NYT: Could Obama just ignore the debt ceiling?

[nsd]

In the ongoing debate over raising the debt ceiling, one option has not had much prominence: whether the Obama administration could ignore it altogether, and just spend the money it owes anyway. Would that be legal?

Matthew Zeitlin at The New Republic spoke with a few political scientists, budget wonks and constitutional scholars who argue that it would be. An excerpt:

"
Garrett Epps, a legal journalist and professor at University of Baltimore School of Law, has made an even broader argument in a pair of articles for The Atlantic’s website. In an interview, Epps told me that there was a strong argument that the debt ceiling is unconstitutional because it exceeds the legislative branch’s power of the purse. The argument goes like this: Because Congress already appropriated the funds in question, it is the executive branch’s duty to enact those appropriations. The debt ceiling, then, is legislative “double-counting,” because the executive branch is obligated to spend the money Congress appropriates, without having to go back and ask again for permission.
"

Of course, ignoring the debt ceiling could have some severe political consequences, especially since most Americans do not seem to realize that doing so primarily requires making good on payments already promised, as opposed to committing to new spending. That may explain why most Americans still are against raising the ceiling.

http://economix.blogs.nytimes.com/2011/06/28/could-obama-just-ignore-the-debt-ceiling/

[applegrove]

1. Man I hope Obama nails the GOP on this. People follow a strong leader.

[msongs]

3. now that is funny nt

[Cali_Democrat]

5. Don't hold your breath. n/t

[vroomvroom]

10. LOL

[Tx4obama]

2. Yes. Because of the 14th amendment the debt ceiling is unconstitutional - see below

14th Amendment: Democratic Senators See Debt Ceiling As Unconstitutional
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4899878

[Ozymanithrax]

4. So where does the money come from to make these payments?

I get the argument that it may be a Constitutional issue, but Obama can not raise money or levy taxes. Does he just borrow from Peter ot pay paul? Does the Fed do that?

[nsd]

8. The Treasury Department would borrow the money as it already does .

This wouldn't entail Obama authorizing new taxes, as he certainly doesn't have the power to do that. Nor would Obama be authorizing new spending, as he doesn't have the power to do that either. Rather, he would argue that Congress has already approved a certain amount of spending and he is authorizing borrowing to implement the previously approved spending. Basically, the argument is that Congress, by approving a budget, has already given the executive the authority he needs.

[Ozymanithrax]

13. So if Congress approved borrowing the funds, it approved paying them back...

An interesting idea, and certainly that applies to individuals who take loans.

I suspect it will go to the SCOTUS, as it appears to violate Congress's enumerated powers. But it is a good plan to put in place to use against the extremist right flying us over the cliff.

[MannyGoldstein]

6. He's ignoring the War Powers Act, so why not? nt

[stevenleser]

7. Interesting idea, but if Congress sues and requests an emergency ruling by the SCOTUS?

I predict 5-4 in favor of the Republicans.

Obama can still ignore that and continue and then the recourse left to Congress is to impeach him, if they can.

[nsd]

9. Democrats control the Senate.

It's not clear that the House alone could challenge this move in court.

[pnwmom]

11. I don't think the Senate would sue. Why would Reid do that? n/t

[Ozymanithrax]

14. Spending bills mus originate in the House, and the House may go to the SCOTUS...

The Senate will defend the idea that borrowing money alost approves paying it back.

[Liberal_Stalwart71]

12. He can't because we still have to pass a budget to keep the government running.

He's damned if he does, damned if he doesn't.

[azul]

15. They pretty much have to raise the limit.

If they don't, the USA will lose its credit rating and all hell will break loose in international banking and loans. The dollar is the reserve currency and US treasuries the equity the banks gamble with as collateral. The cost then of financing the US debt would be prohibitive and we would go belly-up amid world financial crisis.

The Banks won't let it happen.