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Constitution in the National Archives by Mr. T in DC
It was fun while it lasted, though I never thought this Administration would try anything so risky. And indeed, today the Treasury Department’s General Counsel, George Madison, via an email to the New York Times, says that they have no ability to issue debt if Congress doesn’t increase the debt limit. This ends speculation that the President could invoke section 4 of the 14th Amendment, and its clause that the public debt “shall not be questioned,” as an end run around the whole debt limit situation. Of course, it’s become completely clear that the President has no interest in end-running the debt limit vote, but using it as leverage to get major, transformational changes to the scope of government and the future of the social safety net in place.
Here’s the email:
To the Editor:
Contrary to Professor Laurence Tribe’s assertion (Op-Ed, July 8), Secretary Geithner has never argued that the 14th Amendment to the U.S. Constitution allows the President to disregard the statutory debt limit. As Professor Tribe notes, the Constitution explicitly places the borrowing authority with Congress, not the President.
The Secretary has cited the 14th Amendment’s command that “[t]he validity of the public debt of the United States… shall not be questioned” in support of his strong conviction that Congress has an obligation to ensure we are able to honor the obligations of the United States. Like every previous Secretary of the Treasury who has confronted the question, Secretary Geithner has always viewed the debt limit as a binding legal constraint that can only be raised by Congress.
What’s funny is that Tribe agrees with Treasury that the debt limit is a binding legal constraint. They only take issue with Tribe’s example of Geithner waving the 14th Amendment around back in May.
So Geithner’s idea of using the 14th Amendment as leverage was to point to it and say, “see, it shall not be questioned, so… go do your job.” This is as if the Constitution was a suggestion box for Congress, rather than the ruling authority.
But there’s no real use carping about this now. The President has made his decision. It’s only a matter of whether he can get the votes to agree, and how painful the result will be. The pain is now inescapable, with the Constitutional safety valve just shut off.
Incidentally, in the event of a default, the Treasury Department will explicitly be breaking the law, in one form or another. What they have said today is that they will not use the 14th Amendment of the Constitution, and instead break the law in other ways.
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If they just print the money and use that new printed money to pay their obligations, what laws will that violate?
Honestly, I still hope a deal is prevented. Despite these new claims, it seems if the choice is between invoking the 14th amendment, or hurting wallstreet profits…Obama will chose the prior, regardless of his current rhetoric.
Isn’t wonderful that the Administration, seemingly held hostage to those nasty GOP Congress Critters, threw yet another tool from their empty box of options. Why would they do that unless they’re exactly where they want to be?
And in the case of default, wouldn’t anyone who doesn’t get paid have standing to sue for the violation of the 14th amendment? Whereas invoking the 14th would seem to leave no one with standing.
So I guess they *do* want to fight this out in court.
had to fix that for ya david
So what is the Treasury Department going to do when the Republicans refuse to raise the debt limit? There is revenue still coming in. And there is no Congressional guidance about what to defer, what to rescind, what to pay now, what to pay later. Plus there is the absolute requirement that the US not default.
That is a carefully parsed statement as to what Tim Geithner is asserting.
If the government blows through the debt ceiling, it won’t matter a damn what Tim Geithner is asserting. It will be up to him to prevent default.
My reading of this statement is that it’s just more kabuki that does not say what it pretends to say.
It’s Ok because the only losers will be Main Street and what ever ws loses will be made up to them on the backs of Main Street
We’re fucked.
let me make the following point again;
we are in this position BECAUSE obama WANTS us in this position, he set it up in the first place by extending the right wing scheme to redistribute middle class wealth over to the wealthy (marketed as “bush tax cuts”)
he KNEW extending that scheme would cause that problem, he had to PRO-ACTIVELY extend that scheme for to still be in force
the man did this on purpose my friends
Rs will not refuse to raise the limit. They will offer a one-year raise with 10 years worth of cuts, and O will have ‘no choice’ but to cave to their terrorism, it will come up again in time for the ’12 elections and there will be nothing left for O to trade away. See my #7.
True – very true
Obama wants to screw Social Security. He never wanted the expansion of Medicaid in the ACA Health ins reform – just put there to get the $600 billion welfare check to the health ins. co’s via the subsidized mandate approved. And he has been going after Medicare for a while – cutting it back as a way to find funds for the ins co welfare check.
But do not expect the Democratic Party to resist because that would make him a failure.
And Gergen says getting the deal is good for the country and for Obama’s re-election – albeit not so good for democrats running for lesser office who want volunteers from “the base”.
Perhaps new college kids will build a new base – I will never know because if this goes through I will not be working for an Democrat ever again.
