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Ron Johnson. Wisconsin has a lot to answer for.
It's that time of year again, what to do in the face of Republican threats to push the country into default! Oh, and this time, Republicans have a primer on How To Stop Worrying And Love Default:

Q: [T]he Treasury Department came out with [a report] that said that if the US does not raise the debt ceiling in time that there would be a catastrophic effect on the economy[.]

[Sen. RON JOHNSON (Tea Party Republican Wisconsin]: I think that’s – I think that’s highly irresponsible for the Treasury Department to be issuing those kinds of, I mean scare-mongering reports. The Treasury Department, I think the Secretary of the Treasury, I think the President of the United States ought to be trying to calm the markets, rather than scare them. The President really ought to be leading here. [. . .] There is absolutely no reason at all for this type of government to default even if we don’t increase the debt ceiling. So I think it’s highly irresponsible of this Administration to be doing the type of scare-mongering they’re doing on this issue.

Wall Street is sanguine and thinks the absurdities of Ron Johnson and Ted Yoho do not matter, but I think they may be wrong, and I worry that President Obama is not setting the stage for the actions he may have to take in response.

The issues are practical, default would be catastrophic for the nation, and constitutional, the 14th Amendment prohibits federal government default. But the president's men have taken the unusual (and imo, wrong) position that his hands are tied. I'l explain why they are wrong on the flip.

Last December I wrote a post titled Public debt of the United States shall not be questioned: the 14th Amendment and the debt ceiling (also More on . . .) I argued the Obama Administration was wrong to state it "does not believe that the 14th Amendment of the U.S. Constitution allows the president to ignore the debt ceiling[.] Carney's comments dismissed the possibility that President Barack Obama could have a constitutional option to get around Congress if lawmakers failed to do so." (Reuters)

I argued that the Constitution, Article 1, Section 8 of the Constitution provides:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

[...] To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures; [...] [Emphasis supplied.]

Article 1 makes clear that it is the Congress that is empowered to "borrow money" and "pay the debts" of the United States. But of course, it is the Executive Branch, through the Treasury Department, that actually executes these functions. Nonetheless, Article 1 makes clear it is the Congress who is empowered to authorize such actions. But this does not end the Constitutional analysis. In 1868, the 14th Amendment to the Constitution was ratified. While the most famous parts of the amendment are well known (the equal protection and due process clauses of Section 1 of the 14th Amendment), Section 4 of the amendment also provided for a constitutional guarantee of the payment of the debt of the United States:
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. [...]
Thus, while Congress has the power to borrow and pay the debt of the United States, Section 4 of the 14th Amendment imposes on the entire government of the United States the obligation to pay debt authorized by law. In the 1935 case Perry v. United States (in dicta to be sure), the Supreme Court stated:
The Fourteenth Amendment, in its fourth section, explicitly declares: "The validity of the public debt of the United States, authorized by law, . . . shall not be questioned." While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the Government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle, which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the Amendment was adopted. Nor can we perceive any reason for not considering the expression "the validity of the public debt" as embracing whatever concerns the integrity of the public obligations.
This raises two questions in the current situation regarding the debt ceiling: (1) can the statutory debt ceiling trump the constitutional requirement that U.S. debt be paid? The answer is obvious, no. The Constitution is supreme to all legislative enactments. The second question is is the debt ceiling, on its face, unconstitutional? I would argue no because the existence of a debt ceiling does not, in and of itself, put into question the validity of U.S. debt. However, as applied in the current circumstances, the debt ceiling does appear to be unconstitutional (a quasi "as applied" analysis you might say).

So what if anything can the president do about this? First, let's consider what he is obligated to do under the Constitution. Article II defines the powers and responsibilities of the president. Beyond vesting the executive power in the president, Article II expressly provides that the president "shall take care that the laws be faithfully executed."

The president's duty to take care that the laws be faithfully executed applies both to the Constitution and duly enacted legislation of the Congress.

The Congress has enacted legislation that will likely be in conflict shortly—the debt ceiling and appropriations that will cause the United States to exceed the debt ceiling. The spending authorizations postdate the debt ceiling enactment.

What leeway if any, does the president have with regard to choosing what laws to "faithfully execute" here? In the normal course, the president would have a great deal of flexibility when faced with conflicting legislative directives. However, whether the president wishes to respect the debt ceiling is not the deciding question on this discrete point: the president does not have, in normal circumstances, the power to borrow on behalf of the United States. The Constitution provides that power to the Congress. Thus, looking solely at this discrete issue, the president does not have the practical power to ignore the debt ceiling because he does not have the power to borrow on behalf of the United States.

But what of Section 4 of the 14th Amendment? Doesn't the president have a duty to "faithfully execute" its provisions? Indeed he does. And, should the debt ceiling violate the 14th Amendment, it is my view that the president would have the duty to abide by Section 4 of the 14th Amendment, even if that requires violating the debt ceiling. And if that requires borrowing on behalf of the United States, it is my view that Section 4 of the 14th Amendment would so empower the president.

However, such duty would only arise when the validity of U.S. debt is imperiled, to wit, when it is time to make debt service payments. And before the president could invoke this 14th Amendment power, he would have to, at least in my opinion, exhaust other remedies, including NOT "faithfully executing" the spending appropriations enacted by Congress, and instead insuring that US debt is timely serviced.

But the Obama Administration has said, and there is support for their statements, it does not possess the power to prioritize payments:

Morgan Stanley recently published an FAQ on the debt ceiling, and this was the first question.

In the Event Congress Fails to Raise the Debt Ceiling, Is the Treasury Allowed to Prioritize Its Obligations?

Bottom Line : No, there is no legal basis for the Treasury to prioritize payments. As noted in our previous report, if the debt ceiling is not raised before October 17th, the Treasury will have approximately $30 billion left in the coffers to fulfill its obligations.

If this is the case, then on or around Oct. 17, 2013, Section 4 of the 14th Amendment will be violated. And the president can do nothing about this? I disagree. Last year I wrote:

Practically speaking, many commenters have rightly noted that issuing new debt on the President's 14th Amendment authority would likely be costly, if there is a market at all. It surely is not the first option.

The first option is a rolling government shutdown. (Indeed, this would have to occur in my view before the President could contemplate issuing new debt on his own authority, invoking the 14th Amendment.) [And has already happened in the present crisis.]

The interesting part of that path is that, in my view, the president will be free to prioritize as he sees fit what parts of the government get shut down first. For example, the president could suspend certain Pentagon projects that Congress wants but that the Pentagon says it does not need.

It also would basically void the sequestration requirements of the budget deal of August 2011 (requirements the president has basically been ignoring, to no protest from anybody). Congress could not protest that the law was not being followed as they failed to permit the issuance of new debt that is necessary to enact their spending appropriation measures.

It's not apparent to me that anyone would have standing to challenge the president's de facto line item veto in such a case. While the Supreme Court has ruled that the line item veto is unconstitutional, I'm not sure how they could get at this scenario. In Clinton v. New York, the Court ruled the City of New York had standing to challenge the Congressional grant of a line item veto:

They invoked the District Court’s jurisdiction under a section entitled “Expedited Review,” which, among other things, expressly authorizes “any individual adversely affected” to bring a constitutional challenge. §692(a)(1).
No such grant of standing is available here. As Lawrence Tribe noted in 2011, there is no "plausible point of entry" for the courts here.  On the legal claim itself, the Court stated:
the presidential actions at issue have amended two Acts of Congress by repealing a portion of each. Statutory repeals must conform with Art. I, INS v. Chadha, 462 U.S. 919, 954, but there is no constitutional authorization for the President to amend or repeal. Under the Presentment Clause, after a bill has passed both Houses, but “before it become[s] a Law,” it must be presented to the President, who “shall sign it” if he approves it, but “return it,” i.e., “veto” it, if he does not.
Obviously, the exigencies the president will have to engage in should there be a debt ceiling forced government shutdown, on its face, violates the Presentment Clause. The question is what does the Constitution require in this case? After all, at that point in this hypothetical, the validity of the public debt is probably on shaky ground as well.

Could the president, in an effort to avoid violations of the Presentment Clause and Section 4 of the 14th Amendment, argue that he is constitutionally empowered to issue new debt? I think he could.

But in the meantime, the president would have the discretion to direct available spending as he deems best. And if March 2013 rolls around and there is no resolution of the debt ceiling issue, the president may be forced to act. No reason to take that option off the table.

