Here are a couple of things to keep in mind as the great contrived national debt crisis enters its final week.
First, the Republicans are starting to lose whatever credibility they had with the broad public, as regular people finally start focusing on this story. The economic stakes are very high, President Obama was willing to give them most of the loaf, and they still wouldn't make a deal.
Second, no matter what the White House and Speaker Boehner claim, there is no way to do a big complex budget agreement between now and next week. The details are far too complex. Even the Gang of Six proposal was nothing more than broad outlines.
Third, as this drama goes down to the wire, and financial markets begin to contemplate the possibility that the United States will actually default on its debts, the pressure on the Republicans by their Wall Street allies will only grow.
At some point this week, stock and bond markets will begin to start swooning, and the usual wise guys will begin making high-risk bets at the expense of financial stability as a whole. Credit rating agencies, which should be accorded zero credibility after their role in causing the financial collapse by blessing junk sub-prime securities as Triple-A, could start downgrading the debt of the United States.
And then things will get really interesting. The President of the United States will be revealed to be holding more of the cards -- if he has the nerve to start playing his hand well (for a change).
At that point, there are only two basic choices. Either the Republicans and the White House agree to some kind of short- or medium-term increase in the debt ceiling, in exchange for some kind of deal with details to be supplied later. Or the president invokes the 14th Amendment and declares that the debts of the United States will be paid.
Under the first option, the deal could include a target figure for budget cuts, perhaps with relative tax increases and spending cuts spelled out -- perhaps not. It could also include some kind of "fast track" process for Congress to give the budget deal an up or down vote after the details are filled in.
One of the gimmicks being discussed is for a "super-Congress" that would come back with a long-term deal for the actual Congress to vote up or down -- a kind of mutant hybrid of the Bowles-Simpson Commission and the Gang of Six, on steroids.
I don't trust that end-game, because it gives too much power to all the forces of austerity that have been too dominant in this debate all year. And it creates too much risk of Democrats being stampeded to give up too much on Social Security and Medicare and get too little in the way of tax hikes on the rich in return.
The New York Times had a very instructive chart today, by the indispensable Teresa Tritch, showing that most of the budget shortfall going into the financial crisis was the result of the Bush tax cuts and wars -- and that most of the rest of it since 2008 was the consequence of lost revenues from the recession itself. It had very little to do with public spending. This is the kind of detail that gets lost in the contrived hysteria.
My guess is that the Republicans are so intoxicated with their own negativity that they will not be able to get to yes, even though Obama keeps trying to give away the store. The House Republican Caucus, in thrall to the Tea Party, is just too locked in to the premise of no new revenues under any circumstances
So then we are left with the president's powers under the 14th Amendment, an approach that Obama seemed to rule out last week, but may need to come back to.
The fact is, the ritual of Congress periodically voting to approve an increase in the national debt only dates to the World War I era. Before that, government incurred debt and rolled it over as necessary. Congress, of course, approved legislation to levy and collect taxes, but management of the public debt was the business of the executive branch.
And playing cute with the debt ceiling only dates to New Gingrich in the 1990s. Before that, increases in the debt ceiling, as necessary, were entirely pro forma votes.
The 14th Amendment, in Section 4 provides that "The validity of the public debt of the United States.... shall not be questioned." Although the 14th Amendment was part of a package of Amendments intended to resolve issues left over from the Civil War, the Supreme Court has interpreted the public debt provision as giving the president very broad authority.
The government can go on selling bonds to cover its costs as long as money markets accept them. Lately, the Federal Reserve has been helping that process along. Whether Congress has voted to increase the permissible amount of total debt is a technicality. It's not as if the government runs out of money next week.
If President Obama were to invoke that emergency authority to prevent the economy from collapsing as money markets began shunning U.S. government bonds, it is hard to imagine Republican leaders suing the president... to demand what? That he let the economy go off a cliff? And it is even harder to imagine the Supreme Court, even a Court as partisan and corrupted as the Roberts Court, voting to tie Obama's hands in an economic emergency that -- keep in mind -- is entirely contrived.
Obama, the Great Conciliator, finally showed a bit of irritation and a bit of spine this past week. It would be perverse of him to reward Republican intransigence by agreeing to an 11th hour deal that, by definition, would have to be on almost entirely Republican terms to be approved by the Tea-Party besotted House of Representatives.
Better to show some leadership in an emergency, invoke the 14th Amendment, calm money markets, and leave the Republicans sputtering mad. Obama might even come to enjoy exercising leadership.
Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His most recent book is A Presidency in Peril.
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This is where Republicans are trying to rewrite history... And the dumb sheep among their ranks (unfortunately that's a lot...) are buying it, with their "Stop the spending!", "The spending is out of control!", etc. Those fools have wholeheartedly bought this fiction – hook, line and sinker... It drives me mad...
He can do this by simply putting any federal spending in red districts at the bottom of the list of priorities of the spending to be paid for. Without the need to spend government monies in red districts, there will be no need to increase the debt ceiling. By removing all federal spending in red districts except that he sees as absolutely essential he can give those in GOP and Tea Party congressional districts exactly what they want: a life free of the evils of government. They will be on their own to enjoy the freedom they are clamoring for. Because red districts get more money from the federal government than they pay in, this will relieve the pressures on public programs in blue congressional districts. Of course, their may be some in red districts, who may complain that they are not getting their social security checks, funding for economic development or government services, however, they are free to either vote for representation that believes in government solutions or, as Ronald Reagan so famously noted, "they can vote with their feet".