Hope you don’t mind me fixing that for you.
And yes: Obama and the upper 1% WANT the USA to be in the position that we are in right now, so that they can continue their ongoing rape, plunder & pillaging of the middle/working class. Make no mistake: this isn’t stupidity. It is, in fact, a kind of “eleven dimensional” chess. It’s just that Obama is playing that chess for his corporate overlords *against* the rest of the 98%.
I agree – Treasury is not asserting blowing through the debt limit is OK because they will just cut back spending in the appropriate areas – appropriate being defined by Obama in violation of the Constitution.
Obama just wants us all to pretend there is no 14th Amendment option, so Obama can say he was “forced” to screw us to save us.
The beatings will continue until moral improves. And DC media will explain it all to us.
Just playing Devils Advocate here…..
Lets say He did use it. Surely there would be some kind of lawsuit or other tactic from the repubs. And this would end up in the supreme court and we know how their votes go down.
I can just see politcally why they would avoid this if possible. Its a minefield that could go on for months.
Timmy’s Treasury Department? Color me shocked.
an administration that is too chickens**t to do a recess appointment would never even consider a constitutional challenge.
How is Social Security going to increase for the rich in this plan? They’re talking about decreasing the benefits for everyone, right?
Obama cannot cut back. That flies in the face of a court order gotten against Nixon who cut back the Office of Economic Opportunity. What he can do is defer payment, defer the date of contracting, and propose recissions in the FY 2012 budget. He can defer the booking of interest payments to the Social Security Trust Fund. He can negotiate deferments of interest payments with foreign governments and large private holders of government debt.
And he can increase IRS enforcement to increase the revenue stream.
The 14th amendment is not a blank check.
And he doesn’t invoke it. He has to obey it. So does Congress.
Why the focus on the Executive branch? This section of the 14th is a constitutional imperative on the Legislative branch to provide resources (either raise taxes or authorize borrowing) to pay prior, legally authorized debt. The constitutional issue is how do you compel Congress to obey the Constitution?
First Tribe, then Geithner, and now Pelosi all come out against this in the same day. Seems like they really are trying hard to kill this. We must have been on to something.
Then again, Treasury can just print the money, and pay the bills that way. That involves issuing no new debt.
I agree -
Indeed the idea of telling a military industrial contractor we plan to defer your payment brings a smile to my face -
as does the idea of telling the lobbyist that has been celebrating getting his clients hands on a few tax dollars that we now plan to defer the date of contracting and indeed plan to ask for a few rescissions in the FY 2012 budget.
As you note he can defer booking interest accruals to all debt that does not have debt interest directly paid out – like the Social Security Trust fund bonds and US Savings bonds – but when presented with a request to cash in those bonds it does get iffy. :-)
And I am sure China will understand and ask for nothing in return when we ask them to accept a deferment of interest payments.
All of that looks like fun. But of course the only point – and the whole point – of todays 14th Amendment will not be used comment – is to shore up the “they made me do it” defense as he screws Social Security with a chained CPI – the same chained CPI that he had Simpson suggest back to him in that report that failed to get Simpson Committee approval to send to Congress.
Damn lucky we did not get Hillary in the WH – you know how those Clinton’s are just like Obama. /s
Well weren’t there reports of Obama already disregarding OLC legal opinions in regards to Libya attack? So I mean if he wanted to ..ok I know you’re laughing….he could ignore that Treasury legal opinion? No? I’m not advocating or even naively thinking he’d go down that route (I believe he doesn’t want to), just pointing out his past record of following legal opinions.
Having said that, I agree with perris…this is Obama, these policies are his wishes , this is his negotiation…this is his ideology. The only thing left is will elected Democratic official go off this cliff with him in pursuit of his conservative ideology just because he sports a D after his name.
If they can decrease benefits for everyone else, they will not have to make adjustments on the collection side, which would presumably affect the wealthy first (assuming they hit the income cap before the rate).
They’re trying now to decide if they can privatize and steal it altogether, or push it toward means testing – then decide that those who won’t collect don’t have to chip in (that is, those that won’t $ need it, if you’re low income and likely to die before collecting, that’s tough nuts), then it’s an entitlement vs insurance pool, then it can be defunded just like medicaid.
I’m not going to put any weight whatever on statements like Madison’s that simply assert that the debt ceiling law will not be violated by this administration, until and unless they tell us how they plan to violate all the laws that legally obligate the Treasury to disburse money.