Indeed, October 2013 has rolled around and these options need to be on the table. In yesterday's New York Times, Sean Wilentz wrote:

[A]rguing that the president lacks authority under the amendment to halt a default does not mean the executive lacks any authority in the matter. As Abraham Lincoln well knew, the executive, in times of national crisis, can invoke emergency powers to protect the Constitution.

Should House Republicans actually precipitate a default and, as expected, financial markets quickly begin to melt down, an emergency would inarguably exist.

In all, the Constitution provides for a two-step solution. First, the president can point out the simple fact that the House Republicans are threatening to act in violation of the Constitution, which would expose the true character of their assault on the government.

Second, he could pledge that, if worse came to worst, he would, once a default occurred, use his emergency powers to end it and save the nation and the world from catastrophe.

I agree with Professor Wilientz.

Originally posted to Armando on Tue Oct 08, 2013 at 07:09 AM PDT.

Also republished by Badger State Progressive and Daily Kos.

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Comment Preferences

  •  Tip Jar (130+ / 0-)
  •  All attempts to force Obama to use (41+ / 0-)

    "extraordinary powers" are 1/ an abrogation of Congress' responsibility to do Congress' duty and 2/ an attempt to steer him into an impeachable action - the ultimate aim.

    Still enjoying my stimulus package.

    by Kevvboy on Tue Oct 08, 2013 at 07:12:39 AM PDT

  •  If they believed they could take unilateral action (28+ / 0-)

    should they even say so? If they did, it would undoubtedly empower the economic terrorists more.

  •  Start a chain e-mail letter saying that (53+ / 0-)

    Obama wants the debt ceiling breached so he can use the resulting emergency to change the constitution and run for a third term.  

    You'd have a clean debt ceiling raise in no time.

    Glenn Greenwald promotes far-right fringe extremist group The Oath Keepers - https://twitter.com/ggreenwald/statuses/377787818619064320

    by Jacoby Jonze on Tue Oct 08, 2013 at 07:19:58 AM PDT

  •  IMF chief warn of global depression (7+ / 0-)

    If  the US default on it debt, by the way it   bad timing releasing the new  100 dollar bill today

  •  Josh Marshall had some good points on this. (13+ / 0-)

    This stuff goes way over my head but he argues that if the President issues more debt the bonds would be a difficult sell because if the GOP takes it to the Supreme Court and wins the bonds would be worthless so people would be hesitant to buy them. If the President decides to pay some of the debts but not others that ruins our full faith and credit worthiness since we would default on others.

    http://talkingpointsmemo.com/...

    This may not apply to what you were saying but I think he made some good points.

    Most of the people taking a hard line against us are firmly convinced that they are the last defenders of civilization... The last stronghold of mother, God, home and apple pie and they're full of shit! David Crosby, Journey Thru the Past.

    by Mike S on Tue Oct 08, 2013 at 07:31:34 AM PDT

    •  Relevant Graf: (8+ / 0-)
      The whole point of a reserve currency, a debt obligation that is regarded as having essentially zero risk, is that it has regularity, certainty a total lack of surprises. Let's say the President takes the 14th Amendment route, which I guarantee you he won't. Wall Street types could give us the exact amount. But those treasuries would need to be heavily discounted because they would certainly be the focus of a series of lawsuits that would take time to settle since the move is at best constitutionally questionable. How much less will you pay for that 14th Amendment bond since there's a chance the Supreme Court might eventually decide it's invalid and needn't be honored? What risk do you factor in that the President gets impeached over the move and Congress and the next President expressly renounce the obligations? And if you're wondering, is it even remotely possible that on the day those securities go on auction the airwaves won't be filled with House Tea Partiers warning people not to buy them because they're illegal and lack the full faith and credit of the USA?

      So sure you'll buy the treasuries that the US government has been selling and making good on for over two centuries since they come with the full faith and credit of the United States of America. But how much will you pay for the ones the President says he's behind but part of the Congress doesn't? Same with the platinum coin. Even more so with cockamamie ideas about paying some people and not others.

      Most of the people taking a hard line against us are firmly convinced that they are the last defenders of civilization... The last stronghold of mother, God, home and apple pie and they're full of shit! David Crosby, Journey Thru the Past.

      by Mike S on Tue Oct 08, 2013 at 07:34:29 AM PDT

      [ Parent ]

    •  It goes to what I am saying (5+ / 0-)

      But not convinced by Marshall's arguments frankly.

    •  Obvious 1st choice is default on bonds held by SSA (0+ / 0-)

      The obvious first choice is to default on the special series, non-marketable U.S. Government bonds held by the Social Security Administration Trust Fund. This would be the obvious preference for political elites, who are pretty much united in their preference to "kick the poors" before any pain is imposed on the investing class. Then there are the government bonds held by other national government trust funds. Next would be government bonds held by state government agencies, including state pension funds. Next they will probably default on bonds held by union pension funds.

      In other words, given the plutocratic/oligarchic character of political rule in the U.S. now, it will be a long time before the actual plutocrats are directly harmed.

      A conservative is a scab for the oligarchy.

      by NBBooks on Tue Oct 08, 2013 at 10:07:19 AM PDT

      [ Parent ]

      •  Actually the first in line (2+ / 0-)
        Recommended by:
        NBBooks, semiot

        for default would be the Fed.They own roughly 33% of the outstanding public debt. The Chinese and Japanese are looking at old balances. They haven't been in the market with any weight since the last threat.

        The Fed has been using the treasuries to validate it's 85B a month money print scheme.  They have been monetizing the debt for awhile.

        Bernanke is a key person here who hasn't been discussed much.

        There are other  sources of money.Fannie and Freddie are sitting on a ton of money at this point since half the monthly 85B is has been to purchase defective mortgages buried in MBS from Fannie and Freddie. They have been showing huge profits as a result.But according to some GAAP experts they should be showing far more.

        If the 85B stops then the stock market will collapse.

        “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

        by Dburn on Tue Oct 08, 2013 at 12:03:41 PM PDT

        [ Parent ]

    •  The Fed would buy the bonds (1+ / 0-)
      Recommended by:
      semiot

      Just as they have with the T-Bills when they print money.They return the interest payments to the treasury at the end of the year. If the WH hasn't alienated Bernanke who still wields more power than all of them, they could possibly work it out.

      Many of these bonds are coming due, especially short term treasuries that need to be rolled over.We have to borrow first in order to pay the bond holders off or it has to come out of existing cash flow which is going to be very negative.

      It's just like a business that goes to it's knees.People stop going there and people who owe money suspend payment.In this case they would probably take a penalty to insure liquidity if a major default happens.That means the Govt cash flow will go more negative.

      Whatever happens, I don't think either side is going to be able to declare political victory if they let it go past all the deadlines.

      “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

      by Dburn on Tue Oct 08, 2013 at 11:54:04 AM PDT

      [ Parent ]

  •  It'll end up in the Robert's Supreme Court (2+ / 0-)
    Recommended by:
    mikejay611, Armando

    I wrote this about a week ago:

    Will Scalia and Thomas Crash the worlds economy?

    Invoking the 14th Amendment would certainly end up in the Supreme Court.  The decision to crash the worlds economy would be up to the same people who legalized bribing politicians through Citizens United.  But the blame would be squarely on the Republican's shoulders and the country might finally figure out who these people really are.  Also, this issue would be settled until a new Court gets put in place.

  •  IMHO, Obama did right (19+ / 0-)

    by publicly claiming he didn't think he could use the 14th amendment.  He needed to box the Repubs in and make them responsible and not give them a route for relying on him in a controversial move to save their butts.

    Obviously they still may not behave responsibly.

    At the same time, based on some of his interesting language of late, I'm convinced he and his advisers have 1-2 options in case the GOP pushes the issue past the deadline.

    I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

    by Satya1 on Tue Oct 08, 2013 at 07:37:59 AM PDT

    •  Obviously (7+ / 0-)

      They are not feeling very boxed in.

      •  It's not over yet (8+ / 0-)

        Teahadists certainly don't feel boxed in.  But some of the rest?  Many Repubs are certainly no longer thinking Obama will just automatically cave.  The optics are not looking as good for them as they hoped.  Their side of the aisle is more chaotic than ever.  Meanwhile the Dems are proactive in the House with a discharge petition and Reid's bill on the debt ceiling.

