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During the last debt ceiling crisis, there was talk of President Obama invoking the clause in the 14th amendment to the Constitution, which states:

Sect. 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

He was then loathe to do so because it would open new territory in constitutional law and there would have been a huge legal upheaval. He was fortunately spared from that by reaching a compromise with the Republican bandits that were holding the country hostage at that time. The compromise included the present sequester that at this point has not satisfied the Republicans, who are demanding even more concessions. Fortunately, Obama has recognized that and is no longer willing to concede more to the insatiable extortionists.

At this point, not willing to give any more ground, he is faced with a choice.Either the Republicans cave and agree to a continuing resolution and a raising of the debt ceiling or the entire world economy is thrown into chaos. The latter alternative is completely unacceptable and I think Obama knows that full well. So the choice comes down to a Republican defeat or the invocation of the 14th amendment. This foray into uncharted constitutional territory appears to be the better alternative for reasons explained beneath the curly-cue.

Let's say the standoff goes until, say, October 10th, a point at which world financial markets can be predicted to be in full panic mode. What is Obama to do?

He cannot cave and end the grand experiment of the American Democratic Republic. He cannot allow the world economy to tank due to the ego games of a bunch of psychotic maniacs. He must, must invoke the 14th amendment. Here is what I expect to happen if he does that:

He goes on national television from the Oval Office and announces that in light of an impending world economic crisis he is instructing the Treasurer of the United States to continue to honor the debt obligations of this country based on the 14th amendment, which transcends any other laws that may be in effect to the contrary. Of course, all hell breaks loose.

But the Treasurer sees himself obliged to follow the Executive Order of the President and continues to service the country's debt. Financial markets, while not totally calmed, do not erupt in panic. Much of the nation gives an at least temporary sigh of relief.

But the Republicans explode and threaten impeachment.

At that point, we are put through another melodrama of impeachment by the House. A committee made up of wingnuts will forward Articles of Impeachment to the full House, which will solemnly pass them leading to a trial in the Senate. The country will at that point think that Obama is a hero for saving the country from catastrophe but that will not stop the Republican lynch mob. The trial in the Senate will take its course, but will of course end in acquittal because it takes a 2/3 majority to convict and the Senate is controlled by Democrats. Obama emerges as a hero and the Republicans then get to face the 2014 election.

At that point, a precedent will have been set on the matter of the debt ceiling and we will never have to go through this kabuki dance again.

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Comment Preferences

  •  Fingers crossed. (3+ / 0-)
    Recommended by:
    Hummingbird, True North, BlueDragon

    If he can tip toe through the mine fields until 2014, the GOP will get crushed, imv. There will be plenty of pain and anger fresh on everyone's mind.  

    Something evil this way comes.

    What is so unnerving about the candidacy of Sarah Palin is the degree to which she represents—and her supporters celebrate—the joyful marriage of confidence and ignorance. SAM HARRIS

    by Cpqemp on Mon Oct 07, 2013 at 10:46:20 PM PDT

  •  I don't agree. This is a restriction on Congress (3+ / 0-)
    Recommended by:
    FiredUpInCA, Murphoney, elmo

    and especially on the courts, from doing anything that would repudiate the debt of the United States.  I don't see it as a grant of authority to anyone to do anything affirmative.

    You have exactly 10 seconds to change that look of disgusting pity into one of enormous respect!

    by Cartoon Peril on Mon Oct 07, 2013 at 10:50:06 PM PDT

    •  Perhaps (3+ / 0-)

      Let a court determine that if need be.  But that shouldn't prevent him from acting to save the country from disaster in the meantime.

      "When dealing with terrorism, civil and human rights are not applicable." Egyptian military spokesman.

      by Paleo on Mon Oct 07, 2013 at 11:04:56 PM PDT

      [ Parent ]

      •  Meanwhile, who's gonna buy bonds that might be (1+ / 0-)
        Recommended by:
        Deathtongue

        no good?

        You have exactly 10 seconds to change that look of disgusting pity into one of enormous respect!

        by Cartoon Peril on Mon Oct 07, 2013 at 11:09:49 PM PDT

        [ Parent ]

        •  Who's gonna buy them if he doesn't act? (0+ / 0-)

          "When dealing with terrorism, civil and human rights are not applicable." Egyptian military spokesman.

          by Paleo on Mon Oct 07, 2013 at 11:15:49 PM PDT

          [ Parent ]

        •  I don't disagree with this (2+ / 0-)
          Recommended by:
          Cartoon Peril, sawgrass727

          I just disagree that the whole "debt limit" thing is constitutional in the first place. Practically Obama can't do anything. Trillion dollar coins and invoking the 14th are a no go because it sets up the situation where one part of the gov't is backing debt and the other part is not. So you're right, no one is going to buy that but the most speculative investors. But one almost wishes that this stupid debt limit law would come before the Supreme Court so we could dispense with it once and for all. Congress already authorized the spending, therefore the "debt limit" has already been raised.