"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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void."
Obama could simply decide that GOP efforts to destroy the US economy is an insurrection that threatens to enslave the middle class and poor, thereby holding all effort by the GOP illegal and void.
Alternatively, since congress failed to pay its bills, he can simply establish a priority system to pay the debt with monies available. To do this he will place all federal spending in GOP and Tea Party districts on hold until other bills are paid.
This has several advantages. It gives the GOP exactly what they want, the US government out of their lives, and the freedom to be on their own. Since red districts spend more federal money per capita than do blue districts, elimination of spending in red districts will almost immediately eliminate the need to raise the debt ceiling.
Those who complain its not fair can vote for those who believe in government or can as Ronald Reagan said, "vote with their feet".
http://www.abajournal.com/news/article/law_profs_debate_whether_14th_amendment_makes_debt_ceiling_unconstitutional/
*ouch*
The best line in the article :)
"House Speaker John Boehner is rejecting President Obama’s offer to make historic cuts to the federal government and the social safety net, saying in a statement Saturday evening that he can not agree to the tax increases Democrats insisted on as part of the bargain."
http://www.frumforum.com/boehner-rejects-obamas-debt-ceiling-bargain
Obama folds like he's in on the deal, anyway. If he capitulates on any social programs without restoring old tax rates on the super-wealthy or getting us out of our multiple wars he is toast in the next election. Us non-wealthy will get skewered.
But we probably won't get any good choices, anyway, and not even a challenger from the Dems. Sigh.
President Deficit when he left office
Clinton + .15 trillion (surplus)
Bush Jr. - 1.2 trillion (deficit)
Obama - 1.25 trillion (deficit end of 2010)
now go on repugs and "refudiate" that.
Yeah, Obama was innocent...Err, You guys do understand that Obama's been President now for a short time, don't you?...
As far as your "refutation" - I think you'll find Obama's spending habits to be more than that....
http://www.nytimes.com/2011/07/24/opinion/sunday/24sun4.html?ref=todayspaper
Maybe if you learned to ask nicely, a friend or neighbor could help you read the graphs.
To hell with them. Then, the President can, in a separate bill, draft his Plan he explained tonight for deficit reduction and send it to the House, then, on to the Senate. Some Repubs in the House will not vote for it; keep sending it back and forth until election time and see "what the American people want". It will be used during the campaign; I think Repubs will have a hard time selling the "no tax breaks for the wealthy on their loopholes and corporate perks".
What a Track Record for this administration...Holder and clan runs guns across the Mexican boarder with the ATF....
Kagan may be getting a invitation back to congress...The old, "What did you know and when did you know it.." and Obama will ignore law and allow his arrogance to do the talking....
So It seems possible the Dems very own, Kagan Impeached and Obama impeached, to join Clinton...(Impeached) - What a record of success that would be huh?
Well, they say good things come in three's.....
Last year, Obama should have told the Republicans that he does not negotiate with blackmailers and that he would invoke the 14th if they attempted government default. Obama is making the same mistake that Carter made with the Iranians back in 1980. Be cool and don't make a big issue of the hostage situation. It only gives the Republicans a platform to scream their demands. Also, by being tough, Republicans would have nothing to gain by holding the economy hostage.
a) "I Hope Obama will Invoke the 14th"....Translation; We don't abide by law!
b) "And FORCE the courts"...Translation: When the people rule against you FORCE them....
c) "If Clinton were President"...Translation: We can relay on an Impeached President!!
d) In the same sentence mine you!! "Obama , Carter"....Yeah, baby there's our #3 and #4 hitters in the line up....
e) "Republicans, holding the economy Hostage" - Translation: NO FAIR! Who said the House can put out a plan we don't like!
The Left...Always amusing....Their Motto..."If the people don't want something FORCE IT...BAN IT...I don't care Just do something, Children are staving in Korea!
Sounds like Panic to me now the bills are due...
Don't worry though...Its all part of that hope and change thing...
*Slapping my knee and laughing out loud*
a) "We don't abide by the law." Translation: We'll ignore the 14th Amendment.
b) "FORCE" Translation: Who cares how the Supreme Court would rule, we'll impeach him anyway.
c) "We can rely on an impeached president." Translation: If we don't get our way, we'll impeach him - Liberals are evil anyway.
d) "Our #3 and #4 hitters" Translation: My heroes George W. Bush who wiped away a budget surplus and Rick Perry who'll erase the debt by cutting taxes for the rich!
e) "NO FAIR" Translation: It's my way or the highway.
Sounds like you Republicans are going to pat yourselves on your backs when you cause the economy to collapse. Oh, the people who lose their jobs are just a bunch of lazy bums. Oh please give that poor billionaire a tax cut it's so unfair that Obama gave the poor a break by cutting their social security taxes. Oh and by the way, throw that kid in jail who didn't pray at school.
How long does it usually take for the impeachment process? Clinton would know...
Real patriotic American aren't you!
How much are you getting paid by Koch Brothers to propagate their propaganda on this site!