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Today the MSM question of the morning for Congressional Progressive Caucus members is a variant of this:

“Which is worse, voting for a debt ceiling increase bill that doesn't raise any revenue and that will lead to major cuts in discretionary programs, and in entitlements including Social Security, Medicare, and Medicaid, or voting to defeat  a bill that does that and causing the United States to go into a default.”

So, there it is: a false choice again, being used to make progressives look bad if they say they will vote against anything but a clean debt ceiling deal.

In replying to these questions, some progressives are saying, both are worse, and it's completely illegitimate to tie the debt ceiling vote to deficit reduction. Deficit reduction should be discussed separately when it's time to pass a budget. Of course, the progressives are right about what ought to happen. But the problem is that will have to decide whether to vote for a bill that will grievously hurt their constituents, or to vote against it.

What they most need to know at this point is that they have to reject outright the framing given in the question above. The choice is not between voting for default and voting for a terrible deficit reduction bill. The choice should have been put this way:

“Which is worse, voting for a debt ceiling increase bill that doesn't raise any revenue and that will lead to major cuts in discretionary programs, and in entitlements including Social Security, Medicare, and Medicaid, or voting to defeat  such a bill and placing the debt ceiling problem in the hands of President Obama to handle”

The answer to this properly framed question is that it is better to vote to defeat any such bill, and to leave the President to handle the problem. Make no mistake about it. The President can prevent the default himself. There are 6 options he can use, and he will have a constitutional duty to do whatever is in his power and authority to prevent default. Here are the 6 options:

-- Challenging the debt ceiling based on the 14th Amendment Section 4
-- Selective default
-- Proof Platinum Coin Seigniorage (PPCS)
-- Running an overdraft at the Fed
-- The Fed burning its Treasury Bonds
-- The “exploding option” plan

I've previously discussed them in some detail here and also analyzed and compared them. http://www.correntewire.com/...
I've also written many posts on PPCS, because I think it is the preferred alternative among the 6. I won't repeat what I've said earlier here. Instead, all I want to do is to emphasize that a vote against a “compromise bill” that doesn't compromise with progressives is not a vote for default.

It's a vote for the President to use his powers to solve the problem without requiring harmful spending cuts in an economy that can afford absolutely no cuts without corresponding spending increases.

So, make the President do it! Make him solve the problem and avoid a default! That is the best thing that progressives in Congress can do now to save the economy and begin to kill the current austerity mania that will destroy the futures of our children and Grandchildren.

And for those of us outside of Congress, the best thing we can do is to ask our Representative and Senators to vote against anything except a clean debt ceiling deal, and to point out to them that they would not be voting for default; but only for placing the problem in the hands of the President who will have to handle it without making a big deal that hurts most Americans and that also, incidentally, forces them to walk the plank! Tell Bernie Sanders! Tell Sheldon Whitehouse! Tell Al Franken! Tell Dennis Kucinich! Tell Raul Grijalva! Tell Keith Ellison! Tell Barbara Lee! Tell Donna Edwards! Tell Louise Slaughter! Tell Marcy Kaptur! Tell them all!

Tell them to make no mistake! Tell them in no uncertain terms, that we will not forgive them in 2012 for giving away parts of the social safety net; when they easily could have avoided it by voting for the President to take care of the problem without making a deal. The The President is dealing with the Republicans and going after our bread and butter! And Congressional progressives are aiding and abetting him by accepting false framings of the issue, and deluding themselves or trying to delude us into thinking they have no choice. Tell them that we do know they have a choice. Tell them to stop marching with the oligarchs, or we will find other Senators and Representative who will march with us!

(Cross-posted from Correntewire.com.

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Comment Preferences

    •  Yet it is STILL in Obama's hands!!!! (0+ / 0-)

      The president can make a very bold statement by vetoing the bill on constitutional grounds.  He has the hammer in this deal if the bill passes both houses.

