Sen. Dick Durbin incorrectly claimed that the U.S. borrows money "primarily from China" to fund the federal government. China owns about 8 percent of the total U.S. debt.
The Illinois Democrat made the claim during a June 19 interview on NBC's "Meet the Press."
Durbin, June 19: Keep in mind, for every dollar we spend in Washington, we borrow 40 cents, primarily from China, our major competitor in the world.
Durbin is largely correct that the U.S. borrows about 40 cents for every dollar it spends. In the last fiscal year, the U.S. spent $3.456 trillion but raised only $2.162 trillion in revenues — forcing it to borrow $1.294 trillion, or about 37 cents for every dollar it spent, according to the Treasury Department. For this fiscal year, the amount is a little more than 38 cents for every dollar, as of May, according to the Congressional Budget Office's latest Monthly Budget Review.
So, that means China accounts for only about 3 cents of every 38 cents the U.S. borrows. As of April, China owned $1.15 trillion of the $14.34 trillion in total U.S. debt — a hefty amount to be sure, but only about 8 percent of the national debt. In fact, about 31 percent of the U.S. debt — or $4.5 trillion — is owned by any foreign government. The primary owners of the debt are private investors (table S-2), who hold $8.3 trillion of U.S. debt.
And while China is the largest foreign holder of U.S. securities, it holds only 26 percent of America's outstanding foreign debt.
We don't want to minimize the debt problem or China's holding of U.S. debt. But it is wrong to say that the federal government is borrowing "primarily from China."
– Scott Blackburn