        Which way are the polls trending?  It was still the right move to cast the responsibility for this entirely on Repubs.  Once Obama starts telling everyone "well I can fix this unilaterally" on an unprecedented, controversial venture, he owns the entire problem.

        I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

        by Satya1 on Tue Oct 08, 2013 at 08:48:01 AM PDT

        [ Parent ]

        •  Yes, preventative might be better economically but (0+ / 0-)

          not politically. People who stop a disaster from happening rarely get the credit they deserve, as opposed to people that stop a disaster in progress.

          And if it's not better politically, then it will be worse economically in the long run, until the crazies get voted out of power.

        •  Boehner's latest tantrum aside... (1+ / 0-)
          Recommended by:
          semiot

          ....the tide is turning.  The "both sides do it" meme is starting to fade, and it's not just among bloggers and liberal pundits.  Mainstream media doesn't get much more mainstream than CNN and they trumpeted this morning to the world that Boehner is holding the government hostage.

          I'll admit that I'm struggling not to freak out, but as odd as it sounds, I'm taking great comfort in Wall Street's declaration that there's "zero percent" chance of a default.  Oh, sure, they'll let the Teabaggers thump their chests and even shut down the federal government for a few weeks, but they've done too well under Obama to sit back and let the wingnuts drop a bomb on the economy.  It may not happen until the evening of the 16th, but at some point within the next few days, they'll tug on Boehner's leash and he'll cut the Teabaggers loose.  Wall Street knows it and Obama knows it.  This is a farce, and all the Democrats have to do to keep a level head and wait it out...

      •  I disagree. (2+ / 0-)
        Recommended by:
        Gurnt, dss

        What have the Republicans gotten out of this threat of disaster? Lower polling numbers is about it.

    •  Behave responsibly? By passing another CR that (0+ / 0-)

      kicks the can down the road for 30 days or so?

      We need something that settles budgetary matters for the next fiscal year.

      Through early morning fog I see visions of the things to be the pains that are withheld for me I realize and I can see...

      by Keith930 on Tue Oct 08, 2013 at 05:59:42 PM PDT

      [ Parent ]

  •  So it apprears (2+ / 0-)
    Recommended by:
    Armando, sethtriggs

    The POTUS is between a rock and a very hard place. Damned if he does: Impeachment; Damned if he doesn't: World Wide Financial Calamity... Am I missing something?

    No star is lost once we have seen, We always may be what we might have been. Adelaide Proctor -7.25/-5.64

    by mikejay611 on Tue Oct 08, 2013 at 07:38:03 AM PDT

  •  they will impeach obama and expect to profit from (8+ / 0-)

    the chaos...what else do they have?

    Sarah Palin is a disgusting racist pig.

    by memofromturner on Tue Oct 08, 2013 at 07:58:58 AM PDT

  •  I still think the platinum coin... (12+ / 0-)

    is the best option. It would be consistent both with the Constitution and existing law. It could be quickly accomplished with just the cooperation of the Fed which is certainly aware of the destructive consequences of a default. In due course, it would also reveal how our ingrained beliefs about fiat money, deficit and debt are flat-out wrong.

    The House might still vote to impeach but I say bring it on. They'd love Joe Biden although the Senate would never let them get that far.

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Tue Oct 08, 2013 at 08:10:25 AM PDT

  •  Brief summary? (1+ / 0-)
    Recommended by:
    Armando

    I have poor eyesight but would LOVE to know what this diary says.

  •  Has Obama made any mention... (7+ / 0-)

    of utilizing what Wilnetz refers to as the "2 step solution"?

    "In all, the Constitution provides for a two-step solution. First, the president can point out the simple fact that the House Republicans are threatening to act in violation of the Constitution, which would expose the true character of their assault on the government.

    Second, he could pledge that, if worse came to worst, he would, once a default occurred, use his emergency powers to end it and save the nation and the world from catastrophe."

    I would hope he is open to using such a method.

    Wilentz continues in his op-ed:

    "...Lincoln, who became accustomed to such abuse, had some choice words in 1860 for Southern fire-eaters who charged that he, and not they, would be to blame for secession if he refused to compromise over the extension of slavery: “A highwayman holds a pistol to my ear, and mutters through his teeth, ‘Stand and deliver, or I shall kill you, and then you will be a murderer!’ ”

    It is always possible that if the administration follows the two-step constitutional remedy, the House might lash out and try to impeach Mr. Obama. Recent history shows that an unreasonable party controlling the House can impeach presidents virtually as it pleases, even without claiming a constitutional fig leaf.

    But the president would have done his constitutional duty, saved the country and undoubtedly earned the gratitude of a relieved people. Then the people would find the opportunity to punish those who vandalized the Constitution and brought the country to the brink of ruin."

    Sound like a pretty reasonable prediction to me.

    "Patients are not consumers" - Paul Krugman

    by assyrian64 on Tue Oct 08, 2013 at 08:34:54 AM PDT

    •  The Republicans made it clear that national honor (4+ / 0-)

      required that there be no question that the debt be paid. Of course those were the Republicans of the 1860's. You know, the ones who wrote and passed the 14th amendment.

      These are my favorite parts of Wilentz's Op/Ed:

      As the wording of the amendment evolved during the Congressional debate, the principle of the debt’s inviolability became a general proposition, applicable not just to the Civil War debt but to all future accrued debts of the United States. The Republican Senate leader, Benjamin F. Wade of Ohio, declared that by placing the debt “under the guardianship of the Constitution,” investors would be spared from being “subject to the varying majorities which may arise in Congress.”

      Two years later, on the verge of the amendment’s ratification, its champions inside the Republican Party made their intentions absolutely clear, proclaiming in their 1868 party platform that “national honor requires the payment of the public indebtedness in the utmost good faith to all creditors at home and abroad,” and pronouncing any repudiation of the debt “a national crime.”

    •  If only this would actually happen (2+ / 0-)
      Recommended by:
      assyrian64, BRog
      Then the people would find the opportunity to punish those who vandalized the Constitution and brought the country to the brink of ruin."
      I don't trust my Faux News watching fellow citizens to be that cerebral.  
  •  Ignore the debt limit (5+ / 0-)
    Recommended by:
    Armando, MKS, BRog, assyrian64, Chitownliberal7

    Just ignore the House and issue debt anyway. That's what law professors say is the least unconstitutional option.

    http://www.columbialawreview.org/...

    This Article analyzes the choice the president nearly faced in summer 2011, and which he or a successor may yet face, as a “trilemma” offering three unconstitutional options: ignore the debt ceiling and unilaterally issue new bonds, thus usurping Congress’s borrowing power; unilaterally raise taxes, thus usurping Congress’s taxing power; or unilaterally cut spending, thus usurping Congress’s spending power. We argue that the president should choose the “least unconstitutional” course—here, ignoring the debt ceiling.
    Yeah it opens Obama to impeachment but all the choices do. That's what the teabags want of course.
  •  Economic Secession (3+ / 0-)
    Recommended by:
    Armando, assyrian64, chuckvw

    Just as Lincoln had to fight the  South over military and political secession, Obama needs to fight the Republicans over economic secession.

  •  There are no shortcuts in this game Armando. (10+ / 0-)

    The reason there is worry over economic catastrophe is because of how the bond market will react to the government not paying someone. Even if the government made all of its interest payments and didn't pay other government obligations, the bond market would react very negatively.

    Furthermore, stepping into a Constitutional crisis with bonds of questionable legality isn't the way to prevent economic catastrophe. In fact it will compound it.

    There is only way way out of this: Congress has to legally live up to its responsibilities. If it doesn't, then default is exactly what is legally required.

    Now, what should happen after that is an entirely different matter. Because if it were up to me, I'd call the whole thing an act of rebellion, suspend habeas corpus in the Capital, and begin taking Republican Congressmen into custody.

    •  Obama needs to fight this Secession (0+ / 0-)

      Cannot wilt this time.

    •  Re (0+ / 0-)
      There is only way way out of this: Congress has to legally live up to its responsibilities. If it doesn't, then default is exactly what is legally required.
      First of all, your claim that bond holders would be worried if the US government stiffed non-bond holders is suspect to say the least. The Republicans argue equally plausibly that such an event would help the US bond market by making it look like we're decisively curbing our debt. Internal US dislocations and economic misery are not of concern to them. As long as US private export businesses keep humming, that's all of interest to foreign investors. We certainly care: they don't.

