5 ms·

The debt ceiling "debate" is farcical. The House GOP is arguing we shouldn't pay our bills, even when the laws and actions that generated that spending were pas

by boc 3y ago

The debt ceiling "debate" is farcical. The House GOP is arguing we shouldn't pay our bills, even when the laws and actions that generated that spending were passed legally through Congress. I'm of the opinion that the WH should simply ignore the debt ceiling, invoke the 14th Amendment, and keep paying our debts as legally required.

rayiner 3y ago
The debt ceiling is about issuing new debt to fund expenditures. It has nothing to do with paying existing debts, or the 14th amendment. Calling on Biden to bypass Congress is asking him to to violate one of the foundational provisions of Article I. Section 8 makes clear that the power "to borrow Money on the credit of the United States" belongs to Congress.
- ProjectArcturis 3y ago
  But if Congress has passed budgets telling the Executive branch how much to tax and how much to spend, and also tells the Executive not to borrow to make up for the shortfall, what is the Executive supposed to do?
  - thsksbd 3y ago
    [dead]
  - DaiPlusPlus 3y ago
    > what is the Executive supposed to do? Personally, I’d like to see what happens if the entire executive branch just goes on-strike, French-style.
  - pavon 3y ago
    The constitution clearly grants congress with the sole powers to tax and borrow, and nothing in the 14th amendment changes that. Interestingly, it is silent on the power to spend. So while the executive must generally faithfully execute the laws congress passes, if they are in conflict there is no choice but to break one of them, and adjusting spending is the one most within the executives defined powers.
  - rayiner 3y ago
    Spend what's in the treasury on the highest priority items. Remember that line from Hamilton, where George Washington says "I'm working with a third of what the Congress has promised." Revenues falling short of budgets is not a new problem justifying novel solutions.
  - jsmith45 3y ago
    By not spending all the money that congress has appropriated. Technically appropriations are a maximum the government can spend, not a requirement to spend that money. However, Congress does not like the idea of the present just refusing to provide all the appropriated funds to some programs, so they wrote the Impoundment Control Act of 1974, which requires the president to make all the appropriated funds available to the specified programs. Note the word available. Programs are not technically obligated to use all the money, but technically that is up to the program's head. In practice programs will almost always use as close to all of the money as they can get, since if they don't use all the funds, Congress might choose to reduce their appropriation next year. Because the constitution seems to mandate mandates paying the debt, and leaves the amount of debt up to congress (Article I Section 8), upon hitting the debt ceiling, the president must continue to pay the debt, and must not issue more debt. But the Constitution does not require making all appropriations available so the Constitution will overrule the Impoundment Control Act of 1974, in such a scenario. Clearly if it is impossible for a president to adhere to both the constitution, and a statutory law, it is the statutory law that gives way, not the constitution itself. So X-day should trigger a partial government shutdown, while the government continues to pay its debt, and fulfill contracts and other statutory payments, but cuts off enough other spending to stop exceeding revenue. This would be similar to what happens when congress fails to pass an appropriations bill.
    - dragonwriter 3y ago
      > But the Constitution does not require making all appropriations available There are some wrinkles, but generally, litigation over the President’s ability to decline to spend appropriated funds has indicated that it largely does. Now, if Congress had connected the debt ceiling to either a specific formula for funding reduction or a specific grant of authority to impound appropriations, that would be different, but as it is the President, assuming both are independently valid, cannot faithfully execute laws appropriating funds and the law setting the debt limit.
      - jsmith45 3y ago
        If the constitution required it, then then they would not have needed the Impoundment Control Act.
- lovich 3y ago