The day we hit the ceiling, that will be the choice — violate the debt ceiling law and thereby infringe Congress’s position as the sole borrowing authority for the US, or violate every law that obligates govt spending and thereby infringe Congress’s position as the sole determiner of US spending. That spending, per the Constitution, can only take place by way of public laws, and all that spending is a legal obligation once those laws are passed.
The Treasury Dept of which Madison is counsel has merely an executive function, not a decision-making, law-giving function. It just does what it is told by the law-making authority, the authority that must pass laws to either add funds to or pay them out of the Treasury, because the Constitution says that money goes in and out only by law. It’s great that Mr. Madison is four-square against ad libbing the bringing in of money in the absence of a rise in the debt ceiling, but he can’t be against that without being for his dept usurping Congressional authority and deciding who gets paid and who doesn’t. I’m not going to believe that he and his boss have really made the choice to honor the ceiling until and unless they fill us in on exactly how they plan to usurp the spending authority, who they plan to pay, and who they plan to stiff when the crunch comes.
He and his boss have to make a choice which law they’re going to break, if you want ot put it dramatically. I’m not a consitutional lawyer, and I suspect they have a less dramtaic way of characterizing a situation in which a responsible party faces contradictory legal requirements, requirements that cannot be both met. I would think that what the law calls for in that circumstance is that the party in question follow whichever horn of the dilemma is closest to what a reasonable person would think was the legislative intent, since both horns of a dilemma cannot be intended.
In this particular dilemma, can there be any question that laws obligating spending passed by both chambers, are a truer guide to intent than the refusal of one chamber of the legislature to raise the ceiling? Can there be any serious thought that the intent of the ceiling law was that, should it not be raised in the face of deficit spending that is clearly the legislative intent, witnessed by the budget the Congress just passed into law, that it act as a sort of self-destruct button for the US govt?
Well technically, its coined money (not paper) but you’re otherwise correct.
If this were any other President in this fix, Democrat or Republican, I’d have the cheerful thought that the WH realized they could legally mint as much jumbo coinage as needed, so the told Tsy it could let the constitutional option go.
However with this President, you have to assume the WH ordered Tsy to burn the lifeboats when they realized it was standing in the way of the shock doctrine.
It bring a smile to my face too, but i don’t think it’s ever going to happen. All this “constitution option is off the table” crap is just an excuse to make way for the deal that Obama really wants to make. The Constitutional option threatens to derail that deal, and so they are trying to get rid of it.
really, Treasury can’t print paper the same way it can mint coins?
But i totally agree, this administration is trying to get rid of every pesky lifeboat it can so that it can say it had no choice but to give in to republican demands. Even though Repubs didn’t even have Social Security on the table, Obama put it there!
spot on – as soon as the left reports a new life boat, Obama will burn it. As with the public option needing 60 votes, until it needed only 50, but Obama then ordering that it not be added to the budget reconciliation bill. Obama will get his result and his kisses from the rich and corporate and GOP and Gergen and the NYT and WP – all we affect is the path he takes to get that result.
Lemme see if I got this right. The debt of the USA cannot be questioned BUT, if we don’t have money it doesn’t have to be paid???? I guess, if I owed somebody but couldn’t pay them, the debt is still “legitimate”, just unpaid.
I got that. Who in DC, exactly,besides Bernie Sanders, is on OUR side?
I just don’t see this ending well for the middle class, the country as a whole, the president or the democratic party. Just the filty rich who get to keep on getting even MORE filty rich.
Well, as they say..”No black man has ever been re-elected president.” Looks like that “streak” will go unbroken.
This all reminds me of my sister who, when told her account was overdrawn, said, “I can’t be overdrawn, I still have checks left.”
I believe there is a quote but I don’t know it verbatum that makes the point;
“they cause it to rain and then complain about the water”
or something like that, that’s what the republicans do every time they “lower taxes” and that’s what obama did by extending the lifting of labors asset scheme marketed as “bush tax cuts”
he caused it to rain and now complains about the water
A run on savings bonds is not going to amount to much. And the procedure could honor it and say “The check is in the mail.”
As for China, they do not want to drive down exports to the US any more that the banksters have already done. They will be patient. They will get paid out of it. And likely be able to restructure their US debt holdings at higher rates within a year or so.
I’m not sure that the GOP intends to raise the debt ceiling. There are a sufficient number of “hell no” Republicans, freshman and otherwise who will never vote for raising the debt ceiling regardless of how much the putative cuts are. And they are convinced that the US is not going to default in any event. And Blue Dog Democrats have no incentive to vote for an increase in the debt ceiling if Republicans are sitting out. And Obama can’t pass it with just progressive Democrats in the House.