      Secondly, if default is legally required, I would argue that it is legally required. That's how it works, and that's how it's supposed to work. Either the House and Senate make a deal, or they don't. The President doesn't have the legitimate power to do anything about it, weaselly diaries not withstanding.

      Because if it were up to me, I'd call the whole thing an act of rebellion, suspend habeas corpus in the Capital, and begin taking Republican Congressmen into custody
      It's a good thing it isn't up to you then. Throwing political opponents in jail because they use their duly-elected powers to do things you don't like is what banana republics do. Even more than default.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Tue Oct 08, 2013 at 09:35:37 AM PDT

      [ Parent ]

      •  Perhaps you have not read Section 4 of the... (0+ / 0-)

        ...Fourteenth Amendment?

        Section 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.
        You can argue as much as you want that "...if default is legally required, I would argue that it is legally required." Seems to me that I recall somewhere that the US Constitution overrules Congressional statutes?

        The only question is, it seems to me, does deliberately reneging on the public debt in order to maliciously damage the United States rise sufficiently above the level of "questioning" to warrant charges of sedition?  

        NEW PALINDROMIC METAPHOR MEANING TO MAKE A PREDICTION THAT IS ASTOUNDINGLY OFF TARGET: "Pull a Gallup!" As in: "The weatherman said yesterday would be sunny and mild, but we got a foot of snow! Boy, did he pull a Gallup!"

        by Obama Amabo on Tue Oct 08, 2013 at 10:13:25 AM PDT

        [ Parent ]

        •  Elected officials... (0+ / 0-)

          ...working in their elected capacities cannot be guilty of sedition, by definition. Besides, it's difficult to accuse someone of sedition because they didn't do something.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Tue Oct 08, 2013 at 10:58:27 AM PDT

          [ Parent ]

          •  As I recall, Jefferson Davis (2+ / 0-)
            Recommended by:
            vcmvo2, Obama Amabo

            was an elected Senator from the State of Mississippi and Alec Stephens was an elected Senator from Georgia. In fact, I can't think of any leading Confederate civilian leaders who had not previously been elected officials. Surely secession and civil war do count as seditious activities, do they not? And take a hypothetical rather than an actual historical example. Suppose that the isolationists in Congress--many of whom we now know took money from Nazi Germany--had actually worked openly to prevent the United States from attacking Nazi Germany after our declaration of war in December 1941? Would those Congressmen and Senators not have been guilty of sedition, at the very least? Wilson happily sent Eugene V. Debs to jail for sedition in 1917, and had Debs been a member of Congress I am not sure it would have made a difference.

            "Something has gone very wrong with America, not just its economy, but its ability to function as a democratic nation. And it’s hard to see when or how that wrongness will get fixed." Paul Krugman and Robin Wells

            by Reston history guy on Tue Oct 08, 2013 at 05:57:42 PM PDT

            [ Parent ]

          •  Well then once the default leads to a full (0+ / 0-)

            collapse perhaps the citizens of DC going to the capitol and literally putting their heads on a pike would be a better option?  Of course, I doubt we would live long enough to see it as both of us will probably have already been killed for food (and not just that which we have in our homes) by then.  Think Mad Max.

            You have watched Faux News, now lose 2d10 SAN.

            by Throw The Bums Out on Tue Oct 08, 2013 at 06:31:39 PM PDT

            [ Parent ]

  •  Isn't it possible (7+ / 0-)

    that the administration has simply made that calculation that any public statements about workable alternatives to Congressional action would just provide cover for Republicans to do nothing and force his hand? I think if I were in his shoes I'd be making plans quietly behind the scenes while publicly stating that there were no options other than for Congress to do its job.

    If the Republicans know the President will simply act on executive authority, I could almost guarantee they'd make the strategic decision to hit the debt ceiling just to set up the court fights.

  •  Um... (1+ / 0-)
    Recommended by:
    walk2live

    It's going to be a Constitutional crisis either way.  If Obama ignores congress and prints money some other way (either by directly issuing bonds or by coin tricks), then any debt he issues will automatically be suspect.  If Obama is successfully impeached (doubtful), then that debt becomes 'illegal'.  If the courts get involved, they could either uphold the debt or say it is illegal (50/50).  If the say the debt is illegal, then Obama could ignore the courts and now the debt is even more suspect.  This is why Obama is stating he won't resort to tricks.  He doesn't want to compound the situation by issuing debt that is now suspect.

    “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” - John Steinbeck

    by RichM on Tue Oct 08, 2013 at 08:51:18 AM PDT

  •  Or Obama could just order up a platinum coin. (1+ / 0-)
    Recommended by:
    Reston history guy

    The problem with that, for some people, is that it would raise the question of why the U.S. Government has to borrow money at all.

    A former director of the U.S. Mint and co-author of the bill that allows the treasury to do that has explained why it would be perfectly legal to mint a trillion-dollar coin and deposit it with the Fed.

    The fact is, Obama wants to use this phony crisis as an excuse to ram through cuts to earned benefit programs like Social Security. He may also be unwilling to piss off Wall Street, which makes a lot of money on treasury auctions.

    •  Oh gawd... (7+ / 0-)

      Not this again. "Phony crisis" and "excuse to cut earned benefits programs."

      As corporate-beholden as you feel Democrats are, this would have happened already. Don't even tell me that Teabaggers wouldn't welcome his cutting the social safety net and getting the blame for it. We know they would. There were even easier circumstances to get such a thing to happen the last time this happened. We were coming off a bad election and Dems had just lost the House.

      He could have even done this in the last debt ceiling fiasco as a bargaining chip. Remember that? It's a common assertion around here that Obama is a "poor negotiator" and "weak" and he "always wants to play nice to the Republicans" because he "idolizes Reagan." Remember that?

      So why hasn't he done this?

      •  I Just Laugh When I See this Bullshit Posted Here: (10+ / 0-)
        The fact is, Obama wants to use this phony crisis as an excuse to ram through cuts to earned benefit programs like Social Security.
        It's funny how a select group of people here have been willing to repeat this lie for the last week.

        I'm a "right-wing freak show," or at least that's what one nobody on DKOS seems to think.

        by kefauver on Tue Oct 08, 2013 at 10:19:08 AM PDT

        [ Parent ]

        •  Obama has already proposed cutting Social Security (0+ / 0-)

          It's called chained CPI. Look it up.

          •  Yes, I Know About Chained CPI. (4+ / 0-)

            Please re-read the whole quote.

            It's an outright lie to claim that Obama is using this "phony crisis" to push for social security cuts.

            And for the record, it is not a "phony crisis" for those who rely on WIC, Meals On Wheels, and Head Start programs, among others.

            I'm a "right-wing freak show," or at least that's what one nobody on DKOS seems to think.

            by kefauver on Tue Oct 08, 2013 at 11:27:52 AM PDT

            [ Parent ]

            •  Please reread my comment. (1+ / 0-)
              Recommended by:
              chuckvw

              I am referring to the possibility of default. You know, the subject of this diary.

              And for the record, it is not a "phony crisis" for those who rely on WIC, Meals On Wheels, and Head Start programs, among others.
              That has nothing to do with default, which has not happened yet and need not happen, since Obama can always direct the treasury to mint a trillion-dollar platinum coin.

              Please pay attention.

              •  You Wrote "this Phony Crisis" . . . (4+ / 0-)

                As if it is happening now.

                Nothing to do with me failing to pay attention.

                I'm a "right-wing freak show," or at least that's what one nobody on DKOS seems to think.

                by kefauver on Tue Oct 08, 2013 at 12:27:01 PM PDT

                [ Parent ]

                •  Wrong again. (1+ / 0-)
                  Recommended by:
                  chuckvw
                  Here's my comment:

                   Or Obama could just order up a platinum coin. (0+ / 0-)
                  The problem with that, for some people, is that it would raise the question of why the U.S. Government has to borrow money at all.

                  A former director of the U.S. Mint and co-author of the bill that allows the treasury to do that has explained why it would be perfectly legal to mint a trillion-dollar coin and deposit it with the Fed.

                  The fact is, Obama wants to use this phony crisis as an excuse to ram through cuts to earned benefit programs like Social Security. He may also be unwilling to piss off Wall Street, which makes a lot of money on treasury auctions.

                  by expatjourno on Tue Oct 08, 2013 at 05:51:40 PM CEST

                  [ Reply to This ]

                  The platinum coin has nothing to do with the shutdown. It is a means of avoiding default. You know, the subject of this diary. "This phony crisis" refers to default. You know, the subject of the diary.