          Patriot: the person who can holler the loudest without knowing what he is hollering about. Mark Twain

          by Deathtongue on Mon Oct 07, 2013 at 11:26:18 PM PDT

          [ Parent ]

          •  Obama's invocation of the 14th (1+ / 0-)
            Recommended by:
            buffie

            would almost definitely bring the matter before the Supreme Court as well. There may be no other way to bring it there other than creating a significant case that can be adjudicated.

          •  Why not sell Fixed Interest Payment ... (0+ / 0-)

            ... Consol Bonds?

            Trillion Dollar Coins are not debt, so its not a situation where one part of Government is backing debt and the other is not. Trillion Dollar Coins are allowed by law, and if the Congress wishes to change that fact, they can always pass a new law, over Presidential Veto if necessary, and amend or repeal it. But one faction of one party of One Chamber of the Congress is not by itself sufficient to remove Trillion Dollar Coins from being allowed by law.

            The Constitutional Crisis with Trillion Dollar Coins is rather with our Monetary system, if the Federal Reserve refuses to accept a coin that by law should be acceptable. And people are sufficiently confused by how modern money works that that Constitutional crisis could well rebound to the benefit of the Republicans.

            Consol Bonds do not risk that Constitutional Crisis, and so they should be the first resort.

            Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

            by BruceMcF on Tue Oct 08, 2013 at 01:17:30 AM PDT

            [ Parent ]

          •  If you do away with the debt limit (0+ / 0-)

            you have to go back to having Congress authorize the issuance of individual Treasury sales. I don't see that as a real improvement to the problem.

        •  serious collectors (1+ / 0-)
          Recommended by:
          Cartoon Peril

          Righteousness is a wide path. Self-righteousness is a bullhorn and a blindfold.

          by Murphoney on Tue Oct 08, 2013 at 03:32:13 AM PDT

          [ Parent ]

    •  Wouldn't not raising the debt ceiling (1+ / 0-)
      Recommended by:
      Cartoon Peril

      "repudiate the debt of the United States". After all, congress already authorized the spending. By not raising the ceiling aren't they just saying they're not going to pay for what they already bought? Isn't authorizing spending already "raising the debt ceiling"?

      Patriot: the person who can holler the loudest without knowing what he is hollering about. Mark Twain

      by Deathtongue on Mon Oct 07, 2013 at 11:15:31 PM PDT

      [ Parent ]

      •  Maybe, not sure. Seems like the constitution (1+ / 0-)
        Recommended by:
        Deathtongue

        says the debt shall not be questioned, but I think if money was redirected to pay debt, that would not be a violation.  Whether that is legal or practical, I don't know.

        You have exactly 10 seconds to change that look of disgusting pity into one of enormous respect!

        by Cartoon Peril on Mon Oct 07, 2013 at 11:30:04 PM PDT

        [ Parent ]

      •  Only if the debt ceiling left no alternative ... (0+ / 0-)

        ... other than default. However, since as a default of the letter of the law, it leaves a loophole that allows default to be avoided, it can only be said to modify the manner by which the debt is honored, and that would seem to be within the legitimate powers of the Congress.

        Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

        by BruceMcF on Tue Oct 08, 2013 at 01:19:25 AM PDT

        [ Parent ]

    •  Creating the debt ceiling was the problem (0+ / 0-)

      at least it's the problem once it isn't raised as needed.

      I object to violence because when it appears to do good, the good is only temporary; the evil it does is permanent.

      by Futuristic Dreamer on Tue Oct 08, 2013 at 12:22:57 AM PDT

      [ Parent ]

    •  However, since the President can take action to .. (0+ / 0-)

      ... avoid default, for example by ordering the Treasury to  sell FIP Consol Bonds, isn't he obliged by his oath to defend the Constitution, which includes the 14th Amendment, to do just that?

      Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

      by BruceMcF on Tue Oct 08, 2013 at 01:12:06 AM PDT

      [ Parent ]

    •  Valid government debts (0+ / 0-)

      can still be defaulted on. The holder then sues for payment, and if the issuer has any available assets, gets paid in whole or in part.

      If a debt is invalid, though, the issuer doesn't have to pay even if it is rolling in cash.  

      No one is suggesting that the existing obligations of the U.S. are invalid; we might temporarily default in paying principal and/or interest on some of them, though. This can happen and has happened before (in 1979).

  •  Considering the Definition of Sedition (5+ / 0-)

    Maybe we could see a few arrests too...  

