Group implementing the MOU and in 1984 those activities commenced. In 1987, the United States constructed facilities to stockpile advanced military gear and munitions. In 1996, Congress codified this standard that included defense contracts, weapons systems, interagency strategic cooperation, diplomatic and intelligence operations and ballistic missiles. Countless laws/acts have been passed and signed in the United States where the U.S. and Israel together preserve and enhance Israel’s Qualitative Military Edge.

 

Barack Obama is bound by agreement, law and treaty history yet he takes this history and text to the line where his policy does not support or stand with Israel in fully defending Israel in military hostilities or engagements as noted in the most recent conflicts in Gaza. Having a JPOA, a nuclear agreement has for the most part thrown sand in the gears keeping his own anti-Israel cultural and lifelong behavior intact, all at the expense of stability in the Middle East. Barack Obama’s background demonstrates he would rather have a failed nuclear agreement that satisfies his Muslim doctrine against Jews and Israel than to militarily stand with Israel even as new alliances and relationships have been established, isolating the United States. The same theory here is also applied to the balance of the Middle East with emphasis on Iraq and Syria.

CBO revises US Treasury runs out of money Nov.~Dec.

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Okay in the massive field of candidates running for president, who is talking about running out of money?

CBO projects that if the debt limit is unchanged, the measures that the Treasury has been taking to avoid breaching that limit will be exhausted sometime between mid-November and early December, and the Treasury will then run out of cash.

Summary

The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations. In March, the debt ceiling was reached, and the Secretary of the Treasury announced a “debt issuance suspension period.” During such a period, existing statutes allow the Treasury to take a number of “extraordinary measures” to borrow additional funds without breaching the debt ceiling. The Congressional Budget Office projects that if the debt limit remains unchanged, those measures will be exhausted and the Treasury will run out of cash between mid-November and early December. At such time, the government would be unable to fully pay its obligations, a development that would lead to delays of payments for government activities, a default on the government’s debt obligations, or both.

According to the Congressional Budget Office’s estimates, this year’s deficit will be noticeably smaller than what the agency projected in March, and fiscal year 2015 will mark the sixth consecutive year in which the deficit has declined as a percentage of gross domestic product (GDP) since it peaked in 2009. Over the next 10 years, however, the budget outlook remains much the same as CBO described earlier this year: If current laws generally remain unchanged, within a few years the deficit will begin to rise again relative to GDP, and by 2025, debt held by the public will be higher relative to the size of the economy than it is now.

CBO’s economic forecast, which serves as the basis for its budget projections, anticipates that the economy will expand modestly this year, at a solid pace in calendar years 2016 and 2017, and at a more moderate pace in subsequent years. The pace of growth over the next few years is expected to reduce the quantity of underused resources, or “slack,” in the economy, lowering the unemployment rate and putting upward pressure on compensation as well as on inflation and interest rates.

The Budget Deficit for 2015 Will Be Smaller Than Last Year’s

At $426 billion, CBO estimates, the 2015 deficit will be $59 billion less than the deficit last year (which was $485 billion) and $60 billion less than CBO estimated in March (see table below). The expected shortfall for 2015 would constitute the smallest since 2007, and at 2.4 percent of gross domestic product, it would be below the average deficit (relative to the size of the economy) over the past 50 years. Debt held by the public will remain around 74 percent of GDP by the end of 2015, CBO estimates—slightly less than the ratio last year but higher than in any other year since 1950.

Outlays

Federal outlays are projected to rise by 5 percent this year, to $3.7 trillion, or 20.6 percent of GDP. That increase
is the net result of a nearly 10 percent jump in mandatory spending, offset by lower net interest payments and discretionary outlays.

CBO anticipates that mandatory outlays will be $199 billion higher in 2015 than they were last year. Federal spending for the major health care programs accounts
for a little more than half of that increase: Outlays for Medicare (net of premiums and other offsetting receipts), Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance purchased through exchanges and related spending are expected to be 
$110 billion (12 percent) higher this year than they were in 2014.

In addition, outlays related to the government’s transactions with Fannie Mae and Freddie Mac and for higher education programs will be greater than the amounts recorded last year. Those increases will be partially offset by increased receipts from auctions of licenses to use the electromagnetic spectrum and by reduced spending for unemployment compensation.

Even though federal borrowing continues to rise, CBO expects that the government’s net interest costs will fall by nearly 5 percent this year—mainly because lower inflation this year has reduced the cost of the Treasury’s inflation-protected securities.

CBO anticipates that discretionary spending, which is controlled through annual appropriations, will be about 1 percent less in 2015 than it was in 2014. By the agency’s estimates, defense outlays will drop by more than 2 percent, whereas nondefense discretionary outlays will be only slightly below last year’s amount.

Revenues

Federal revenues are expected to climb by 8 percent in 2015, to $3.3 trillion, or 18.2 percent of GDP. Revenues from all major sources will rise, including individual income taxes (by 10 percent), corporate income taxes (by 8 percent), and payroll taxes (by 4 percent). Revenues from other sources are estimated to increase, on net, by 5 percent. The largest increase in that category derives from fees and fines, mostly as a result of provisions of the Affordable Care Act. Many more details here.