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Mon Dec 10, 2012, 10:10 PM

Atlantic - "How Obama Can Prevent Another Debt-Ceiling Crisis" - Good points

Interesting take in this article. Rather than ignoring the debt limit and giving House Republicans an excuse to try to impeach him, which they may do anyways, simply start shutting down parts of the Federal Government Clinton style to turn up the heat on Republican efforts to use the debt limit to extort tax cuts for the rich and cuts to the middle class.

http://www.theatlantic.com/politics/archive/2012/12/how-obama-can-prevent-another-debt-ceiling-crisis/266053/

Section 4 of the Fourteenth Amendment provides that "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." Its purpose was to prevent Southern Congressmen and Senators from trying to hold payment of the nation's debts hostage in order to get their way on Reconstruction policies. The point of Section 4 was to put this sort of hostage-taking beyond ordinary politics. The framers of the 14th amendment did not want future politicians to threaten to destroy the country's finances by refusing to pay the country's debts in order to win political concessions from their opponents. After all, once politicians did so successfully, they would try it over and over again and it would become a normal feature of politics. That is precisely what we are seeing now.

If Congressional Republicans are threatening to let the nation to default on its debts if Obama doesn't agree to their demands, they are violating the Constitution. And the president should call them out for such an outrageous demand. But does that mean that the president can raise the debt ceiling himself to remedy the violation?

Not so fast. Article I, section 8 of the Constitution gives Congress, not the president, the authority to borrow on the credit of the United States. Even so, under section 4 of the Fourteenth Amendment the president has an independent constitutional obligation not to allow the validity of the debt of the United States to be put into question. That means, at the very least, that the president must make sure that interest payments continue on existing federal bonds and similar obligations. He must assure bondholders that they will continue to get paid even after the debt ceiling is reached.

If the president follows his constitutional obligations, then some government operations will not get funded because payments to the bondholders must come first. That means a partial government shutdown, with more and more of the government closed as the president continues to pay the bondholders.

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Arrow 8 replies Author Time Post
Reply Atlantic - "How Obama Can Prevent Another Debt-Ceiling Crisis" - Good points (Original post)
TomCADem Dec 2012 OP
Cha Dec 2012 #1
John2 Dec 2012 #2
The Time is Now Dec 2012 #3
SteveG Dec 2012 #4
geek tragedy Dec 2012 #5
TomCADem Dec 2012 #6
geek tragedy Dec 2012 #7
CTyankee Dec 2012 #8

Response to TomCADem (Original post)

Tue Dec 11, 2012, 01:22 AM

1. K&R

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Response to TomCADem (Original post)

Tue Dec 11, 2012, 05:39 AM

2. He should

 

also continue to communicate to the Public and the people that voted for him. This includes organizations like the Union. The Republicans demand is the President want yield on cutting Social Security, Medicare and Medicaid. If they don't get explicit, then the president should spell it out to the Public what the Republicans want to cut.

That way he enlists the public in the fight against obstructionists, and as someone that actually voted for him, I would like to break these obstructionists back, no matter what it takes. It would be better to do this early in the Administration, to set the tone for the rest of his second Term. What I'm saying, I invite this show down with people like Lindsey Graham. The first thing cut, should be to Graham's constituents. They need to get on the phone with Lindsey.

And as far as impeachment, Only the Senate can convict. THe Republicans will be wasting their time, just like they did with Clinton. You need two thirds to convict. So if the Senate is behind President Obama, the Repukes will never be able to convict him if it is political. And little Lindsey was one of the original house members that delivered Clinton's impeachment. The Senate ignored him. Now he is making demands in the Senate against another elected Democratic President.

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Response to TomCADem (Original post)

Tue Dec 11, 2012, 08:10 AM

3. He won't, according to O'Donnell

On last night's show, Lawrence O'Donnell mentioned that the president has said specifically that he will not invoke the 14th Amendment to deal with the issue. As a constitutional law scholar, he must have his reasons, but, as the OP points out, it does seem to be right on point.

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Response to The Time is Now (Reply #3)

Tue Dec 11, 2012, 07:26 PM

4. The process described is a supportable process

shutting down the federal government to free up the cash to pay the bondholders has no Constitutional issues, what would be questionable would be using the 14th to unilaterally raise the debt ceiling himself. It is this second approach which Obama has ruled out, not the first.

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Response to TomCADem (Original post)

Tue Dec 11, 2012, 11:49 PM

5. The real question is how the markets would price bonds issued

under that authority.

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Response to geek tragedy (Reply #5)

Wed Dec 12, 2012, 02:13 AM

6. No new debt would be issued, so not a problem...

...and per the article, under this scenario, the President would be required under the 14th Amendment to give bond payments priority in order to avoid default. Thus, rather than negotiate and give concessions, the option is to start shutting down the Federal Government similar to what Bill Clinton did when there was no federal budget.

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Response to TomCADem (Reply #6)

Wed Dec 12, 2012, 09:47 AM

7. A government shutdown--including Medicare and Social Security payments being withheld--

is not exactly a rosy scenario.

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Response to geek tragedy (Reply #7)

Wed Dec 12, 2012, 12:41 PM

8. but is that what happened when Clinton shut down parts of the government?

IIRC, it shut down some national parks (I don't remember what else) but I don't recall Medicare and SS not going out...

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