"China now owns $1.1 trillion of our debt, our trade deficit last year with them was a quarter of a trillion dollars."
Terry McAuliffe on Thursday, May 26th, 2011 in an appearance on MSNBC's Hardball with Chris Matthews.
Terry McAuliffe says China owns $1.1 trillion in U.S. debt
At the height of Donald Trump-fueled birther fever, potential Virginia gubernatorial candidate Terry McAuliffe stopped by MSNBC’s Hardball with Chris Matthews to chime in on "The Donald."
McAuliffe, a former Democratic National Committee chairman, received a $25,000 campaign contribution from Trump, a Republican, during his unsuccessful 2009 gubernatorial bid.
But on TV, McAuliffe was dismissive of his one-time benefactor’s claims that President Obama was born in Kenya. He said the birther sideshow -- which was discredited a few days later when Obama released his long-form U.S. birth certificate -- was hurting Republicans by scaring away undecided voters, and distracting people from important issues.
"This is so offensive to independents and to people in this country today ... who worry that China now owns $1.1 trillion of our debt, our trade deficit last year with them was a quarter of a trillion dollars. They’re worried about their job. They’re worried about their children’s job. And this gibberish that they talk about on television is doing nothing and other countries are moving at warp speed ahead of us on renewable energy, wind, electric cars..."
OK, before McAuliffe starts plugging his electric car company, as he is wont, let’s take a look at those digits and dollar signs he’s throwing around.
The $1.1 trillion sounded familiar, so we’ll examine that one first.
For a source, McAuliffe provided a March 1 article from Reuters. The second paragraph of that story supports his claim:
"Treasury Department data released on Monday showed that China held $1.16 trillion in U.S. government debt in December, the most recent month for which figures are available, up from prior estimates of $892 billion," the story says.
Well, that’s true. The latest figures from the U.S. Treasury Department show China held $1.154 trillion in U.S. debt in February -- down $600 million from January. Japan was the second-largest holder, at $890.3 billion, with Great Britain third at $295.5 billion.
Here’s a little background: The total federal debt, as of May 2, was $14.29 trillion. Of that amount, about $9.65 trillion is called public debt, which refers to all federal securities held by institutions and individuals outside the U.S. government. That includes China and other foreign nations.
The remaining debt -- about $4.64 trillion -- is held by the Federal Financing Bank, U.S. government trust funds, and other federal funds and accounts. The largest trust fund is the one that endows Social Security.
McAuliffe, for his second claim, used a report from the liberal-leaning Brookings Institution that reports: "In 2010, the U.S.-China trade deficit increased to over $273 billion, the highest bilateral trade deficit on record. It represents almost 55 percent of the total U.S. trade deficit."
We checked it out, and that’s true, according to the U.S. Census Bureau. If you’re curious, this year’s trade deficit through February was $42.1 billion. That’s almost 36 percent of the United States’ $117.8 billion trade deficit for the first two months of the year.
Looking back, this is an open-and-shut case.
We cannot confirm McAuliffe’s claim that independent voters are offended by The Donald. But he’s right on his numbers: China owns $1.1 trillion in U.S. debt; our trade deficit with China was about $275 billion last year.
Both scary, both True.