Government receives record amount in donations to pay national debt

WASHINGTON, D.C. - This holiday season, Americans may be surprised to find out that a certain someone is on people's gift-giving list: Uncle Sam. Some Americans are putting their money where their mouth is and giving funds directly to the government to help pay its bills.

The U.S. debt now stands at a staggering $15 trillion and counting, so personal donations—even big ones—cannot reduce the 14-figure debt by any noticeable amount. And yet the government has received an average of $1.83 million per year in gifts toward paying it down since 1996.

The $3.27 million sent in by private citizens in 2011 was the most ever.

"I think that the biggest thing is that we're sending a message," said Phoenix resident Sally Coffin, 55, who works at a large semi-conductor plant and personally donated a sum she would not disclose. "And that message is that things have gotten to the point where citizens feel like they need to get involved to reduce this debt that we have."

While the U.S. Department of Treasury accepts checks by mail and credit cards through its website, pay.gov, Coffin chose to give through a website called ReduceTheNationalDebt.org. Seth and Teri Eisenberg from Endicott, NY, who both work in the legal field, started the non-profit site in June.

"Nobody was taking a lead to do something about the underlying debt itself," Seth Eisenberg said. "So we needed to do something to help get the American people motivated and do something about this issue."

At the beginning, the Eisenbergs would immediately forward the checks they received to the Treasury's Bureau of the Public Debt. The couple has since decided to combine all the donations made to their organization before forwarding them to the government so they "could have a louder, more effective voice in Washington."

Their goal: To present Congress with a big check that sends a big message.

"If people were to trickle in money, five dollars here, a hundred dollars there, it goes largely unnoticed. But if we can go down to Washington with a million dollars or a hundred million dollars—they'll listen," Seth Eisenberg said.

According to McKayla Braden, senior adviser at the Public Debt bureau, throughout history, offerings ranged from a single penny to $20 million—by far, the largest figure. The amounts fluctuate based on current events.

"This year the donations actually increased just a tiny bit. People did send in a little bit more because of the debt ceiling issues that we had," she said.

Gifts to the government to pay down principle on borrowed money have been tax-deductible since 1961. But Rep. Steve Stivers, R-Ohio, wants to give more incentive and make it easier for Americans to contribute

Stivers donates $700 out of each of his paychecks toward making a dent in the monstrous IOU. After a constituent sent him an email last April 15th asking how to donate, he drafted the DEBT (Debt Elimination By Tax-Deductible) Contributions Act, which now has the support of 111 House sponsors.

"The DEBT Contributions Act is something we can all rally around and get done to help reduce the national debt until we can figure out how to balance the budget," Stivers said.

The act would add a check box on tax forms to claim the (tax)-deductible contributions that go to pay the country's bills. It would also ensure that gifts be used for the sole purpose of paying down the dues.

"I don't pretend it's going to solve our national debt--I don't pretend it's a panacea," Stivers said. "But until we start to run surpluses, the only way we're going to start to pay down the national debt, is through patriotic Americans binding together and choosing to make that happen. So this is one small step in the right direction."

Robert Bixby of the Concord Coalition, a budget watchdog group, said sending in extra dollars is not a sensible way to deal with the red ink because it is not an effective solution. 

"Citizens need to let politicians know of their concern and that they are willing to make hard choices so long as it would actually result in real progress," Bixby said.

Bixby added that while the act of giving is very patriotic, the focus should be on enacting policies that won't run such high deficits.

"If it makes people feel good—like they're doing something—it's sensible in that sense, like giving to a charity would be sensible. It is not a sensible way to deal with our debt problem because the amount of money donated is just less than a drop in the bucket. "

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