    18 USCS § 2384. Seditious Conspiracy.
    "If two or more persons in any State or Territory, or in any place subject to the jurisdiction of the United States, conspire to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, or to oppose by force the authority thereof, or by force to prevent, hinder, or delay the execution of any law of the United States, or by force to seize, take, or possess any property of the United States contrary to the authority thereof, they shall each be fined under this title or imprisoned not more than twenty years, or both."

    http://definitions.uslegal.com/...

    Is it true? Is it kind? Is it necessary?

    by Hummingbird on Mon Oct 07, 2013 at 10:51:47 PM PDT

  •  Cardshark - I don't share your view of what will (2+ / 0-)
    Recommended by:
    sawgrass727, valion

    happen if no debt ceiling bill passes Congress. The Treasury, Fed, and major Wall St banks can work together to make sure all maturing Treasury securities are redeemed on a timely basis and rolled over. That doesn't require an increase in the debt ceiling. The Treasury will have plenty of cash flow, the IRS will still be collecting revenue during the shutdown. The Secretary of the Treasury uses some of that cash to pay interest on Treasury securities. That action could be challenged in Court, but I don't think the House GOP will challenge that action or make any actual moves to start an impeachment investigation against the President or Treasury Secretary.

    "let's talk about that"

    by VClib on Mon Oct 07, 2013 at 10:52:34 PM PDT

    •  Congress is responsible to fulfill all federal (1+ / 0-)
      Recommended by:
      buffie

      Financial commitments.  Period.

      •  So what? (1+ / 0-)
        Recommended by:
        martianexpatriate

        I think the diary author and I are speculating on what will happen if by October 17th no debt limit increase has been passed. At that point the President can recite your statement that Congress is responsible to fulfill all federal financial commitments, period, but in addition to that what is his action plan? I don't think there will be an agreement by the 17th so I hope the President does have an action plan. I have outlined what I think it could be and it's different than the diary author's.

        "let's talk about that"

        by VClib on Mon Oct 07, 2013 at 11:20:54 PM PDT

        [ Parent ]

        •  So what? What is that? Is that just another (0+ / 0-)

          Threat to America?  So what?  So what if America defaults?  I have family members in school.  I have family members in college.  I have family members on Medicare.  I, myself,  like to go to museums and parks and I pay my taxes so I don't want a minority of our government to threaten and shut down everything.  That's not the American way.

          If any other business was shu down like this people would be fired.  People need to be fired.  Those people are the Republicans who failed their promise to the American public.

    •  You completely misunderstand what the debt ceiling (1+ / 0-)
      Recommended by:
      Hummingbird

      is about. It is a more or less fictional commitment to pay the debts that have already been incurred. In other words, it is a psychological assurance of reliability backed by the government of the United States. It is not about the ability of the US to pay its bills; it is about the willingness of the US to pay its bills.

      The debt ceiling raising has always been an unnecessary assurance to the world that we are reliable and the world economy borrows and lends based on that confidence. It's all mostly a fiction but of such things is theworld economy made.

      •  Sorry, no (0+ / 0-)

        It's a technical legal requirement for the validity of the issuance of government bonds. The issuance of public debt must be approved by the governing body of the issuer. Here, that's Congress.

        You can have Congress approve each issuance of T Bills, like the old days, or you can have a debt ceiling where they approve the issuance of debt in the aggregate up to $X amount.

  •  If he doesn't use it (3+ / 0-)

    he would fail in his responsibilities as president.  

    "When dealing with terrorism, civil and human rights are not applicable." Egyptian military spokesman.

    by Paleo on Mon Oct 07, 2013 at 11:02:38 PM PDT

  •  It's time that the House Republicans live up (2+ / 0-)
    Recommended by:
    Ianb007, Futuristic Dreamer

    To their oath of office!

    •  Im not seeing any indication (1+ / 0-)
      Recommended by:
      Hummingbird

      that they will do that.  They just don't care.  Some of them appear completely oblivious to what is even happening.  Some of them seem to not understand what a debt limit is.  

      Ignorance more frequently begets confidence then knowledge. Charles Darwin

      by martianexpatriate on Mon Oct 07, 2013 at 11:37:33 PM PDT

      [ Parent ]

  •  Perry v. U.S. - 1935 (2+ / 0-)
    Recommended by:
    VelvetElvis, White Buffalo

    There was a Supreme Court case in 1935 that deals with this section.

    It is worth reading.

    http://supreme.justia.com/...

  •  My understanding is (0+ / 0-)

    that Obama's counsel has looked into this option and found it's not do-able. What happens if he does it, it ends up in the Supreme Court and they rule against his action?

    In 2011 he may have avoided doing so because of re-election concerns and distractions, but now he would have no reason not to pursue that option. Therefore I suspect they've determined the cons outweigh the pros.

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