Gerry Canavan

the smartest kid on earth

Posts Tagged ‘Gordian Knot

And Brutus Is an Honorable Man

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If I didn’t know better, I’d almost have to think Republicans aren’t negotiating in good faith:

So when the GOP’s economic policy team sat down to make the strongest case they could for growth-inducing deficit reduction, they recommended a mix an 85:15 mix, not a 100:0 mix. And then, when the Obama administration agreed to an 83:17 mix, the Republican leadership walked out of the room and demanded that taxes be excluded from the deal altogether. How do you negotiate with that?

Mr. President, it’s time for Plan B.

UPDATE: Jonathan Chait takes aim at the only person I’ve seen arguing against the wisdom of this plan, who is weirdly also Ezra Klein:

Indeed, it’s not even clear that the Republican leadership actually wants the enormous and destructive power it now demands. Its base may be demanding a debt ceiling showdown, out of specific opposition to Obama and general ignorance of how the debt ceiling works. But John Boehner knows full well that we can’t just ignore the debt ceiling. If Obama successfully asserts the power to ignore the debt ceiling vote, then he’ll allow the debt negotiations to proceed in a less fraught environment, and have defused a massive source of ongoing political instability. Cutting a deal to lift the debt ceiling may soothe the markets more in the short term, but it merely pushes the political risk further back.

More than that, Ezra’s argument (he has a second attempt here) is incoherent at a fundamental level. Whatever the markets might infer about the dysfunction of the American political system from Obama’s declaring the debt ceiling unconstitutional, there’s no way it could ever be worse than default, which would catapult us long past inference, and simply remove all doubt.

Cutting the Gordian Knot, Debt Ceiling Edition

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In the event that congressional irresponsibility makes default impossible to avoid, he should order the secretary of the Treasury to simply disregard the debt limit and sell whatever securities are necessary to raise cash to pay the nation’s debts. They are protected by the full faith and credit of the United States and preventing default is no less justified than using American military power to protect against an armed invasion without a congressional declaration of war.

Furthermore, it’s worth remembering that the debt limit is statutory law, which is trumped by the Constitution which has a little known provision that relates to this issue. Section 4 of the 14th Amendment says, “The validity of the public debt of the United States…shall not be questioned.” This could easily justify the sort of extraordinary presidential action to avoid default that I am suggesting.

Garrett Epps, Bruce Bartlett, Jonathan Zasloff, and Matt Yglesias all argue that the administration can just call the GOP’s bluff on the debt ceiling, with Zasloff going so far as to argue no one would have legal standing to challenge Treasury if it did so:

But if the administration takes the position that it must continue to borrow to comply with the Fourteenth Amendment, who would stop it? Put another way, who would have standing to sue? Taxpayers clearly would not. Individual members of Congress? No: the Supreme Court’s 1997 decision in Raines v. Byrd would seem to foreclose that. Congress as a whole? Perhaps; but what would it require for Congress as a whole to bring the lawsuit? A joint resolution would be blocked by Senate Democrats. That leaves the House to bring the lawsuit, and one could easily argue that one house would not have standing any more than individual members of Congress would.

Written by gerrycanavan

May 19, 2011 at 9:03 pm