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Memo to White House: Time to Use the Constitutional Option

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It’s Time to End This Hostage Crisis

This has gone far enough. Whereas Speaker John Boehner has failed [2] to persuade his own party in the House to support his proposed bill to lift the debt ceiling short-term—which the Senate and the President would have rejected anyway—and whereas there is no Senate bill that the House would pass, and whereas the U.S. is projected to begin defaulting on debt obligations on August 2, the time has come for President Obama to exercise the constitutional (or 14th Amendment) option to raise the debt ceiling by executive order. It is time to end this hostage crisis. Section 4 of Article XIV [3] (14th amendment) of the Constitution reads in part:

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.

The 14th Amendment was passed in the wake of the Civil War to settle matters of wartime debt, while the debt ceiling [4] itself dates back to 1917 when the U.S. was entering World War I. (See “Smash the Ceiling [5]” by James Surowiecki in The New Yorker.)

Former President Clinton, who left office with a projected budget surplus and therefore has debt reduction credibility, has publicly said [6] at least twice that the constitutional option should be used if nothing else works to avert default on federal debt obligations. The Democratic members of the House of Representatives, including minority leaders Steny Hoyer [7] and James Clyburn [8], have urged the President to use this option to protect the nation’s economic stability and pledged that their members will stand behind him if he does.

Jack M. Balkin, a constitutional law professor at Yale University (and blogger at Balkinization [9]) who has been cautious about the use of the 14th Amendment option, was quoted by the New York Times [10] as saying, “You’re not supposed to hold the validity of the public debt hostage to achieve political ends.” He adds, “Section 4 is a fail-safe that only comes into operation when everything else is exhausted.” President Obama himself taught constitutional law at the University of Chicago, so he is familiar with the arguments for and against. Mostly his administration has stressed the arguments against, which in the opinion of many only weakened his bargaining position against the all-or-nothing Tea Party faction of the House Republicans.

We find much good sense in a July 5 Washington Post opinion piece [11] by Nation publisher Katrina Vanden Heuvel:

If the Aug. 2 deadline arrives and no deal has been made, Obama could use a plain reading of that text to conclude—statutory debt ceiling or not—that he is constitutionally required to order the Treasury to continue paying America’s bills. In that sense, this is not just a constitutional option, it is a constitutional obligation . . .

President Obama should commit to exercising this obligation—as a last resort. And he should commit publicly, as soon as possible. 

Doing so will give him the leverage he lacks in the debt-ceiling negotiations. Right now, Republicans’ willingness to let the economy default, consequences be damned, gives them enormous leverage. . . .

Most would agree that taking such a step would be out of character for a president who has avoided this brand of confrontation. But great leaders adapt to adverse circumstances, and this is no exception. The president doesn’t just have a political and legal obligation here; he has a moral one, too.

This option is not without political risks. Expect impeachment hearings, possibly a case being heard (sympathetically) by the Supreme Court—the one with justices Antonin Scalia, Clarence Thomas, John Roberts, Samuel Alito. All kinds of excitement leading up to the 2012 election. Surely the White House envisions the worst, and recoils, but we the people must assure the President and the grown-ups in Congress that we’ll back them up. It’s only a matter of our nation’s full faith and credit, stability, and integrity.

We have long been irate, incensed, and other hot words that Obama was even prioritizing deficit reduction—why are we having this argument?—after he and the PussyDems last year let the G.O.P. bully through an extension of the upper-income Bush tax cuts [12] that have done so much to drain the Treasury over the past decade. As we’ve insisted in letters to the White House and Congress (echoing knowledgeable economists and policy people), reducing federal spending by billions or trillions at a time when no other large domestic entity is spending at all will increase unemployment, choke consumer spending, and shrink the economy still further. Seriously, austerity in a recession? Really, the Herbert Hoover–Andrew Mellon route to recovery and reelection? By exercising the Constitutional option, maybe these multi-trillion-dollar “grand bargain” cuts to federal spending won’t have to take place after all. Can we hope? Yes we can?

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In “Getting Specific on Spending [13],” Atlantic business and economics editor Megan McArdle identifies some federal government functions that would cease if the debt ceiling were not raised—and even if the bare necessities like Social Security, Medicare, Medicaid, V.A. benefits, debt service, and military payrolls, were paid. For anyone who may think that not raising the debt ceiling would not be “a big deal,” here is a sampling:

•   You just cut the IRS and all the accountants at Treasury, which means that the actual revenue you have to spend is $0.

•   The nation’s nuclear arsenal is no longer being watched or maintained.

•   The doors of federal prisons have been thrown open, because none of the guards will work without being paid, and the vendors will not deliver food, medical supplies, electricity, etc.

•   The mortgage market evaporates. Hope you didn’t need to buy or sell a house!

•   The border control stations are entirely unmanned, so anyone who can buy a plane ticket, or stroll across the Mexican border, is entering the country.

•   No federal emergency assistance, or help fighting things like wildfires or floods. Sorry, tornado people! Sorry, wildfire victims! Try to live in the northeast next time!

•   The FDIC and the PBGC suddenly don’t have a government backstop for their funds, which has all sorts of interesting implications for your bank account.

•   All of our troops stationed abroad quickly run out of electricity or fuel. Many of them are sitting in a desert with billions worth of equipment, and no way to get themselves or their equipment back to the US.

 And so on. As Kevin Drum at Mother Jones observes, “40 Percent Less Government Will Be Fun! [14]

 

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