                  Please pay attention.

                •  heh (5+ / 0-)

                  when some dude sporting a hat made outta Reynolds Wrap demands that others 'pay attention' i always giggle a little.

                  anyone born after the McDLT has no business stomping around acting punk rock

                  by chopper on Tue Oct 08, 2013 at 01:05:19 PM PDT

                  [ Parent ]

      •  He's already proposed cuts to Social Security. (0+ / 0-)
        So why hasn't he done this?
        He did. Republicans didn't take him up on it.
        •  And why didn't the Democrats? (2+ / 0-)
          Recommended by:
          kefauver, howarddream

          I, too, remember the suggestion (the mantra of Chained CPI). I'm trying to recall where Obama advocated some kind of bill. I am sure there was some utterance from Simpson of Simpson Bowles. You know, the 'Catfood Commission' that went nowhere.

          Remember they are supposed to be corporate-backed. We know that in this time of party-unity among the Democrats, they would have gone along with a proposal that President Obama put forward. (This is why we got all 60 for Obamacare)

          Remember the things Democrats managed to pass before gridlock.

          We know that many Republicans have gone on record as wanting to cut entitlements.

          If cutting Social Security earned benefits were really part of a bill, why would Republicans not vote for it? Why wouldn't they go along?

          Note these things:
          1. Everyone would remember that Obama did this.
          2. Social Security is asserted to be the third rail of politics. The Republicans don't want to get the blame for it even though they've always wanted to cut 'entitlements.'
          3. If you can get your sworn enemy to take forth your unpopular policy wish without you taking the heat, it's a win-win.

          There is EVERY incentive for Republicans to vote for such a proposal by Barack Obama, if he put forth such a bill. Every incentive. You mean to tell me that Republicans actually care about people utilizing government assistance? Real people, I mean...not corporations that get corporate welfare.

          Goodness gracious, their standard bearer in the last election demonized 47% of the populace as moochers dependent on government!

          But why didn't they take him up on it?

          Could it be that that 'chained CPI' thing was a poison pill?

          What if Obama, like others, is working the refs and appearing to be all reasonable?

          Consider that he likely knew the Republicans would never accept such a proposal because Obama almost always includes some form of revenue in his proposals.

          Think about the end result of zip, zero, zilch from Simpson-Bowles. Are either of those people even in the news lately? Has anyone even talked about that in this fight lately except here on this site. Daily Kos, more than anyone else, seems to be keeping the 'grand bargain' meme alive.

          And this is why I like the other Daily Kos 'grand bargain' grievance better. Obama even mentioning the possibility of reducing Social Security benefits grants some manner of legitimacy to the idea by "Serious People." And I agree with that, I can abide by that grievance. That was crappy of President Obama to do. I do feel he did it in some sort of scheme, "I have an offer you'll surely refuse," but he didn't have to do that.

          But default being a phony crisis due to wanting to get a grand-bargain? Come on.

          He wouldn't be silent otherwise. He could give Boehner everything and save the Tan Man's leathery hide with a 'grand bargain' and give the Republicans what they want.

          It's an article of faith here that President Obama is a closet Republican.

          So why is he leaving Boehner twisting in the wind?

          And where the hell are Simpson and Bowles anyway?

    •  Yeah.... (3+ / 0-)
      Recommended by:
      howarddream, Gurnt, sethtriggs

      ....just like he was using the "phony crisis" over Syria to take military action there.

      You're as predictable as a teahadist, but not any saner.

      "They smash your face in, and say you were always ugly." (Solzhenitsyn)

      by sagesource on Tue Oct 08, 2013 at 10:14:42 AM PDT

      [ Parent ]

    •  lol (5+ / 0-)
      Obama wants to...ram through cuts to earned benefit programs like Social Security
      according to you guys this shit has been coming 'any second now' for the past almost 5 years. give it a rest.

      anyone born after the McDLT has no business stomping around acting punk rock

      by chopper on Tue Oct 08, 2013 at 12:29:07 PM PDT

      [ Parent ]

  •  Let the Treasury choose which parts to fund (6+ / 0-)
    Recommended by:
    MKS, wdrath, cskendrick, msdrown, jds1978, GeoffT

    and I think they should refuse to fund anything in any district represented by a Republican.

    Only fund government in the districts represented by Democrats, since we know that the republicans don't like government. Take funding away from the loony tunes who vote for Republicans and see how many continue to vote for Republicans.

    I reject your reality and substitute my own - Adam Savage

    by woolibaar on Tue Oct 08, 2013 at 08:54:39 AM PDT

    •  We need to be prepared for the countermove (3+ / 0-)
      Recommended by:
      jds1978, chuckvw, Chitownliberal7

      And it's a familiar one: nonpayment of Federal taxes and confiscation of Federal assets in said areas.

      Fort Sumter, for example...

      •  Yeah, I agree. (0+ / 0-)

        The republicans really don't like the US Government and want to turn a democracy into a dictatorship/plutocracy where they are the only ones (by they I mean rich, white males) who get to make decisions about things.

        If the republicans aren't held to account for what they have done to the US, this really is becoming a lose-lose for everyone but the rich, white males.

        I reject your reality and substitute my own - Adam Savage

        by woolibaar on Tue Oct 08, 2013 at 09:52:29 AM PDT

        [ Parent ]

  •  Quote (4+ / 0-)
    But the President's men have taken the unusual (and imo, wrong) position that his hands are tied.
    From experience we know that the president usually has a plan B up his sleeve and he also plays a mean game of poker. Are we sure the president isn't refusing to let the Republicans see his cards?
  •  Yoho Ho and a Bottle of Dumb! (3+ / 0-)
    Recommended by:
    JML9999, vcmvo2, walk2live

    The GOP in a nutsack.

    "Reagan's dead, and he was a lousy president" -- Keith Olbermann 4/22/09

    by kovie on Tue Oct 08, 2013 at 09:15:26 AM PDT

  •  Something to remark on.. interest rates rather low (0+ / 0-)

    We're not exactly in an inflationary environment at the moment.

    And printing money is (in)famous as a means to provide credit relief on fixed-notional debt.

    I mean, hey, I could see trading in inflated dollar-denominated stock a few years down the pike to clear out my home loan...

  •  no legal basis for prioritization? (0+ / 0-)

    That statement has had me puzzled.  I mean, the Treasury pays bills and there is de facto prioritization in the sense that they don't all get paid instantly. That system handles money coming in, bills due, where they're coming from, etc. Not every bill gets paid simultaneously.

    While I won't deny that actually prioritizing bondholders over every other bill is a step beyond what has happened before, it's really just another nuts and bolts item like creating computer systems with rules about how things happen.  (Side note - word is that as a practical matter, Treasury's systems can't prioritize this way. if so, that is a different problem)

    Assuming someone was determined to have standing, it's very difficult for me to see any court saying there's no legal basis for Treasury to do this. I could see a court recognizing the constitutional conflict - if someone doesn't get paid and congress has appropriated the money, then he's not faithfully executing the laws.  But a constitutional challenge exists no matter what he does.

    It's sort of splitting legal hairs, but prioritizing payments so that money doesn't run out until after bondholders are paid is not the thing without legal basis. It's failure to  pay things that have been appropriated that is the problem.

    Want a progressive global warming novel, not a right wing rant? Go to www.edwardgtalbot.com and check out New World Orders

    by eparrot on Tue Oct 08, 2013 at 09:27:53 AM PDT

  •  Long story short (4+ / 0-)

    We're already in a constitutional crisis, might as well make the best of it. The Presidency as an office could become either a mere figurehead in one possible outcome, far more powerful in another.

    So why not lean in and face the likelihood of impeachment? The tea party has made the country ungovernable, we look increasingly like a failed state, there are no good options this side of an unconditional teabagger surrender.

    I'd rather have the country go through impeachment and defang the tea party in the process, wreck it beyond hope of repair, and emerge with our democratic institutions intact, than what we have right now, government by extortion.

    Fuck me, it's a leprechaun.

    by MBNYC on Tue Oct 08, 2013 at 09:28:52 AM PDT

  •  What's up with Wisconsin and their GOP (0+ / 0-)

    is it the Cold or the Cheese that makes them so vile......

