Ed Royce: “Mr. Speaker, let me explain why this is important: although most Americans assume that a Federal budget surplus in any…”

“Mr. Speaker, let me explain why this is important: although most Americans assume that a Federal budget surplus in any year is automatically used to reduce the national debt or at least the debt held by the public, this actually is not the case. The U.S. Department of the Treasury must implement specific financial accounting procedures if it is to use a cash surplus to pay down the debt held by the public. If these procedures are not followed or if they proceed slowly, then the surplus revenue just builds up in the Treasury-operating cash accounts. This excess cash could be used in the future, yes, to pay down the debt, but only if it is protected from other uses in the meantime. Until the excess cash is formally committed to debt repayment, Congress could appropriate it for other purposes. Consequently, the current surplus will not automatically reduce the publicly held national debt of $3.54 trillion, unless Congress acts now to make sure these funds are automatically used for debt reduction and for no other purpose. That is exactly what this bill H.R. 4601 does; and, frankly, this offers a first step toward paying down the debt, because it protects the on-budget surplus for the remainder of this fixed fiscal year, and it appropriates it directly for debt reduction.”