      I would do so and take the higher road.  But he has made every move he could to limit the damage of the current  "House of Nutters".  In this country, the fat lady never sings.  By tying the debt limit to the budget, the Republicans gave Obama a hand to play.  Without it, we would be looking at a government shut down a la Minnesota.  As it is, That has been averted and Social Security and Medicare will be campaign issues for the 2012 elections.

  •  This "compromise" is like two parents... (5+ / 0-)

    who divorce and decide to cut their children in half so they can share them equally.

    Total lunacy.

  •  Excellent diary! (5+ / 0-)

    And the alternative to a clean bill is to not have austerity during the weakest recovery in history.  It means not removing the only driver of GDP as we are teetering on the edge of a double dip.  It means that the half a million goverment workers who have lost jobs due to Republican austerity measures have wiped out the private sector gains in employment, and is the sole reason that unemployment numbers have been so bad.

    The alternative is to call the bluff, ask for a clean bill and not give in to unprecedented deamands being injected into the debt cieling process.

    The alternative is one or a combination of the numerous options the Executive branch has to deal with the situtaion.  Remember the uproar by the Republicans when Obama released supplies for the SPR (Strategic Petrolium Reserve)?  We made money off that.  Gas prices plummeted and we got some much needed cash.  Do it again.  See how the oil lobby likes that result.  Sell some gold and see how the Glen Beck fueled gold speculators like that.  Sell some navy ships, its not like we haven't done that before.  Sold ships.  The Republicans would really love that move.  Or just act under the 14th amendment, mint the trillion dollar coin, etc.

    There are so many alternatives that the only conclusion is that both sides of the aisle are full of self interested idiots who only care about the next election over the best interests of the country.  How else could they ignore the lessons of 1937 and 1990's Japan.  I get pissed at the false equivalencies, but in this particular case, both sides (with few exceptions) have embraced the austerity meme, to our nations detriment.

    Time to stop being afraid.  A wise man (or speachwriter) once said, "The only thing we have to fear, is fear its self".  No truer word have been spoken.  Applied to post 9-11 reaction.  It applies to our debate today.

  •  You confident the markets would view it your way? (0+ / 0-)

    In other words, leaving it up to President Obama "to prevent the default himself" using one or more of your six options would have the same effect on the economy and the markets at home and abroad as a formal debt ceiling increase? Permit me to doubt that very much.

    But that outcome would be preferable because ... Progressives would be right?

    Obama and strong Democratic majorities in 2012!

    by TRPChicago on Sun Jul 31, 2011 at 11:48:40 AM PDT

    •  the markets (0+ / 0-)

      will fall short term.

      they will fall much more long term if any of these "deals" pass and put us into a double dip recession, or worse.

      Stop being ruled by fear.

      •  The "short term" promises to be long ... (0+ / 0-)

        ... if we don't get past this debt ceiling business. As for the "long term," Yes, a double dip recession you mention is looming  but it's not an either/or proposition with the debt ceiling.

        Sure, it would have been far better to have stimulus spending a first and higher priority than this narrow-focus preoccupation with the level of America's debt. But that train left the station a while ago, unfortunately, and the debt mess is now very much on the front burner.

        The way we get to policies and actions that pull or push us forward is to focus on those going forward, not to kill the debt ceiling deal.

        Obama and strong Democratic majorities in 2012!

        by TRPChicago on Sun Jul 31, 2011 at 12:34:32 PM PDT

        [ Parent ]

        •  Can't agree (1+ / 0-)
          Recommended by:
          psyched

          Killing a deal will force the President to handle it, and he won't have the option of making a deal then. he'll have to settle it without any budget cutting. Then the maneuvering will start for a new budget, and we'll have another opportunity to fight austerity. The longer we can drag this out, the more likely it is that we'll be able to pressure progressives not sacrifice the safety net on the cross of austerity. Facts are building up from around the world that austerity is failing. Our own economy is on the brink of a double-dip. If it's clear that we're in one by October, austerity-mania will recede, because the president will know by then that if he goes through this then he's dead duck next year. When that's clear to him; he may quit feeding the deficit/debt reduction nonsense. He's a stubborn man, but not so stubborn that he won't be able to see the writing on the wall.