    I want 1 less Tiny Coffin, Why Don't You? Support The President's Gun Violence Plan.

    by JML9999 on Tue Oct 08, 2013 at 09:38:39 AM PDT

  •  Astute but (0+ / 0-)
    The second question is is the debt ceiling, on its face, unconstitutional? I would argue no because the existence of a debt ceiling does not, in and of itself, put into question the validity of US debt.
    What is a default but invalidating the debt?

    Romney's whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. -- David Stockman.

    by CupofTea on Tue Oct 08, 2013 at 09:47:51 AM PDT

    •  Also, (0+ / 0-)

      I get that you want to parse out the Constitution and your conclusions may very well be correct, but practically speaking a peice meal funding by either dems or repubs goes against consent of the governed by constitutional ratifications and fair and frequent elections.

      Great read btw.  

      Romney's whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. -- David Stockman.

      by CupofTea on Tue Oct 08, 2013 at 09:54:11 AM PDT

      [ Parent ]

  •  Would he be protecting the constitution (1+ / 0-)
    Recommended by:
    GeoffT

    though, if he chose to act this way?  Lincoln didn't protect the constitution; he actually enshrined the idea that in a time of ware the president could act outside of the constitution if he saw fit, which really expanded into if the president feels that we're under threat.  He may have done it to protect the country, but he did alter the Constitution without going through the defined process.

    If Obama chooses to go this route, he will be setting up another precedent:  When the President disagrees with Congress, and it comes to a standoff, he or she can act alone.

    What if the next president, who doesn't like most of the departments, just waits until a shutdown occurs to close the Departments of energy, labor, and education?  Then what?  And what if his party refuses to impeach or convict him?

    "Harass us, because we really do pay attention. Look at who's on the ballot, and vote for the candidate you agree with the most. The next time, you get better choices." - Barney Frank

    by anonevent on Tue Oct 08, 2013 at 09:54:17 AM PDT

  •  It's gonna be the $1T coin (2+ / 0-)
    Recommended by:
    sagesource, Reston history guy

    As crazy as it sounds, they're going to let it come to that.  And it's the President's only foolproof backstop against these fools.

    ------
    Ideology is when you have the answers before you know the questions.
    It is what grows into empty spaces where intelligence has died.

    by Alden on Tue Oct 08, 2013 at 10:04:02 AM PDT

  •  Debt Ceiling law places POTUS in "trilemma..." (0+ / 0-)

    "with no way out".  

    ...Under the Constitution, he can't default, he can't unilaterally raise taxes, and he can't unilaterally borrow...
    ...according to Neil Buchanan of George Washington University Law School and Michael C. Dorf of Cornell Law School, and they continue:  
    ...In such a predicament, those scholars believe he is obliged to take the "least unconstitutional" approach, which, for reasons they outline, they think would be invalidating the debt-ceiling and issuing new debt -- which they call "Presidential debt," because it would have no Congressional authorization...
    Yet, Harvard Law School's Laurence Tribe and Jack Balkin of Yale Law School disagree with Buchnan and & Dorf:  
    ...They think the President would be relegated instead to some sort of "prioritization" process, where he directs those limited funds available to him to making certain that the country honors its outstanding bond obligations -- the most unambiguous focus, they contend, of Section 4 of the 14th Amendment -- and to funding other absolutely essential functions while allowing most other obligations (salaries, entitlements, contracts, etc.) temporarily to go by the wayside, though this would obviously cause enormous pain and upheaval throughout the country....
    This unbelievable crisis engineered by GOPers is not only an economic crisis for all of us, it is a Constitutional crisis.
  •  Obama just took the coin and 14th off the table (1+ / 0-)
    Recommended by:
    chuckvw

    If you're listening to his press conference, he just took them off the table.  We're up the creek now.

  •  This may be legally right but it doesn't matter. (1+ / 0-)
    Recommended by:
    Steve Simitzis

    There is no escape from this. Investors won't buy t bills that one part of the govt backs and another doesn't. So practically, invoking the 14th or minting trillion dollar coins doesn't make a difference. If they don't raise the debt ceiling there is nothing Obama can really do. Josh Marshall gives a better longer explanation here.

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

    by Deathtongue on Tue Oct 08, 2013 at 01:53:27 PM PDT

    •  the coin doesn't involve (2+ / 0-)
      Recommended by:
      semiot, 2laneIA

      persuading markets to buy anything. All that is required is having Treasury send it over to the Federal Reserve with instructions on crediting it to the account of the U.S. government. At that point, the government has a trillion dollars to spend before running into the same situation. When that happens, repeat the above.
           Is this legal? Absolutely. Is it slipping through a legal loophole? Absolutely. Does it raise the long-term possibility of shifting all power over the budget away from Congress and to the Presidency? Absolutely. That is why, when the House goes postal berserk in the aftermath, you offer them a different Grand Bargain: in exchange for repealing the debt ceiling law and passing a budget at way above pre-sequestration level, you agree to cooperate in amending the platinum coin law in such a way that you eliminate this loophole so future Presidents cannot use it. If the House doesn't cooperate, you keep sending the coins over to the Fed and use the proceeds to provide the Keynesian stimulus the economy badly needs along with desperately needed infrastructure.

      "Something has gone very wrong with America, not just its economy, but its ability to function as a democratic nation. And it’s hard to see when or how that wrongness will get fixed." Paul Krugman and Robin Wells

      by Reston history guy on Tue Oct 08, 2013 at 06:08:10 PM PDT

      [ Parent ]

      •  If the coin is issued, you can bet there will be (0+ / 0-)

        lawsuits. Therefore any t bills issued during that time will have to be sold at incredible interest rates. Do you see where this is going? Throw in an impeachment and we've got a lot of doubt about those t bills.

        The bottom line is that congress and the president can't decide unilaterally whether investors will trust them or not. That trust comes from a functioning government, and trillion dollar coins are something that a banana republic would do. There isn't a way out of this.

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

        by Deathtongue on Tue Oct 08, 2013 at 11:52:44 PM PDT

        [ Parent ]

        •  again, why sell t bills? (1+ / 0-)
          Recommended by:
          2laneIA

             Just spend the money on account with the Federal Reserve. Yes, this is "printing money". No question. But it is running through a loophole in the law, and as sleazy as it might be, it is legal. Who, by the way, would have standing to sue except maybe the Federal Reserve?

          "Something has gone very wrong with America, not just its economy, but its ability to function as a democratic nation. And it’s hard to see when or how that wrongness will get fixed." Paul Krugman and Robin Wells

          by Reston history guy on Wed Oct 09, 2013 at 09:32:04 AM PDT

          [ Parent ]

          •  Ahem (0+ / 0-)
            as sleazy as it might be
            how do you think the market's will react to "sleazy" tactics like this? This isn't about something tangible, it's about trust. If your goal is to "win" some fight with Republicans, then go for it I guess. But if you want to avoid global financial armageddon then you'll have to find a solution that involves raising the debt limit.

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

            by Deathtongue on Wed Oct 09, 2013 at 10:33:42 PM PDT

            [ Parent ]

  •  Can't the President bring a dec action (0+ / 0-)

    against the Fed for refusing to accept the Platinum coin? Or would that look too much like the President suing himself?

    Ok, so I read the polls.

    by andgarden on Tue Oct 08, 2013 at 04:21:45 PM PDT

  •  Legalistic arguments are besides the point (0+ / 0-)

    Bond buyers won't buy bonds that might be cancelled by a legal challenge. That's what Obama is focusing on in his arguments. Whether or not he has the Constitutional authority isn't relevant. That point is debatable and the debate itself will cause panic on the markets.

    So, yes, parse the Constitution all you want. The other side will be doing the same. And if it turns into a legal dispute, treasuries will no longer be considered a safe investment while the dispute plays out. Even our side wins the dispute in front of the Supreme Court, financial markets will be in panic for months while it plays out.

    That's the nightmare scenario.

    •  Can't Sell Food And Other Commodities (1+ / 0-)
      Recommended by:
      Throw The Bums Out

      When the production numbers and projections don't exist and the value of currency is unknown, food will be left to rot in the fields.

      Men are so necessarily mad, that not to be mad would amount to another form of madness. -Pascal

      by bernardpliers on Tue Oct 08, 2013 at 05:41:59 PM PDT

      [ Parent ]

    •  At which point, someone asks (0+ / 0-)

      "Who says that the the government has to be financed by debt?"

      Were it not for restrictions in current law, the Treasury could issue payment for all expenses that Congress authorized.

