Congress, Constitutional Law, Courts, Justice, Politics

Can The Default “Crisis” Be Solved Unilaterally?

Respectfully Submitted by Lawrence Rafferty-Guest Blogger

Following up on the continuing saga of the debt default crisis and our earlier articles, I had a few more thoughts on how the crisis should be handled. The first suggested solution came from President Clinton who argued for it in a recent interview.

“Former president Bill Clinton said he’d solve the debt crisis Old School Style: just raise the roof. In an interview with the National Memo, Clinton said he believed a deal would be struck before August 2, but if he were in charge, and both sides failed to reach an agreement, he would simply raise the debt ceiling himself using powers granted under the 14th amendment of the Constitution. The amendment says that the validity of the public debt shall not be questioned. Clinton said he’d “force the courts to stop me.” “I think the Constitution is clear and I think this idea that the Congress gets to vote twice on whether to pay for [expenditures] it has appropriated is crazy,” Clinton said.”  Bill Clinton

At first I did not think much about it because it was a concept that I was unfamiliar with, but the idea has not gone away. It struck home when I read an article by two conservative law professors partially supporting the same process that President Clinton had suggested.

“PRESIDENT OBAMA should announce that he will raise the debt ceiling unilaterally if he cannot reach a deal with Congress. Constitutionally, he would be on solid ground. Politically, he can’t lose. The public wants a deal. The threat to act unilaterally will only strengthen his bargaining power if Republicans don’t want to be frozen out; if they defy him, the public will throw their support to the president. Either way, Republicans look like the obstructionists and will pay a price.  Where would Mr. Obama get his constitutional authority to raise the debt ceiling?  Our argument is not based on some obscure provision of the 14th amendment, but on the necessities of state, and on the president’s role as the ultimate guardian of the constitutional order, charged with taking care that the laws be faithfully executed. “ New York Times  (Registration may be required)

The proposal by Prof. Posner and Prof. Vermuele is not the same as the one advanced by President Clinton, but the result is the same. Posner and Vermuele are suggesting that the President has authority to act in order to protect that the laws are faithfully executed. These two professors are suggesting this approach as a constitutional matter and as a negotiating stance. I understand their approach, but I am not sure it isn’t too late for this approach since the White House already shot down President Clinton’s suggestion.  Reuters

In light of the risks involved if we do default, I have to agree with Prof. Posner and Prof. Vermuel’s negotiating approach and their reliance on the President’s duty to make sure that the laws are faithfully executed. However, it is not a perfect answer or a perfect theory. Something needs to get done and one of these arguments just might get the country over this self-inflicted hurdle.  How should Congress and how should the President act in order to stave off a default that will kill Main Street?  The default clock is ticking!
Additional Source:  Think Progress

Respectfully submitted by Lawrence Rafferty-Guest Blogger

76 thoughts on “Can The Default “Crisis” Be Solved Unilaterally?”

  4. Blouise,

    I suspect Bonehead of the Year award will soon be awarded to the present speaker…

  5. I wonder what the teabaggers are going to call themselves in 2016 … sorry, just thinking ahead.

  7. Swarthmore,
    Thanks for the links! Boehner is in deep with his Tea Party “friends”. They seem to want Chaos and they just may get what they want. I think they will be upset when they get what they are asking for!

  8. I’ll also add this to the list of why you are considered a jackass.

    Seems like you don’t know much at all, now do you?

    Let me explain it to you using small words you might have a better chance of understanding.

    I have tried on multiple occaisons to maintain civil discourse and it is never reciprocated. You and GeneH/Buddha are the two worst offenders. So, now I merely adjust my civility to match the civility I am accorded. Those who are respectful get treated with respect. Jackasses like you get treated with none. You reap what you sow.

    Also, as I’ve pointed out before and which I know you’ve seen, I have indicated where each forum regular, including you, started in with the personal attacks first. So I maintain the moral high-ground. If you want to rebut that evidence, provide your evidence. Or you can stop the insults; otherwise, just keep coming back for your quid-pro-quo.

  9. Add this to the list of why you are considered a troll…..

    BTW I did not know there was a pass fail on the LSAT….Geeze…I just thought that either you did better than other….Maybe you are not an attorney after all….But a Troll Baiter and not a very good one at that…

  10. add reading comprehension to elf boy’s failings? How did you pas the LSATs with that poor reading comprehension, elf boy.

  11. Kdpanzee, recall this:

    Kdpanzee,

    You said: kderosa
    1, July 27, 2011 at 9:52 am
    How about just being a little more even-handed with admonishments to stay on topic, rather than selectively criticizing only the people whose opinions you disagree with.