  Congress already passed laws approving these expenditures which the president is supposed to execute on, also as per the Constitution. Congress has currently created a situation where they are demanding that certain activities are created and acted on, and are simultaneously refusing to agree to fund them. The 14ths wording seems pretty clear that the American government is required to pay its bills. If Congress didn’t want to have these bills they shouldn’t have approved the programs.
  - rayiner 3y ago
    > The 14ths wording seems pretty clear that the American government is required to pay its bills. It clearly doesn't say anything about "bills." Section 4 says: > 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. The distinction between "debt" and "expenses" is clear and longstanding. Even in the middle ages people would be able to tell you the difference between the crown repaying borrowed money and the crown paying expenses: https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=5349&context=open_access_etds https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?artic....
- deleted 3y ago
  [deleted]
- ROTMetro 3y ago
  The debt ceiling was created so that Congress does not have to pass a new bill for each time bonds are issued. It's purpose is to streamline running a modern country, not to be a weapon against the running of the country. It is not and was never intended as a sword of Damocles to keep debt down. It is also carries less weight than the 14th amendment as the Constitution supersedes laws created by Congress like the debt limit was.
  - rayiner 3y ago
    You've got it backwards. Congress has effectively delegated its power to issue debt to the Treasury. That would ordinarily be unconstitutional. But the Supreme Court has authorized such delegation so long as Congress provides an "intelligible principle" by which the executive must exercise the power: https://en.wikipedia.org/wiki/Nondelegation_doctrine https://en.wikipedia.org/wiki/Nondelegation_doctrine. The point is that Congress ultimately remains in control. The debt-ceiling is what makes that whole exercise constitutional to begin with. Congress said: "okay, Treasury can borrow money, but only up to this much." If the executive disregards the debt ceiling, that would break the fiction of delegation, and the executive will have fully wrested a fundamental Congressional power away from Congress. That's the same reason why the 14th amendment cannot override the debt ceiling. Yes, the debt ceiling is a statute. But without it, Treasury has no power to issue any debt.
    - ROTMetro 3y ago
      Dude that is what I said. It's only purpose is so that Congress doesn't have to approve EVERY BOND issue. Congress can for sure approve a new bond issue separate of the debt ceiling. The Dems should put forward a special bond bill to fund keeping the government running that isn't a raise on the debt ceiling but just a bond bill for a specific bond sale. Good luck seeing the Republicans argue not passing that (it's not an increase to the debt ceiling after all). The debt ceiling is purely to make issuing debt easier but was created for and has no other purpose than administrative ease and lower the amount of bills Congress has to pass. It was never intended as a sword of Damocles, and it is definitely superseded by the 14th Amendment. Hope the Republicans enjoy the civil rights violation lawsuits from everyone who suffers actual damages when their mortgage interest rates go up due to the Republican's violating the 14th Amendment so that the Republicans can benefit from that fallout. Especially now that the head of the Republican party is on the record stating that a failure to raise the debt limit will benefit the Republican's politically come election time.
- BaseballPhysics 3y ago
  > The debt ceiling is about issuing new debt to fund expenditures. It has nothing to do with paying existing debts, or the 14th amendment. This is absolutely incorrect. The debt ceiling is also about existing debt because servicing that debt is one of the government's expenditures. Specifically: > By hitting the limit and failing to pay interest payments to bondholders, the United States would be in default, lowering its credit rating and increasing the cost of its debt. https://www.investopedia.com/terms/d/debt-ceiling.asp https://www.investopedia.com/terms/d/debt-ceiling.asp And doing so would violate the 14th amendment which states that "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." In short, in past years Congress authorized the government to spend, and in doing so drove the issuance of government bonds. By failing to increase the debt ceiling now, Congress is effectively stopping the government from paying interest on the debt previously issued to pay for those past expenditures they authorized. In effect, they ran up the credit card and now they're stopping the executive from paying the bill.
