ABC News: Culture of Debt? As Congress Scrambles to Avoid Government Default, Some U.S. Leaders Have Financial Difficulties Too

June 30, 2011
The national debt is currently approaching $14.3 trillion, or almost $130,000 per U.S. taxpayer, and while Congress scrambles to prevent the government from defaulting on its debt obligations, some of the country’s top leaders are having difficulty balancing their own finances.

Two days after Republicans rode a tidal wave of anti-spending, anti-debt sentiment to the House majority, House Speaker John Boehner, R-Ohio, told ABC News’ Diane Sawyer that he did not have any personal debt. No outstanding mortgage, no maxed-out credit cards, no car loans. Nothing.

“Germans. You know, we [Boehners] — we’re savers, we’re not spenders,” Boehner explained to Sawyer Nov. 4. “Debt is not something that has ever made me comfortable, and this national debt makes me very uncomfortable.”

Boehner’s financial disclosure statement even backs him up: zero liabilities.

Some fiscal hawks in Washington say that lawmakers should follow the everyday American’s lead and pass a budget based on what the government makes in revenue.

“Families do it every day. A husband earns $40,000. A wife earns $40,000. Their total family income is $80,000. That’s their budget. That’s what they can afford to spend. American families figure out how to live within their means,” Sen. Ron Johnson, R-Wis., said Tuesday on the Senate floor. “The federal government should be no different. A budget is a number. We should first pick one number, and then a set of numbers, that won’t let America go bankrupt.”

House Majority Leader Eric Cantor, R-Va., said that at the end of July — mere days before the Treasury Department’s Aug. 2 deadline to raise the debt ceiling — the House would consider a balanced budget amendment, which would amend the Constitution to require that total spending for any fiscal year not exceed total receipts.

“We are about trying to save the taxpayers money and to change the culture here in Washington,” Cantor, told reporters May 11. “We believe that what we’re about reflects a commonsense nature of the American people. They understand that we can’t keep spending money we don’t have.”

But consumer credit reporting agency Equifax reports that although total consumer debt has declined since 2008, many Americans are still spending money they don’t have. The agency says that 54 million American households still owe more than $800 billion in debt to credit card companies alone, irrespective of other debts such as mortgages, car loans or student loans.

And they’re not alone.

While the speaker and his Republican colleagues work to cut spending and reverse Washington’s culture of debt, Boehner’s squeaky-clean debt record stands apart from some of the country’s most fiscally conservative lawmakers (and some Democrats), who are deep in the hole themselves with personal debt valued in the hundreds of thousands of dollars.

Even some of the presidential candidates seeking the Republican nomination in 2012 have drawn criticism for spending money they do not have, racking up personal debt in the process.

Last month, Republican candidate Newt Gingrich was reviled when it was learned that he and his wife, Callista, had reported up to $500,000 debt in a revolving credit account at lavish jeweler Tiffany and Co. in 2005 and 2006. After initially declining to talk about it, Gingrich eventually said he and his wife had since paid off the tab.
“I owe no personal debts. None,” Gingrich said May 23. “If [President] Obama followed our pattern of fiscal responsibility, the United States would currently be running a surplus and buying back debt from the Chinese.”
Rep. Michele Bachmann, R-Minn., who formally launched her presidential campaign earlier this week and is a co-sponsor the balanced budget amendment, has not yet filed her 2010 financial disclosure report but showed two liabilities with the United Bank of Wisconsin on her 2009 financial disclosure statement filed June 16, 2010. Bachmann reported debt between $100,001-$250,000 on a mortgage for her Lake Elmo, Minn., property and also reported taking out a $250,001-$500,000 business loan.
Another Republican presidential contender, Rep. Ron Paul, R-Texas, widely viewed as the Godfather of the Tea Party, reported a personal loan with the First National Bank of Lake Jackson (Texas) between $250,001-$500,000 on his 2010 financial disclosure statement filed May 13.
Cantor, who pulled out the bipartisan debt limit negotiations led by the vice president last week, reported a liability with Bank of America valued between $250,001-$500,000 on a mortgage for a property in Arlington, Va., on his 2010 financial disclosure statement.
But all of the leading Republicans’ debt combined pales in comparison to one of the House’s richest Democrats, Minority Leader Nancy Pelosi, D-Calif.
In her latest financial disclosure statement, filed May 16, Pelosi reported liabilities on six separate properties in the Golden State, totaling between $4.75 million-$21.5 million. She also reported an equity line of credit on a California property valued between $1 million-$5 million, two brokerage margin accounts valued between $1.5 million-$6 million and a personal term loan worth between $1 million-$5 million.
While the housing market’s rapid decline is considered the chief impetus behind the financial crisis, not all investments in real estate are necessarily unwise. The financial disclosure statements are simply annual snapshots of financial history intended to demonstrate accountability and transparency.
The Ethics Committee requires members, officers and certain employees of the House of Representatives to file them annually.
Lawmakers report ranges on the disclosure statements, and they are not required to report revolving charge accounts (i.e., credit cards) unless the balance at the end of the previous calendar year exceeds $10,000. Members of Congress are also not required to report any mortgages on personal residences or personal loans secured by automobiles, household furniture or appliances, and debts owed to certain immediate relatives.
ABC News’ Tom Shine contributed to this report.