          •  So let it get worse. Then the real problem, which (0+ / 0-)

            ... is our moribund economy, will be clearer. This will teach the President a lesson, and he will change his mind. And ...

            ... the role for the Republicans in this scenario would be to change their minds, too, perhaps as they see the public and the pundits agree that stimulus is a far better alternative than austerity? Or, the GOP risks losing a year from November. If they don't see this as clearly as we do, however, I think we'd have to forego any notion that the GOP would support stimulus or job creation. And that, Obama cannot enact by himself.

            I admire the boldness of your thinking and I completely agree that President Obama needs to feel pressure from the left to set him on the course he should have been on several months ago when this debt ceiling problem rose up. But expecting that the 14th Amendment or maybe magic coins will handle the crisis of confidence in debt obligations of the United States and that things will turn around before they get dramatically worse eludes me.

            Obama and strong Democratic majorities in 2012!

            by TRPChicago on Sun Jul 31, 2011 at 01:46:28 PM PDT

            [ Parent ]

    •  I'm confident (3+ / 0-)
      Recommended by:
      psyched, The Moonlit Knight, maddogg

      that the markets don't matter if the president chooses the PPCS option. In that case, he can mint a coin large enough to pay off 40% of the total debt within a week and most of the remainder over the next three years as the debt instruments mature. We'd never have to borrow back our own money again. So we really would not have to worry about the bond vigilantes or their markets. And, before you raise nonsense about this being inflationary, please read this and this.

      •  A magic coin? (0+ / 0-)

        Forgive me for being blunt, but does any respected economist support the coinage notion as an answer to the debt ceiling problem?

        Obama and strong Democratic majorities in 2012!

        by TRPChicago on Sun Jul 31, 2011 at 12:40:01 PM PDT

        [ Parent ]

        •  Sure (2+ / 0-)
          Recommended by:
          psyched, maddogg

          Jamie Galbraith, Warren Mosler, Randy Wray, Brad Delong, Paul Krugman, Stephanie Kelton, Scott Fullwiler, and God knows who else since it went mainstream over the past few days.

          Also, forgive me for disputing your label. The coin is not magic. It is just fiat money created by the United States. Guess what, all of our money is currently fiat money.

          Once the Fed credits the face value of the coin to the Mint's PEF account, and the Treasury sweeps that account, the TGA will be able to spend in the usual way, by marking up private sector reserve accounts. No magic involved!

          The only thing new here is that the Executive would be using a new method to fill the nation's purse. PPCS would replace borrowing back fiat money the United States previously issued, as the method used to fill the purse. Control over the purse strings, however still remains with Congress.

          •  You've thought about this more, obviously, but ... (0+ / 0-)

            ... I can't agree that Paul Krugman, for one, endorses the idea.

            What he said, in his NYT op ed piece a couple of days ago was:

            "These things [trillion dollar coins and exploding options to buy up all the US government's real estate] sound ridiculous — but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?"

            Krugman also said, "Outrageous behavior demands extraordinary responses. Over to you, Mr. President." But again, that's not much of an endorsement of the coinage alternative.

            Obama and strong Democratic majorities in 2012!

            by TRPChicago on Sun Jul 31, 2011 at 01:54:38 PM PDT

            [ Parent ]

          •  We also have (0+ / 0-)

            Mark Kleiman Professor of Public Policy UCLA says

            Is it legal? Arguably, it would be illegal not to do it. The President is bound by the Constitution and his oath of office to “take care that the laws be faithfully executed.” Appropriations bills are laws; he’s not allowed to impound appropriated funds, but must expend them. If the debt ceiling isn’t raised – won’t have the cash to do so unless he issues the trillion-dollar coins. And if that’s the only way to carry out his Constitutional duties, then he is not just allowed, but required, to do precisely that.

            Michael Froomkin, Laurie Silvers and Mitchell Rubenstein Distinguished Professor of Law, University of Miami, commenting in Brad DeLong's blog appears to agree. that coinage is aq legal way to circumvent the Debt Ceiling.