  - pseudo0 3y ago
    The US can cover debt servicing costs indefinitely without raising the debt ceiling. It would cause a lot of other cuts to essential services though, so obviously that is not a desirable outcome either. But it is incorrect to frame this as hitting the debt ceiling necessarily forcing a default.
    - deleted 3y ago
      [deleted]
    - BaseballPhysics 3y ago
      And it's equally incorrect to claim that the debt ceiling does not, in any way, have an impact on existing debt, as was claimed by the person I was responding to. Moreover, the executive's ability to independently trim spending absolutely has limits, and I've seen no credible claims that the executive can service debt costs "indefinitely": https://www.crfb.org/papers/qa-everything-you-should-know-about-debt-ceiling#what%20happens https://www.crfb.org/papers/qa-everything-you-should-know-ab... > So-called “prioritization” of payments, or making sure certain obligations among the more than 80 million that get paid per month are paid before others – such as servicing debts to bondholders before making other payments in order to avoid technical default – has been criticized as unrealistic by Treasury officials and economists.
- jsmith45 3y ago
  Congress controls expenditures already. The president is required make all appropriated funds available to the programs in question. Now technically the programs are allowed not to spend all the appropriated money, but that is up to those running that program, and as a general rule those programs will spend all the money, to within a rounding error. If the president were to issue orders to agencies to not spend all appropriated money on specific programs that would be considered "impoundment", which was prohibited by the Impoundment Control Act of 1974. Congress also largely controls revenue. The overwhelming majority of revenue is taxes. There is little that the president can do to significantly change the revenue received. [1] Since congress has left a deliberate deficit, the president is left with no choice but to issue more debt to make up that shortfall. But the debt ceiling would prevent that. The classical thinking (for some reason) is that if the debt ceiling is hit, the president will be forced not to pay the interest on the debt, since the appropriations are mandatory. This is the view that sees the debt ceiling itself as questionably constitutional, viewing the act of appropriating more than expected revenues to be authorizing the issuance of debt. Unfortunately it is also a wrong view. The correct view is that it is the Impoundment Control Act of 1974 that is unconstitutional, and that upon hitting the debt ceiling the President is obligated to impound appropriations as needed to avoid going over the debt ceiling. The result would probably be a partial government shutdown, similar to what happens when congress fails to pass an appropriation bill. This, of course, only works if the revenue received still exceeds the required interest payments on the debt. ----- Footnote: [1] The treasury cannot even print more paper money, since that is up the federal Reserve for Federal Reserve Notes, and while U.S. Notes are technically still authorized, Congress has set a limit of $300,000,000 U.S. Notes. It could mint more coins and deposit them with fed, but manufacturing costs are appropriated funds, and it is not possible to mint enough normal coins with the appropriated amounts to make a dent. Many coins (including the penny, and the >$1 precious metal ones cost more to make then their face value). Hence why the trillion dollar coin proposal used a platinum coin, which is the only category where the Treasurer gets to pick the size design and face value.
  - rayiner 3y ago
    There is one additional wrinkle. The Treasury issuing bonds in disregard of the debt ceiling creates a constitutional problem. Although the debt ceiling itself is statutory, Treasury issuing bonds is an exercise by the executive of powers committed to Congress under Article I, and delegated to the Treasury under specific terms. If there was no debt ceiling, there the Second Liberty Bond Act of 1917 is probably an unconstitutional delegation of power to the executive. The debt ceiling is the "intelligible principle" that saves the whole scheme from non-delegation doctrine. Given that, you're correct. Faced with a choice between unconstitutionally exercising powers delegated by Congress in violation of the express terms of delegation, and violating an ordinary statute, clearly the correct course of action is to violate the statute.