      50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

      by TarheelDem on Tue Oct 08, 2013 at 05:55:24 PM PDT

      [ Parent ]

  •  Surely you agree that the President will take (1+ / 0-)
    Recommended by:
    2laneIA

    action ala Sean Wilentz upon hitting the deadline.

    He certainly can't telegraph that now and expect anything concrete to come from congress beforehand.

  •  "We'll Meet Again Some Sunny Day" (0+ / 0-)

    Men are so necessarily mad, that not to be mad would amount to another form of madness. -Pascal

    by bernardpliers on Tue Oct 08, 2013 at 05:40:44 PM PDT

  •  at what point (0+ / 0-)

    does defense spending and corporate subsidy become affected? that's when the real tantrums will begin...

  •  On the talking points side... (1+ / 0-)
    Recommended by:
    2laneIA

    I'd bring up a little history, as in...

    Funny, the people telling us not to worry about default are the same people who told us we'd all be rich if we just turned Wall Street loose. They told us if the government cut taxes, it would have more money than ever. They told us if we just gave the rich more money, they'd create jobs for us. They told us the war in Iraq would pay for itself.

    Now maybe you think that just maybe, just this one time they might actually be right about default being no big deal. And just maybe, they might have a nice bridge in Brooklyn to sell you too.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Tue Oct 08, 2013 at 05:49:33 PM PDT

  •  Thanks, Armando (0+ / 0-)

    ...for a clear explanation of your position.

    It seems there has been a lot of discussion among lawyers, economists, financial experts, and political types as to what the President can do and what he should do.  And what makes sense to one profession doesn't often make sense to one of the others.

    And often the last in line are the politicos with...well, all very good but they will impeach him over it.

    The very mania in the GOP House makes me think that we are not witnessing a default but a Congressional coup.  In that case, would the mere statement of the unconstitutionality of the House's action be sufficient or have we at that point in practice actually had the Constitution suspended unilaterally by the House?

    50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

    by TarheelDem on Tue Oct 08, 2013 at 05:52:15 PM PDT

  •  Ron Johnson (2+ / 0-)
    Recommended by:
    vcmvo2, BRog

    The guy God created to make Dan Quayle look like a freaking genius.

  •  I Think The President Ought To Use The 14th (0+ / 0-)

    amendment.  It would set a precedent and that would mean that the country would no longer be hostage to paying our bills.  Every president that comes after President Obama could just unilaterally raise the debt ceiling when they needed to.  

    "Don't Let Them Catch You With Your Eyes Closed"

    by rssrai on Tue Oct 08, 2013 at 06:10:31 PM PDT

  •  How dare Obama point out we were just at war... (0+ / 0-)

    With Eurasia! We have always been at war with Oceania!

    Sometimes, I wonder why I consider myself a Democrat. Before too long though, dumb Republicans saying dumb things come along to remind me.

    by LnGrrrR on Tue Oct 08, 2013 at 06:11:44 PM PDT

  •  Rep. Johnson's comments on the Titanic (2+ / 0-)
    Recommended by:
    BRog, walk2live

    "It's really irresponsible of the Captain to say to the passengers the boat is going to sink. Saying the boat is even taking water is the wrong thing, he ought to be soothing and calming the passengers. So there's no need to radio for help or lower the lifeboats if we just don't cause panic by saying an iceberg has hit us. The iceberg probably isn't there, and if it is, it is all the Captain's fault."

    Some people are intolerant, and I CAN'T STAND people like that. -- Tom Lehrer

    by TheCrank on Tue Oct 08, 2013 at 06:20:36 PM PDT

  •  Legislative triage (0+ / 0-)

    My two cents -- the Prez has always sucked at practical "legislative triage." I work in the executive branch of government at the state level, and it's a craft that really impresses me. We're faced with a set of laws, of varying degrees of difficulty as far as implementation, and we have a finite amount of money and resources. And very often they're muddled, poorly worded, and inconsistent. So then we have to categorize them:

    1. The ones that are easy to implement
    2. The ones that are worth breaking a sweat in trying to implement.
    3. The ones that are impossible to implement

    Even a low level civil servant like me has no trouble seeing that the debt ceiling is simply not worth trying to implement.

  •  How was debt structured 150 years ago? (0+ / 0-)

    I'm neither an originalist nor a textualist when it comes to the Constitution, so I feel a little out of place even asking this, but I wonder: what were the common practices for managing debt 150 years ago, when the 14th Amendment was passed? Were bonds typically paid in full (including accrued interest) on a specified due date? What were the consequences for missing that due date?

    I'm asking because the wording in the 14th Amendment -- especially shall not be questioned -- seems more than a little vague. Could it be interpreted to mean something like yes, of course we'll make good on our debts, but we're not obliged to say when?

    Let us all have the strength to see the humanity in our enemies, and the courage to let them see the humanity in ourselves.

    by Nowhere Man on Tue Oct 08, 2013 at 06:25:51 PM PDT

  •  There's just no stopping this, is there? (0+ / 0-)

    Seriously, the idiots driving this folly are too blinkered or too stupid to realize they're being played.  And the ones playing them will make mega-millions atop their already mega-billions, by playing the numbers game as they normally do every day.

    I don't know how close the country was to actual revolution back in the early 1930s, but I suspect this time around we'll see something truly terrible.

  •  Or he could just use timing... (1+ / 0-)
    Recommended by:
    semiot

    Congressional appropriations are year long budgets.

    Anyone who has worked in the government knows that there is a lot of leeway on when purchases of supplies happen.  If the President tells every office to skimp on supplies, it would buy a little time, but these are tiny budgets, you are looking at a day (even if this had started immediately).  

    On the flip side, payroll, for instance, you can't skimp on.  Perhaps Obama could tell the military to do another furlough, and save 1/5th of military civilian pay costs.

    But the juicy plum is procurement.  Military parts, spares, purchase of new weapon systems.  If Obama told the military to stop buying spare parts, it would immediately give days (plural) of extra time to figure out the debt ceiling.  Even better, every contract the Federal government enters includes a clause saying the government can cancel it "For the convenience of the government."  There are $140 billion in military acquisition contracts, canceling those to save money would give the President a lot of time to fix the problem.

    The President has the power to delay funding of (for instance) military contracts until after the debt ceiling is lifted

    by computant on Tue Oct 08, 2013 at 06:53:30 PM PDT

  •  Food for thought (0+ / 0-)

    There are many many democracies in the world right now. They consist of only two types. Presidential democracies, like ours, and parliamentary democracies, like Britans. Of all of those presidential all of them except two have devolved into dictatorships. Costa Rica is the other one, and it's teetering.
    What happens is, because the executive branch is excluded from the legislative branch as a third part, the legislative branch can bog down. And, as we see in our own government, this can be a big problem. So, the president has to begin acting without them. This doesn't mean that he's trying to seize power, necessarily, it's just that the legislature isn't doing what needs to be done, so he does it unilaterally.

    It's happening in Costa Rica right now, the legislature is paralyzed, the the guy in charge is doing the right things, but he's doing them alone..and the country is holding it's collective breath wondering if they're next on the "el presidente" line of the list.

    All these people saying the president should "just do what he has too" seem unaware of the precarious situation this represents. Our presidents powers are only limited once he's used them, not before hand. And the legislature has already seceded enormous power to the executive office. I mean, when was the last time we had a declared war? WW2... Oh, we've had wars, just not ones declared by congress... They just decided to go along with the executive branches decision and not rescind it. That isn't the same thing as congress declaring war. Make no mistake, this form of democracy is flawed by virtue of the separation of powers. Else, why are there only two forms of it that aren't dictatorships in all but name? The 17th century idea that if you separate them, and put them in opposition to each other, it'll work...doesn't over time.

    A seperate executive branch is a dangerous thing, as has been proven time and again. Saying "if he'd only just DO what needs to be done and say fuck the bastards!" is, consciously or not, another jump on the hopscotch board towards a dictatorship.

    And now I can be HR'd to oblivion.

    Nicht durch Zorn, sondern durch Lachen tödtet man. ~Nietzsche

    by somewierdguy on Tue Oct 08, 2013 at 07:26:36 PM PDT

    •  The real problem is... (0+ / 0-)

      That our system is simply out-dated. The US constitution was written in 1787... there have been a lot of new ideas about how to organize a democracy since then, which address these problems.

