As of July 13, 29 public companies had more cash on hand than the U.S. Treasury Department, according to the site Zero Hedge based on numbers from Capital IQ. It’s a stark reminder that if Congress refuses to raise the debt ceiling, the government won’t have nearly enough money to continue funding essential services and programs.
In the first half of July alone, Treasury cash balances were depleted from from $130 billion to just $39 billion. That means the most powerful nation on earth currently is tied with Google for the amount of cash that it has, and is less flush than Bank of America, JP Morgan Stanley, and Goldman Sachs, among others.
Two of the top three companies are Chinese, while Bank of America comes in third. The numbers effectively rebut Republican claims that the government has plenty of money to keep funding essential services while paying down its debt. It also belies GOP claims that companies are in need of lower corporate taxes. American corporations have a record amount of cash — they are just refusing to invest domestically while lobbying for tax breaks.
Several Republican candidates have called for drastically lowering the corporate tax rate, while congressional Republicans are refusing to concede in debt ceiling negotiations that corporate tax loopholes should be closed to give the government more much-needed revenue.
The Treasury’s cash balances will go back up once more revenue comes in, but on Aug. 3, the government’s savings account will be nearly empty and President Obama would be relying on daily tax revenue to pay the nation’s bills. But there won’t be enough — in fact, there would be a $134 billion shortfall in August alone. The small amount of money available to the Treasury will leave the government facing impossible choices about what to cut.