willio58 3y ago
This is why the WH isn't budging on negotiating on this, and I agree with them on that. The time to debate has come and gone, threatening to put the credibility of the US in peril because one side wants to get some bill passed is just silly. Also we need to look at which presidencies inflate the debt burden, and that's more and more commonly solely one side, the same side threatening to put our country in peril. It's almost like massive tax cuts for the rich have left our country with less money to pay our bills. Weird!
DennisP 3y ago
Exactly. The budget itself is a law that the executive is required to carry out. If Congress passes contradictory laws, the president has to make a decision on which to obey, and is supposed to do whatever gives him the least arbitrary power. Just following the budget is less arbitrary than effectively wielding a line-item veto by deciding which items get funded. Then the economy will carry on, and if the GOP sues and actually wins, it will be very clear that they were the ones who blew it up. I doubt they'd be dumb enough to carry through with that.
- oneTbrain23 3y ago
  Unfortunately that cant work as you like. UK has their Feds too and can print more easily than US but debts require purchase. Saudi and China already stop buying. Liquidity of T-bills have dropped drastically compare what it was 10 years ago. Now Fed can step in and buy those debts pumping printed money directly to US government coffers. This in turn fire up inflation. Already many countries actively aboid using USD. Reduction of using USD in worldwide commerce now hit back American shores. So as long as US governments not reigning the expenditure, Fed showing printing money DIRECTLY, inflation will keep penalising Americans. This time, there are alternatives compare to 70s. People can migrate. Immigrant can stop migrating to USA (Asians now stopped significantly migrating and investing in US in the last 3 years). Anytging Americand needed like Russian uranium and Chinese goods are now sold to American market via blackmarket. This in turn fuel the criminal organization. This is why Americans now facing rampant crimes as the increase in crime couldnt be match by law enforcement. So all this talk of ignoring debt ceiling already happening since a decade ago and the repercussions already in the works. The more you want to ignore the ceiling the more of the above hitting Americans.
0zemp2c 3y ago
its simple - they can push Biden to the brink, and if things break, people blame the President less than 10% of Americans even know who McCarthy is, no one will blame him
- Balgair 3y ago
  If the US does default, then Biden probably will use the 14th amendment. Unfortunately for the Republicans that are trying to play brinksmanship, that will make Biden look like a hero. A huge economic disaster occurs, doesn't matter who caused it, but then Biden gets to swoop in and solve it with the flick of a pen. Cue victory lap. Sure, the Republicans will try to tie it down and to make it seem like he caused it. Doesn't matter though, because he's the one that solves it. As Rove said, never let a good crisis go to waste.
  - ars 3y ago
    > Unfortunately for the Republicans that are trying to play brinksmanship Democrats think that. Republican voters are well aware that the the GOP is not actually going to let the US default. But because Democrats seem unaware of this the GOP is using it as a good time to negotiate with little risk.
    - raverbashing 3y ago
      They should call the bluff of the GOP then
jscipione 3y ago
The 14th Amendment does not authorize the White House to pay debts without the Congress. The debt ceiling debate is not farcical, it is congressional.
ars 3y ago
> The House GOP is arguing we shouldn't pay our bills No they are arguing if we didn't spend so much we wouldn't be in this problem in the first place. The mistake you are making is thinking that there is any chance whatsoever the GOP will actually let the US default on it's debts. There is zero chance of this. This is simply an opportune time to negotiate, that's all. "Wait till the last minute."
thsksbd 3y ago
Last month the GOP passed a House bill increasing the debt ceiling till March 2024 whilst limiting budget cuts to 2022 levels. Seems reasonable, who would argue that the US 2022 - a Democrat controlled budget - was fiscally austere? It also has automatic budget increases. Senate has has a month to reject it, modify it, propose something else. They did nothing.