      •  Inflation (0+ / 0-)

        wouldn't hurt right now anyway.

  •  Apt, succinct and clear. (1+ / 0-)
    Recommended by:
    deben

    You are obviously not of this planet.

    "I was a big supporter of waterboarding" - Dick Cheney 2/14/10

    by Bob Love on Sun Jul 31, 2011 at 11:50:33 AM PDT

  •  I agree (1+ / 0-)
    Recommended by:
    The Moonlit Knight

    the nice thing is that we will know who, Republican and Democrat alike, either votes yes or no...their names will be recorded. ;)

  •  We will NOT default. Do the math (0+ / 0-)

    $30B in interest/month  $200B in revenues.  There will be pain, but we won't default.

    We have to push this past Aug2!  When we get close, they will ask for a temporary extension, and then the ball is in the Republican court and they will be the ones to default.

    If we go past Aug 2 there will be pain, but it will be short lived and we can fix it.  If we capitulate there will be a lot of pain for generations and it may never get fixed.

    •  Sorry, pollwatcher (3+ / 0-)
      Recommended by:
      psyched, deben, The Moonlit Knight

      The problem is not just interest. Its debts falling due requiring the payment of principal as well. Usually we roll the debt we can't do so here. in addition, SSA trustees may be forced to present the SS bonds to Treasury to make payments to recipients. If the bonds are presented for redemption, they will become immediate debts of the United States adding to the numbers that immediately have to be paid.

      I do agree that progressives should never compromise on this. They should cause the President to exercise an option. That will postpone the crisis until budget time this fall.

      •  Interesting points, but if I may counter (1+ / 0-)
        Recommended by:
        The Moonlit Knight

        We should have no difficulty at all of rolling over debt.  We will simply exchange an old bond for a new one, which will not increase the debt.  I'm not sure why the SSA trustees would be forced to present their bonds, and I'm even less sure that they could even do it.  You'll have to provide a link to this argument.

        •  Three links that reveal (1+ / 0-)
          Recommended by:
          psyched

          the complexities of the situation:

          http://my.firedoglake.com/...

          http://www.huffingtonpost.com/...

          which are largely supportive of your point;

          But this is not:

          http://www.cnn.com/...

          This piece is largely about options if there's no agreement in Congress, but there is some discussion of the operational difficulties that will present themselves in rolling over debt. I know something about the complexities involved here; and I think Jack Balkin has the right of it. There are going to be slip-ups here and it won't be easy to roll over that debt and stay under the ceiling, especially if this is being done in an atmosphere on uncertainty.

    •  I think we will be past August 2nd regardless (1+ / 0-)
      Recommended by:
      pollwatcher

      No time to pass and implement.

  •  Edited your diary, Letsgetitdone, (2+ / 0-)
    Recommended by:
    Letsgetitdone, maddogg

    to cut out accidentally repeated paragraphs.
    Hope you don't mind.

    BTW, great diary, as usual!


    For the first time in human history, we possess both the means for destroying all life on Earth or realizing a paradise on the planet--Michio Kaku.

    by psyched on Sun Jul 31, 2011 at 01:05:52 PM PDT

    •  Thanks psyched (2+ / 0-)
      Recommended by:
      psyched, maddogg

      for covering my butt. I appreciate it and thanks for your kind words too. Did you see Seneca Doane's diary?

      •  I certainly did, but not until late Saturday. (0+ / 0-)

        I couldn't read all of SD's diary because it was getting too late in the early morning. I was going to email you about my enthusiasm that all your great persistence on this issue is finally starting to pay off with the issue going viral.

        I guess it helps to have someone already well known on DKos to latch on to a topic and draw over 1500 viewings already. Great that you apparently were able to persuade him to see the light.

        I am feeling somewhat more optimistic.


        For the first time in human history, we possess both the means for destroying all life on Earth or realizing a paradise on the planet--Michio Kaku.

        by psyched on Sun Jul 31, 2011 at 02:18:00 PM PDT

        [ Parent ]

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