There aren’t the usual alignment of forces on this one. It is unpredictable how it will turn out. My bet is still on stalemate; no agreement.
Here’s what Obama is trying to get out of it. A debt ceiling that lasts until after the 2012 election. And his illusion might be, like the 2014 date on the implementation of health care exchanges, that the sacrifices that he makes now can be undone if there is a public backlash and a snapback in Congress. That to my mind ignores the extent to which the Congress is blind, deaf, and dumb to public opinion.
Politics is now a pure marketing exercise. The folks with the best ability to carpet bomb the media win. It would be the same for Hillary, Kucinich, Gravel, Feingold, whoever. It’s a corrupt system that has mechanisms to preserve the survival of the system. Politics as usual does not deal with it.
Just find some lawyer somewhere who disagrees, and put them in change of that part of the Treasury Dept. That’s what Dubya did… (or Cheney would beat Dubya with his shoe until Dubya agreed)
by taking payouts away from those who’ve invested he is able to then claim “surplus” and give even more tax cuts to those at the top who ALREADY pay less in taxes then everyone else
that’s how
good point there adam
if it weren’t obama’s doing then that would be the course of action
SINCE the “debt problem” was caused by obama aggressively and deliberately, your solution is the antithesis to his intentions
I agree – and I hope you are correct as Stalemate is a win when we have the always caving in Obama as our negotiator.
Charlie Brown meet football
The 14th Amendment merely clarifies and reinforce the original intent clearly stated in Article One:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts…
To borrow money on the credit of the United States;
And the House has a greater duty on the first enumerated power:
All bills for raising Revenue shall originate in the House of Representatives;
Republicans and conservatives make a big deal about the Constitution, but the get it wrong, but progresses just don’t seem to understand the Constitution and put the blame for much of what is wrong in governance where it belongs: Congress, and the voters who elected the representatives to Congress.
Stop blaming Obama for not changing the laws: only Congress can change the law, and since 1937, after the brief 1935-36 Congress, consent of Republicans has been required to pass all legislation, and given Republicans Senate leadership committing to make Obama fail by tanking the economy, and the Senate minority leader is willing to use his power to force Republicans to comply or lose their positions.
Republicans are willing to destroy to get their way which is clearly destructive for the nation.
I don’t see how both Democrats and Republicans committing to destroying the nation would accomplish anything.
No, Republicans have had Social Security on the table forever.
But read the Constitution, please. Obama can’t make any meaningful deal. Obama has less power over the Democrats in Congress than Boehner has.
Boehner doesn’t want to talk to any Democrat but Obama, thinking Democrats are somehow drones who mostly follow orders like Republicans follow the orders of Grover Norquist.
For Obama this is all theater for the public because he knows he has no power to get laws passed through Congress. He has no Constitutional role. A myth has been created that the President has power over Congress such that he can tell Congress what laws to pass. Obama is playing that role of myth.
For the moderate voters, Obama is sounding very reasonable, so if things fall apart, he is going to suffer less than Congress. Like Clinton did.
But think about Boehner’s triumphant statements in December which included statements about the tax cuts creating jobs. Let’s make sure Boehner gets the credit for the job creation that has resulted.
I’d like to see ads – or at least editorials – in major newspapers pointing out how many times Boehner and the other GOoPers voted to raise the debt limit, without raising taxes or fees, while Bush was president. Then contrast that with their current behavior. (Also contrast Mr O’s behavior with his promises/speeches before the 2008 election….)
They have to pay the debt, under the 14th amendment. They just don’t have to pay anything else, including Congresscritters. Or so I’ve been told.
Please, we need Obama to throw us a bone.
You need to look no further than the bizarre death of the public option; majority of senators ready to vote for it under reconciliation, majority of the public for it, 50 votes in the Senate were all that was needed, and poooooof…..the public option was pulled. Who pulled it out of the bill ? After campaigning for it, and probably the single most important campaign promise that he used to get elected. Folks, I’m probably older than most of you, and Obama is what we used to call a moderate republican. He’s a scam artist extraordinaire, wonderful talker. But he’s not now and never was a Democrat in the traditional sense of the word. He works for corporatists and elites. Direct your energy to getting to a part of the country that has a progressive state or local governing majority. If you’re stuck somewhere else, these guys will decimate you and your family. The only refuge are localities with majority progressives. Need healthcare ? move to Vermont. Live in an area where people actually get in the street in numbers and show their strength.
America ignores it’s own founding document…
I’m sorry but this might have been news in…2004…I mean 2000…the 80…60′s….1860′s….1776?
Yes, this might have been news the day after it was signed but then again it was never meant to be taken seriously