by boc 3y ago

rayiner 3y ago

The debt ceiling is about issuing new debt to fund expenditures. It has nothing to do with paying existing debts, or the 14th amendment. Calling on Biden to bypass Congress is asking him to to violate one of the foundational provisions of Article I. Section 8 makes clear that the power "to borrow Money on the credit of the United States" belongs to Congress.

ProjectArcturis 3y ago
But if Congress has passed budgets telling the Executive branch how much to tax and how much to spend, and also tells the Executive not to borrow to make up for the shortfall, what is the Executive supposed to do?
- thsksbd 3y ago
  [dead]
- DaiPlusPlus 3y ago
  > what is the Executive supposed to do? Personally, I’d like to see what happens if the entire executive branch just goes on-strike, French-style.
- pavon 3y ago
  The constitution clearly grants congress with the sole powers to tax and borrow, and nothing in the 14th amendment changes that. Interestingly, it is silent on the power to spend. So while the executive must generally faithfully execute the laws congress passes, if they are in conflict there is no choice but to break one of them, and adjusting spending is the one most within the executives defined powers.
- rayiner 3y ago
  Spend what's in the treasury on the highest priority items. Remember that line from Hamilton, where George Washington says "I'm working with a third of what the Congress has promised." Revenues falling short of budgets is not a new problem justifying novel solutions.
- jsmith45 3y ago
  By not spending all the money that congress has appropriated. Technically appropriations are a maximum the government can spend, not a requirement to spend that money. However, Congress does not like the idea of the present just refusing to provide all the appropriated funds to some programs, so they wrote the Impoundment Control Act of 1974, which requires the president to make all the appropriated funds available to the specified programs. Note the word available. Programs are not technically obligated to use all the money, but technically that is up to the program's head. In practice programs will almost always use as close to all of the money as they can get, since if they don't use all the funds, Congress might choose to reduce their appropriation next year. Because the constitution seems to mandate mandates paying the debt, and leaves the amount of debt up to congress (Article I Section 8), upon hitting the debt ceiling, the president must continue to pay the debt, and must not issue more debt. But the Constitution does not require making all appropriations available so the Constitution will overrule the Impoundment Control Act of 1974, in such a scenario. Clearly if it is impossible for a president to adhere to both the constitution, and a statutory law, it is the statutory law that gives way, not the constitution itself. So X-day should trigger a partial government shutdown, while the government continues to pay its debt, and fulfill contracts and other statutory payments, but cuts off enough other spending to stop exceeding revenue. This would be similar to what happens when congress fails to pass an appropriations bill.
  - dragonwriter 3y ago
    > But the Constitution does not require making all appropriations available There are some wrinkles, but generally, litigation over the President’s ability to decline to spend appropriated funds has indicated that it largely does. Now, if Congress had connected the debt ceiling to either a specific formula for funding reduction or a specific grant of authority to impound appropriations, that would be different, but as it is the President, assuming both are independently valid, cannot faithfully execute laws appropriating funds and the law setting the debt limit.
    - jsmith45 3y ago
      If the constitution required it, then then they would not have needed the Impoundment Control Act.
lovich 3y ago
Congress already passed laws approving these expenditures which the president is supposed to execute on, also as per the Constitution. Congress has currently created a situation where they are demanding that certain activities are created and acted on, and are simultaneously refusing to agree to fund them. The 14ths wording seems pretty clear that the American government is required to pay its bills. If Congress didn’t want to have these bills they shouldn’t have approved the programs.
- rayiner 3y ago
  > The 14ths wording seems pretty clear that the American government is required to pay its bills. It clearly doesn't say anything about "bills." Section 4 says: > 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. The distinction between "debt" and "expenses" is clear and longstanding. Even in the middle ages people would be able to tell you the difference between the crown repaying borrowed money and the crown paying expenses: https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=5349&context=open_access_etds https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?artic....
deleted 3y ago
[deleted]
ROTMetro 3y ago
The debt ceiling was created so that Congress does not have to pass a new bill for each time bonds are issued. It's purpose is to streamline running a modern country, not to be a weapon against the running of the country. It is not and was never intended as a sword of Damocles to keep debt down. It is also carries less weight than the 14th amendment as the Constitution supersedes laws created by Congress like the debt limit was.
- rayiner 3y ago
  You've got it backwards. Congress has effectively delegated its power to issue debt to the Treasury. That would ordinarily be unconstitutional. But the Supreme Court has authorized such delegation so long as Congress provides an "intelligible principle" by which the executive must exercise the power: https://en.wikipedia.org/wiki/Nondelegation_doctrine https://en.wikipedia.org/wiki/Nondelegation_doctrine. The point is that Congress ultimately remains in control. The debt-ceiling is what makes that whole exercise constitutional to begin with. Congress said: "okay, Treasury can borrow money, but only up to this much." If the executive disregards the debt ceiling, that would break the fiction of delegation, and the executive will have fully wrested a fundamental Congressional power away from Congress. That's the same reason why the 14th amendment cannot override the debt ceiling. Yes, the debt ceiling is a statute. But without it, Treasury has no power to issue any debt.
  - ROTMetro 3y ago