      Could you imagine if computer operating systems just stopped with major updates ~1995? That would be crazy. Yet, we're 200+ years without an upgrade to our political operating system.

      The problem is that we've elevated the US constitution onto some kind of pedestal, where it is unassailable. To even suggest the document has a lot of bugs is heresy... Weren't our Founding Fathers infallible?

      Freedom isn't free. That's why we pay taxes.

      by walk2live on Tue Oct 08, 2013 at 08:59:23 PM PDT

      [ Parent ]

  •  Don't weaken a sound argument (1+ / 0-)
    Recommended by:
    jlynne

    You hit the nail on the head explaining why the administration will not be able to do anything but go on borrowing no matter what the debt ceiling says, when you point out that the Executive Branch lacks the authority to fail to pay every dime obligated by law.  

    Stop there.  

    Do not add extraneous stuff drawn from tendentious readings of the 14th Amendment, or really bizarre explosions of some legislation that authorizes platinum commemorative coinage.  When you point out that no law could possibly require Treasury to prioritize payments among all the legal obligations on it, because such a law would be an unconstitutionally broad delegation of power, you have made an entirely sufficient argument.  Don't screw up the successful selling of that sound argument to an understandably nervous electorate by piling on extra stuff that sounds like sophistry because it is sophistry.

    The sophistry of the platinum coin thing is self-evident.  The Law is not a game of gotcha.  Arguably inartful wording of a provision in that statute about coin seigniorage does not create a presidential power to bring in a trillion dollars in revenue without Congress's say.  Size matters, and a supposed loophole that, if it were valid, would allow presidents to create infinite revenue without ever going to Congress, cannot be an actual valid loophole.

    The 14th Amendment could only apply, and then only arguably, if the problem was that the full legislative authority, all three legs of the trifecta, had passed a law repudiating some US debt.  That's not what's happening here.  One leg of the trifecta is simply, by its refusal to increase the debt limit, about to create a situation in which there, arguably, won't be any funds available to pay all US debt.  The House neither seeks to, nor could by itself even if it wanted to, repudiate any of the legal obligations of the US.  That's exactly the legal dilemma failure to raise the ceiling would supposedly create, that the obligations would all still be there, in undiminished legal force, but there wouldn't be the money to pay all of them because the debt ceiling would supposedly block further borrowing.  The ceiling (supposedly) blocks borrowing, not spending, not paying all the just debts the US owes.  The 14th simply doesn't apply to this situation because it only addresses paying off debt, not its creation.

    The electorate mostly doesn't pay any attention to these sorts of issues.  We all have our own already sufficiently complicated lives to live, without a lot of attention to spare towards things that, however important, are working just fine without our attention.  The mechanics of how the US raises revenue and then spends it is one of those titanically important things that nobody has had to pay attention to up until now, when it threatens to come crashing to the ground, threatening all of us in its ruin.  The public needs to be brought up to speed, quickly, on these matters.  What our side has to tell them has to be true, and it has to avoid unnecessary complication, especially sophistry that just ain't so, and will very quickly be proven to not be so by fast-paced events.  Let the other side do the shuck and jive, because that's all they've got.

    The states must be abolished.

    by gtomkins on Tue Oct 08, 2013 at 08:13:55 PM PDT

    •  yeah, (1+ / 0-)
      Recommended by:
      gtomkins

      the discussion of the 14th generally lacks recognition of the fact that default is not the same as repudiating debt.  The US will still owe the money, we just won't be able to pay it.  Since the debt is secured only by the full faith and credit of the US government . . . .

      This is Grover's wet dream.  The Government drowns and the Robber Barons take over.

      If we want a government of the people, by the people and for the people, we better start buying Obama bonds with all of our left over pennies.

      "None are more hopelessly enslaved than those who falsely believe they are free." - Goethe

      by jlynne on Tue Oct 08, 2013 at 11:15:04 PM PDT

      [ Parent ]

  •  A 'real' debt ceiling IS unconstitutional because (1+ / 0-)
    Recommended by:
    Bisbonian

    brings the national debt into question by virtue of simple
    algebra.  Expenditures-Revenues = Debt

    This is not the first time Republicans have been mathematically challenged and failed.

    "A Bill for an act introducing a new mathematical truth and offered as a contribution to education to be used only by the State of Indiana free of cost by paying any royalties whatever on the same, provided it is accepted and adopted by the official action of the Legislature of 1897"
    ....After the debate, a Representative offered to introduce him to Dr. Goodwin.  

    Professor Waldo [of Purdue Math Dept.] replied that he was already acquainted with as many crazy people as he cared to know.

    http://en.wikipedia.org/...

  •  I think Obama put the 4th amendment option.. (0+ / 0-)

    ...thoroughly to rest in this morning's press conference: If it gets tied up in legalities, which it will, no one will want to purchase our paper. It's that simple.

    Evolution IS Intelligent Design!

    by msirt on Tue Oct 08, 2013 at 09:01:06 PM PDT

  •  couldn't the Prez (0+ / 0-)

    do something along the lines of seeking a writ of mandamus to force Boehner to hold a vote?  

    "None are more hopelessly enslaved than those who falsely believe they are free." - Goethe

    by jlynne on Tue Oct 08, 2013 at 10:37:36 PM PDT

  •  Obama may be missing an opportunity here (1+ / 0-)
    Recommended by:
    semiot

    With all of these republicans making it clear that going into default is no big deal and with many rushing to microphones to let everyone know that we as a nation don't really have to pay all of our bills, we may well have stumbled upon a solution to the debt crisis.

    The GOPTP can't back down for otherwise they will either loose face or get primaried by someone even more radical or crazy than they are, so Obama will have to live with a default. That will place Obama in a difficult position since there won't be enough money to pay all the bills on time.

    Many have argued that it will be impossible to reprogram the computers that print the checks. However, as any programmer knows, some programs are easier to write than others and there is a very simple way for Obama to give everyone what they want by doing as the republicans ask. All he has to do is instruct Treasury to change just a few lines of code to check the zip code on the check.

    The way Obama can handle this is to do things the way the republicans want and prioritize the bills. This can be easily done by referring to the zip code on the check. If the zip code is directed to a district of a representative who has voted for default, then he should agree to the wishes and intentions of that representative and have the program delete that check. If the zip code is directed to a district of a representative who has voted against default, then he should agree to the wishes and intentions of that representative and have the program print and send the check. That way everyone would get what they voted for and there might be enough money left over to cover the bills as they come in. Those GOP reps and senators can claim victory for having their debt prioritization scheme enacted and have their pictures taken by the press for all to see.

    There might be a few who disagree. There ususally always is, but they could always either change their vote in a new vote on the debt ceiling increase, if they felt a new vote was necessary, or their constitutents could write their congressman and encourage them to change their vote. Either way everyone gets what they voted for, debt crisis solved, both democrats and republicans can claim victory. The best thing is that economic damage would be confined to those who asked for it and Obama and the nation can then focus on other pressing issues and no longer have to waste time on the deficit or debt ceiling problem.

    With this solution in hand, Obama should agree with the GOP. Allow the government to default as the GOP wants and solve the problem once and for all.

  •  Worst. Fucking. Idea. Ever (0+ / 0-)

    with the possible exception of minting a Magic Nickel worth A TRIZILLION DOLLARS but that one actually sounds as ass-plugged stupid as it is, so this one I think is worse since supposedly-intelligent people can type whole front page diaries that disguise the fact that this is the WORST. FUCKING. IDEA. EVER.

    Красота спасет мир --F. Dostoevsky

    by Wisper on Wed Oct 09, 2013 at 11:11:23 AM PDT

  •  Balkin's review of the legislative history (0+ / 0-)

    http://balkin.blogspot.co.uk/...

    What do we learn from this history? If Wade's speech offers the central rationale for Section Four, the goal was to remove threats of default on federal debts from partisan struggle. Reconstruction Republicans feared that Democrats, once admitted to Congress would use their majorities to default on obligations they did disliked politically. More generally, as Wade explained, "every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress."

    Like most inquiries into original understanding, this one does not resolve many of the most interesting questions. What it does suggest is an important structural principle. The threat of defaulting on government obligations is a powerful weapon, especially in a complex, interconnected world economy. Devoted partisans can use it to disrupt government, to roil ordinary politics, to undermine policies they do not like, even to seek political revenge. Section Four was placed in the Constitution to remove this weapon from ordinary politics.

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