Pelosi: Use 14th Amendment to Stop Debt Limit Showdown

[swag]

http://news.firedoglake.com/2012/06/20/pelosi-use-14th-amendment-to-stop-debt-limit-showdown/

David Dayen

House Minority Leader Nancy Pelosi, in a meeting with journalists today, announced her support for using the 14th Amendment solution to surmount the debt limit.

During last year’s debt limit debate, many commentators observed that the 14th amendment comes in conflict with the notion of a debt limit, as it says, “The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” Ultimately, President Obama said that his lawyers informed him that “was not a winning argument.” But months before a new debt limit showdown, Pelosi is coming out pretty strongly in favor of using the so-called “Constitutional option.”

[i}She at first referred to this possibility obliquely while making a larger point about the lack of cooperative spirit between the Republican Party and the Obama administration, but clarified her stance in response to further questions saying “I would like to see the constitution used to protect the country’s full faith and credit.” She didn’t offer a legal argument in favor of the position, but argued on policy grounds that “you cannot put the country through the uncertainty” again, noting that America’s sovereign debt was downgraded by ratings agencies in the wake of the standoff even though it was successful resolved.

“This isn’t just about credit ratings,” the said, “it’s about the dynamism of our economy.”

This is certainly the first public expression of Pelosi’s support for this maneuver, although House Democrats claimed she supported it previously. One clear thing this does, if it becomes consensus opinion in the party, is that it removes a bit of leverage from Republicans. They used the debt limit last time to wring out long-term spending changes worth trillions of dollars. And they have been planning to use it again, paired with the “fiscal slope” of tax and spending changes set for the end of the year. If they don’t have the debt limit to hang over the heads of the opposition, suddenly the leverage switches to Democrats, because by doing nothing, the Bush tax cuts will expire and the defense spending cuts will trigger.

[Scootaloo]

1. I await the "Constitutional literalists" telling us how "times change"

[Igel]

3. No need.

This was flogged to death last year.

The categories are public debt and things like pensions.

There's more than enough current revenue to keep current on those things provided that you look ahead a few weeks and plan for them.

Of course, there are two problems. The first is that if you do that pretty much all other spending--not Constitutionally protected--has to be eliminated.

The second is that you can rig things to make sure this provision applies--basically you can trigger a minor Constitutional crisis--by making sure to pay various bills so that when time comes for debt and SS payments there's no cash left. Some companies do this before declaring bankruptcy: They pay out bonuses or golden parachute payments and then say, "Oops, out of cash!" We don't like it then. I don't see a reason to like the very same practice I disapprove of when "my kind" do it.

The threat of default last year was precisely because of problem #2. The president authorized various payments, leaving nothing in the kitty for Social Security.

[OffWithTheirHeads]

2. I'll believe it when I see it.

[JDPriestly]

4. If they stop paying the private contractors around the world and in the U.S.

it might be a good thing.

Obama, in my opinion, is no friend of Social Security.

He has done nothing to make me think that he is. And that really offends me. We have no choice but to work for his election, but really . . . . His stance on Social Security is like his stance on unions -- some nice words but that is all you get. He needs to do a lot better on issues having to do with seniors.

So far, we do not know precisely how the health insurance reform bill will cut Medicare costs, what costs it will cut and who will pay for those cuts. But we have been told that it cuts the cost of Medicare in some mysterious way.

[pa28]

5. That was Bill Clinton's advice as well and I believe it was good advice.

Getting reversed by the Supreme Court would be much easier to take than Eric Cantor calling your bluff.