    Dude that is what I said. It's only purpose is so that Congress doesn't have to approve EVERY BOND issue. Congress can for sure approve a new bond issue separate of the debt ceiling. The Dems should put forward a special bond bill to fund keeping the government running that isn't a raise on the debt ceiling but just a bond bill for a specific bond sale. Good luck seeing the Republicans argue not passing that (it's not an increase to the debt ceiling after all). The debt ceiling is purely to make issuing debt easier but was created for and has no other purpose than administrative ease and lower the amount of bills Congress has to pass. It was never intended as a sword of Damocles, and it is definitely superseded by the 14th Amendment. Hope the Republicans enjoy the civil rights violation lawsuits from everyone who suffers actual damages when their mortgage interest rates go up due to the Republican's violating the 14th Amendment so that the Republicans can benefit from that fallout. Especially now that the head of the Republican party is on the record stating that a failure to raise the debt limit will benefit the Republican's politically come election time.
BaseballPhysics 3y ago
> The debt ceiling is about issuing new debt to fund expenditures. It has nothing to do with paying existing debts, or the 14th amendment. This is absolutely incorrect. The debt ceiling is also about existing debt because servicing that debt is one of the government's expenditures. Specifically: > By hitting the limit and failing to pay interest payments to bondholders, the United States would be in default, lowering its credit rating and increasing the cost of its debt. https://www.investopedia.com/terms/d/debt-ceiling.asp https://www.investopedia.com/terms/d/debt-ceiling.asp And doing so would violate the 14th amendment which states that "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." In short, in past years Congress authorized the government to spend, and in doing so drove the issuance of government bonds. By failing to increase the debt ceiling now, Congress is effectively stopping the government from paying interest on the debt previously issued to pay for those past expenditures they authorized. In effect, they ran up the credit card and now they're stopping the executive from paying the bill.
- pseudo0 3y ago
  The US can cover debt servicing costs indefinitely without raising the debt ceiling. It would cause a lot of other cuts to essential services though, so obviously that is not a desirable outcome either. But it is incorrect to frame this as hitting the debt ceiling necessarily forcing a default.
  - deleted 3y ago
    [deleted]
  - BaseballPhysics 3y ago
    And it's equally incorrect to claim that the debt ceiling does not, in any way, have an impact on existing debt, as was claimed by the person I was responding to. Moreover, the executive's ability to independently trim spending absolutely has limits, and I've seen no credible claims that the executive can service debt costs "indefinitely": https://www.crfb.org/papers/qa-everything-you-should-know-about-debt-ceiling#what%20happens https://www.crfb.org/papers/qa-everything-you-should-know-ab... > So-called “prioritization” of payments, or making sure certain obligations among the more than 80 million that get paid per month are paid before others – such as servicing debts to bondholders before making other payments in order to avoid technical default – has been criticized as unrealistic by Treasury officials and economists.
jsmith45 3y ago
Congress controls expenditures already. The president is required make all appropriated funds available to the programs in question. Now technically the programs are allowed not to spend all the appropriated money, but that is up to those running that program, and as a general rule those programs will spend all the money, to within a rounding error. If the president were to issue orders to agencies to not spend all appropriated money on specific programs that would be considered "impoundment", which was prohibited by the Impoundment Control Act of 1974. Congress also largely controls revenue. The overwhelming majority of revenue is taxes. There is little that the president can do to significantly change the revenue received. [1] Since congress has left a deliberate deficit, the president is left with no choice but to issue more debt to make up that shortfall. But the debt ceiling would prevent that. The classical thinking (for some reason) is that if the debt ceiling is hit, the president will be forced not to pay the interest on the debt, since the appropriations are mandatory. This is the view that sees the debt ceiling itself as questionably constitutional, viewing the act of appropriating more than expected revenues to be authorizing the issuance of debt. Unfortunately it is also a wrong view. The correct view is that it is the Impoundment Control Act of 1974 that is unconstitutional, and that upon hitting the debt ceiling the President is obligated to impound appropriations as needed to avoid going over the debt ceiling. The result would probably be a partial government shutdown, similar to what happens when congress fails to pass an appropriation bill. This, of course, only works if the revenue received still exceeds the required interest payments on the debt. ----- Footnote: [1] The treasury cannot even print more paper money, since that is up the federal Reserve for Federal Reserve Notes, and while U.S. Notes are technically still authorized, Congress has set a limit of $300,000,000 U.S. Notes. It could mint more coins and deposit them with fed, but manufacturing costs are appropriated funds, and it is not possible to mint enough normal coins with the appropriated amounts to make a dent. Many coins (including the penny, and the >$1 precious metal ones cost more to make then their face value). Hence why the trillion dollar coin proposal used a platinum coin, which is the only category where the Treasurer gets to pick the size design and face value.
- rayiner 3y ago
  There is one additional wrinkle. The Treasury issuing bonds in disregard of the debt ceiling creates a constitutional problem. Although the debt ceiling itself is statutory, Treasury issuing bonds is an exercise by the executive of powers committed to Congress under Article I, and delegated to the Treasury under specific terms. If there was no debt ceiling, there the Second Liberty Bond Act of 1917 is probably an unconstitutional delegation of power to the executive. The debt ceiling is the "intelligible principle" that saves the whole scheme from non-delegation doctrine. Given that, you're correct. Faced with a choice between unconstitutionally exercising powers delegated by Congress in violation of the express terms of delegation, and violating an ordinary statute, clearly the correct course of action is to violate the statute.

