Showdown encourages citizens to give gifts to reduce debt

July 24, 2011

As President Obama and Congress struggle to tame the nation’s runaway borrowing, a stream of checks, cash and even gold coins is pouring into a post office box in West Virginia where, for years, people who want to help pay down the national debt have been able to send gifts.

“I love my country. I don’t want it in debt like this. I don’t want it having a financial crisis,” said Jane Olive, a retired teacher in Las Vegas who sent $100 to the PO box this month.

But the contributions don’t specifically go to pay off existing debt. The government deposits them in the Treasury Department’s general fund, in essence the government’s main checking account.

“The gifts go toward funding the federal government, not to pay off the debt,” said Mckayla Braden, a spokeswoman for the Bureau of the Public Debt.

Since the contributions can reduce the amount of money the government would otherwise have to borrow to cover its expenses, federal officials stress they are complying with the 50-year-old law enabling the public to give gifts to lower the debt. “The government doesn’t have to borrow more,” Braden said.

In soliciting donations on its Web site, the bureau says simply: “How do you make a contribution to reduce the debt?” It provides two options: online payment and the address of the PO box.

Some contributors feel misled.

“I’m very disappointed,” Olive said after learning from a reporter that her gift will go into the general fund. She had felt so strongly about helping get the United States out of hock that she had e-mailed friends and relatives, urging them to make similar donations. Some did. But now, she said, “I can’t encourage my friends to sacrifice extra money.”

Chuck Landenberger, 79, a retired postal worker in Hawaii whose father lobbied Congress to pass the law enabling the public to make the gifts, was also dismayed.

“There should not be that money available for the Congress to spend after the contributor has said, ‘I want it to reduce the debt,’ ” he said.

Since President John. F. Kennedy signed the law into effect in June 1961, people have donated about $81 .7 million to help retire the public debt, federal records show. The gifts are tax-deductible and can be submitted electronically or via mail to PO Box 2188 in Parkersburg, W.Va, which is maintained by the Bureau of the Public Debt’s Parkersburg office.

About 30 to 50 gifts come into the post office box each month, said Kimberley Krupinski, supervisor of accounts receivable at the Parkersburg office. The average gift is under $500. The donations are often accompanied by letters, such as one from a war veteran expressing gratitude for a successful surgery or another from an immigrant expressing thanks to his adopted country, Krupinski said.

“A lot of them are doing it out of patriotism and their love for America,” she added.

In return, donors get a thank-you letter from the bureau, saying, “Your contribution will help ensure that we do not burden future generations with a huge debt.” No specifics are offered about how the money is used.

Leila Gardunia donated $200 on Tuesday. That very day, the public debt accrued about $704 million in interest, according to the Treasury’s Web site, making her gift equivalent to about two-sevenths of one ten-thousandth of one percent of just one day’s interest. But for Gardunia, a stay-at-home mom with four children, the math isn’t as important as the message her gifts sends to Washington.

“I think the American people are stronger than the politicians give us credit for,” she said. “Our politicians need to be able to sacrifice and to compromise,” she added, since Americans like her are willing to do their part.

Robert Bixby, who leads the Concord Coalition, a grass-roots organization devoted to promoting fiscal responsibility in Washington, agreed that translating the patriotic sentiments of donors into action by politicians is key — even more so than the donations themselves.

“Anybody who’s serious about controlling the debt needs to get behind some sort of debt reduction plan” and “put pressure on candidates” to deliver on that plan during the next election, Bixby said.

Congress established the gift-giving program in 1961 so that the Treasury could accept $20 million from a wealthy Texan named Susan Vaughn Clayton, who dedicated the money “to my beloved country” when she died in 1960, according to her granddaughter, Burdine Clayton Johnson. The Claytons had plenty to be grateful for: They had made a fortune in the cotton trading business, and Susan’s husband, Will, helped craft the U.S. policy of aiding Europe after World War II when he served at the State Department.

Thirty years later, the gift inspired Lucile McConnell, a tax attorney working in the District, to start the Fund to End the Deficit, a grass-roots organization devoted to encouraging Americans to contribute their spare pennies to pay down the national debt — then a mere $3 trillion, plus change. McConnell went to schools and held fundraisers, concerts, news conferences and award banquets to try to get Americans to contribute to the cause, eventually raising $8,000 before disbanding the fund in 1999.

With the national debt now nearly five times what it was then, McConnell recently took the organization’s mascot, a giant penny costume dubbed Mr. Penny, out of her Randallstown, Md., home. She will soon restart her crusade.

When McConnell learned that her pennies did not go directly to repaying the debt, she said she was saddened. But she still believes that the PO box, and the generosity it has inspired, is the best way to help tackle the country’s debt.

“It gives me the right to be a citizen and not a mere consumer,” McConnell said.

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