    Condescension trolling is no more elevated than any other form of it.

    Man o man are you two faced and duplicitous….

  13. Kdponzi,

    Why would anyone expect you to maintain some civility….Only because you called for it on another thread….tsk, tsk….Sick puppy aren’t you. Is this double speak at its best….You bet…

  15. Coherence isn’t elf boy’s strong suit. Neither are fully formed arguments and grammar conventions. In fact, about the only thing he is good for is disruption and insults, especially when it’s time to change his tinfoil hat.

  16. Anon elf,

    True interets rates will go up, but I think you have it all wrong on who it is that is going to benefit and who it is that it is going to hurt? Government benefits from artificially low interest rates because they are borrowers. Lower rates means lower finance payments. The banking cartel loves this because they get to underwrite massive expenditures and then soak the taxpayers for the bill. They also love fractional reserve lending which allows them to turn 100 dollars of deposits into 1000 dollars in loans. Think about that and then re-analyze why our economy collapsed. Im not being sarcastic, I mean truly consider why that would lead to unsustainable economic growth.

    On the other hands who does sky high interest rates benefit? Certainly not the government, higher rates means higher finance payments eating into the budget. Banks will find it much harder to attract potential borrowers, but what that means is the borrowers they do attract will have considered the risks with much more scrutiny then someone who can get a 2.5% SBA loan and open a store where you pay other people to fix your cereal for you.

    The people who benefit the most from high interest rates are savers. The higher the interest on deposits the more attractive savings become. Given that actual savings, not fraudulent federal reserve credit expansion, is the bedrock of sustainable economic growth, ( ill go into more detail on this if you really want but i thought id spare everyone another economic lecture) we WANT higher interest rates. The banks want to keep the status quo of low interest rates and massive government debt so they can keep enabling the governments cheap credit addiction. Why do you think moodys is even weighing in on this? Their actions and demeanor should tell you all you need to know about who is on what side of this.

    Also im not really sure where you’re going with the fema, nsa stuff towards the end? Too many “…” in the middle of your sentences for me to make an informed guess.

  17. I appreciate everyone’s responses….One thing that will certainly happen if the US Bond rating is reduced to aa+ then interest rates sky rocket and the cost to borrow increases dramatically….Those good folks on Wall Street will do everything that they can to increase the interest rates and make Obama into another cater…..Then there is the other side of the coin…and that is FEMA…What role do they play as well as NSA…..With the way I recall…when Bush has it written…if we have an emergency…..then the President is duty bound to act….Necessary and Proper or Janet can take over….Hmmmm..Just thoughts to ponder….

  18. Curt,
    you are correct that the deficit reduction is just a tool by the Republicans to try to reduce spending. Of course, the only spending they seem to want to reduce is for so-called entitlement programs. Social Security has no impact on the deficit and the Right is calling for cuts to benefits, all the while demanding no new revenue. The 14th amendment and/or the approach Posner and Vermuele may be the best option in a few days.

  19. Here is a link to a Think Progress story that is interesting: “During a radio interview today, Rep. Emanuel Cleaver (D-MO), the Chair of the Congressional Black Caucus, said the over 40 members of the CBC will be voting ‘no’ on any plan that cuts government services — including the plan put forward by Senate Majority Leader Harry Reid (D-NV). Cleaver says the caucus insists on a clean vote to raise the debt ceiling — the same kind of vote “we’ve done repeatedly since 1917.” Cleaver explained, “we can deal with the deficit questions later, but let’s not send the most powerful nation on the planet into default.” Rep. Allen West (R-FL), the one Republican member of the CBC, has said he will support Speaker Boehner’s (R-OH) plan.” http://thinkprogress.org/special/2011/07/27/281251/congressional-black-caucus-chair-we-will-only-support-a-clean-debt-ceiling-vote/
    President Obama now has some more incentive to hold out for a clean debt ceiling bill.

  20. All the main players in the debate over the debt ceiling have said that
    default is not an option. Getting a bil that raises the debt ceiling and
    reducing the defcit throug congress is looking less and less likely.Only
    two options remain – getting a clean bill to raise the ceiling passed at the
    last minute or invoking the 14th ammendment. The political pressure
    may be so great on the Republicans come August 1st that they just may
    agree to a clean bill but I wouldn’t bet the farm. I think Obama has to have
    the 14th ammedment as a back up plan but only as a last resort. One
    thing that I don’t quite understand is why the defecit has to be tied to the
    debt ceiling. I understand that the defecit is important and needs to be
    addressed but they are really two separate issues.

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