willio58 3y ago

This is why the WH isn't budging on negotiating on this, and I agree with them on that. The time to debate has come and gone, threatening to put the credibility of the US in peril because one side wants to get some bill passed is just silly. Also we need to look at which presidencies inflate the debt burden, and that's more and more commonly solely one side, the same side threatening to put our country in peril. It's almost like massive tax cuts for the rich have left our country with less money to pay our bills. Weird!

DennisP 3y ago

Exactly. The budget itself is a law that the executive is required to carry out. If Congress passes contradictory laws, the president has to make a decision on which to obey, and is supposed to do whatever gives him the least arbitrary power. Just following the budget is less arbitrary than effectively wielding a line-item veto by deciding which items get funded. Then the economy will carry on, and if the GOP sues and actually wins, it will be very clear that they were the ones who blew it up. I doubt they'd be dumb enough to carry through with that.

oneTbrain23 3y ago
Unfortunately that cant work as you like. UK has their Feds too and can print more easily than US but debts require purchase. Saudi and China already stop buying. Liquidity of T-bills have dropped drastically compare what it was 10 years ago. Now Fed can step in and buy those debts pumping printed money directly to US government coffers. This in turn fire up inflation. Already many countries actively aboid using USD. Reduction of using USD in worldwide commerce now hit back American shores. So as long as US governments not reigning the expenditure, Fed showing printing money DIRECTLY, inflation will keep penalising Americans. This time, there are alternatives compare to 70s. People can migrate. Immigrant can stop migrating to USA (Asians now stopped significantly migrating and investing in US in the last 3 years). Anytging Americand needed like Russian uranium and Chinese goods are now sold to American market via blackmarket. This in turn fuel the criminal organization. This is why Americans now facing rampant crimes as the increase in crime couldnt be match by law enforcement. So all this talk of ignoring debt ceiling already happening since a decade ago and the repercussions already in the works. The more you want to ignore the ceiling the more of the above hitting Americans.

0zemp2c 3y ago

its simple - they can push Biden to the brink, and if things break, people blame the President less than 10% of Americans even know who McCarthy is, no one will blame him

Balgair 3y ago
If the US does default, then Biden probably will use the 14th amendment. Unfortunately for the Republicans that are trying to play brinksmanship, that will make Biden look like a hero. A huge economic disaster occurs, doesn't matter who caused it, but then Biden gets to swoop in and solve it with the flick of a pen. Cue victory lap. Sure, the Republicans will try to tie it down and to make it seem like he caused it. Doesn't matter though, because he's the one that solves it. As Rove said, never let a good crisis go to waste.
- ars 3y ago
  > Unfortunately for the Republicans that are trying to play brinksmanship Democrats think that. Republican voters are well aware that the the GOP is not actually going to let the US default. But because Democrats seem unaware of this the GOP is using it as a good time to negotiate with little risk.
  - raverbashing 3y ago
    They should call the bluff of the GOP then

jscipione 3y ago

The 14th Amendment does not authorize the White House to pay debts without the Congress. The debt ceiling debate is not farcical, it is congressional.

ars 3y ago

> The House GOP is arguing we shouldn't pay our bills No they are arguing if we didn't spend so much we wouldn't be in this problem in the first place. The mistake you are making is thinking that there is any chance whatsoever the GOP will actually let the US default on it's debts. There is zero chance of this. This is simply an opportune time to negotiate, that's all. "Wait till the last minute."

thsksbd 3y ago

Last month the GOP passed a House bill increasing the debt ceiling till March 2024 whilst limiting budget cuts to 2022 levels. Seems reasonable, who would argue that the US 2022 - a Democrat controlled budget - was fiscally austere? It also has automatic budget increases. Senate has has a month to reject it, modify it, propose something else. They did nothing.