29 Jul 11
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. …
—from the 14th Amendment
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“Obama’s version of leadership is to implore the Republicans to accept a deal that is already on GOP terms.
Now, you may say that the president has no responsible alternative. Since the GOP won’t compromise, Obama must keep compromising, so the United States doesn’t default. There are the Asian money markets to worry about, and those solons, the credit-rating agencies, that were so prescient in their ratings of sub-prime.
But you would be wrong. It would be far better for Obama to invoke the 14th Amendment and announce that Washington will make good on its debt while Republicans and Democrats continue to negotiate the budget.
Can you imagine the Republicans taking him to court to demand that the president let the United States default? Or better yet, can you imagine the GOP basing an impeachment on that premise?
But Obama may not have the fortitude to pursue this course.”
—Robert Kuttner, 7/27/2011
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This notion has been bandied about recently. I’d like to hear especially from our students of Constitutional law and American civics on here as to whether:
(1) There is any real Constitutional issue here that the President might hang his hat on? And,
(2) In any event, is Kuttner right in his analysis that it is a sound pragmatic response to the instant case?
29 Jul 11
1 edit
Originally posted by vistesd
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. …
—from the 14th Amendment
_________________________________________________
“Obama’s version of leadership is to implore the ...[text shortened]... ent, is Kuttner right in his analysis that it is a sound pragmatic response to the instant case?
Speaking at an event in Maryland on Friday, the question of invoking the 14th amendment arose. President Obama responded by saying;
“There’s a provision in our Constitution that speaks to making sure that the United States meets its obligations, and there have been some suggestions that a president could use that language to basically ignore this debt ceiling rule, which is a statutory rule; it’s not a constitutional rule.
“I have talked to my lawyers … They’re not persuaded that that is a winning argument.”
29 Jul 11
1 edit
Originally posted by vistesdI would say that whatever Obama wishes to do he can and will do, however, I don't think he wants to meet the debt deadline. Instead, I think he would much prefer to watch "problems" arise from the situaiton and blame it on the GOP. After all, politics is about elections, not governing.
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. …
—from the 14th Amendment
_________________________________________________
“Obama’s version of leadership is to implore the ...[text shortened]... ent, is Kuttner right in his analysis that it is a sound pragmatic response to the instant case?
29 Jul 11
1 edit
Originally posted by badmoonWhatever Obama wants to do he will do. He simply does not wish to do it.
Even conservatives, rational ones, have to agree that using that power is preferable to a default.
So what does that tell you? It tells me he prefers the political theater to score political points.
29 Jul 11
Originally posted by utherpendragon[/b]Yeah, I had put that statement down as Obama's bad negotiating skills generally. Which maybe means I lean toward the pragmatic question--is Kuttner right about that or not?Speaking at an event in Maryland on Friday, the question of invoking the 14th amendment arose. [b]President Obama responded by saying;
“There’s a provision in our Constitution that speaks to making sure that the United States meets its obligations, and there have been some suggestions that a president could use that lang ...[text shortened]... ave talked to my lawyers … They’re not persuaded that that is a winning argument.”
29 Jul 11
I tend to agree with the basic 14th amendment argument here. The problem is mechanism. Can the courts force Congress to appropriate funds? Questionable. If Congress repudiated debt that could be found to be unconstitutional but I don't know whether forcing Congress to spend money might not be a political question that the courts may steer clear of.
29 Jul 11
1 edit
Originally posted by sh76Thanks, Sh. I'm going to pack it in for the night, and let some more responses develop. But it is interesting that your legal take is different from what Obama claims his legal advisors gave him (as Uther noted).
I tend to agree with the basic 14th amendment argument here. The problem is mechanism. Can the courts force Congress to appropriate funds? Questionable. If Congress repudiated debt that could be found to be unconstitutional but I don't know whether forcing Congress to spend money might not be a political question that the courts may steer clear of.
29 Jul 11
Originally posted by whodeyAre you suggesting that you would prefer that Obama single-handedly raise the debt ceiling, rather than endure more Congressional gridlock? I'm not quite sure how to respond to this, coming from the poster who has repeatedly criticized the office of the presidency as holding too much political power already.
It tells me he prefers the political theater to score political points.
29 Jul 11
Originally posted by sh76The problem is mechanism.
I tend to agree with the basic 14th amendment argument here. The problem is mechanism. Can the courts force Congress to appropriate funds? Questionable. If Congress repudiated debt that could be found to be unconstitutional but I don't know whether forcing Congress to spend money might not be a political question that the courts may steer clear of.
For already incurred obligations, would not the mechanism simply be the Treasury issuing debt above the ceiling in order to pay them? Since the position of the President in this case would be that prohibiting further Treasury debt (above the ceiling) would mean a violation of the 14th Amendment, he would simply order Treasury to issue sufficient instruments to prevent that from happening.
That debt has to be monetized by someone—either private buyers or the Fed. As the Economist pointed out last week, people were still willing to lend to the government at low yields; but yields are likely to rise, I would think, under any scenario involving that reflects diminishing creditworthiness.
I’d like to hear from Tel and Palynka, too, on the economic ramifications.
29 Jul 11
Originally posted by vistesdI imagine that would be the mechanism, too. I'm not sure I have much to add...
[b]The problem is mechanism.
For already incurred obligations, would not the mechanism simply be the Treasury issuing debt above the ceiling in order to pay them? Since the position of the President in this case would be that prohibiting further Treasury debt (above the ceiling) would mean a violation of the 14th Amendment, he would simply order Trea ...[text shortened]... creditworthiness.
I’d like to hear from Tel and Palynka, too, on the economic ramifications.[/b]
If the bonds are in fact emitted despite Congress, I imagine prices could fall a bit but I don't expect them to plummet. Markets have been very cool about it so far and we're almost at the 11th hour. If the government starts defaulting or cutting drastically expenditures to not emit debt then markets could get a lot more jittery.
Either way, raising the debt ceiling for now is by far the best option. Republicans who want expenditure down should negotiate a proper medium term plan to bring it down, but one that doesn't commit seppuku in the short term.
29 Jul 11
Originally posted by vistesdWell, yes, as Executive, the President could simply defy Congress and issue the notes, come what consequences may come. I think everyone realizes that the President has the power if not the right to do this.
[b]The problem is mechanism.
For already incurred obligations, would not the mechanism simply be the Treasury issuing debt above the ceiling in order to pay them? Since the position of the President in this case would be that prohibiting further Treasury debt (above the ceiling) would mean a violation of the 14th Amendment, he would simply order Trea ...[text shortened]... creditworthiness.
I’d like to hear from Tel and Palynka, too, on the economic ramifications.[/b]
But the issue with the constitutionality is that the courts are the arbiters what would, if anyone, force another branch to do something based on constitutional requirements and I don't see the courts ordering the President to issue noted from the federal reserve or ordering Congress to allocate funds for this purpose.
29 Jul 11
1 edit
Originally posted by sh76How long would it take for the question to be finalized by the courts? I think we are talking about acting a priori, and letting the courts make their determination ex post facto. What would they likely do--issue a cease and desist order?
Well, yes, as Executive, the President could simply defy Congress and issue the notes, come what consequences may come. I think everyone realizes that the President has the [b]power if not the right to do this.
But the issue with the constitutionality is that the courts are the arbiters what would, if anyone, force another branch to do something b o issue noted from the federal reserve or ordering Congress to allocate funds for this purpose.[/b]
EDIT: With the deadline close, waiting for a court determination would make the whole thing moot.
