Debt Ceiling Thoughts
Pondering the debt ceiling arguments, something occurred to me. If the debt ceiling is not raised by the time that Geithner runs out of smoke, mirrors, and the sorts of minor accounting frauds he's willing to commit, the Obama Administration will be in a bind. You see, the Federal budget is legally binding: if the money Congress directs the Executive Branch to spend is not spent, doing the things that Congress directed it to do, then the Executive Branch is violating the law. (Congress was upset about Nixon not spending money appropriated, so in 1974 they made it illegal for the President to not spend appropriated money.) And yet, if the debt ceiling is not raised, then raising the money to follow Congress' orders on spending the money would also be violating the law.
There will literally be no possibility of the Administration following the law. Any choice they make will violate the law.
This sounds horrible, but it's really empowering. You see, while following the law will be impossible, the choice of which law to break, and how to break it will be wide open. The Obama Administration will be forced to make the sorts of decisions that Congress is supposed to make. Congress will have abdicated its power of setting priorities to the Executive.
So far, public discussion has centered on the assumption that Obama will either do everything or nothing. And, given how many times he's abdicated his leverage in dealing with Congress, that's not an unreasonable assumption. But what happens if he abandons his can't-we-all-get-along attitude?
If he played Chicago-style hardball politics, he'd send Ben and Timmy on tour of the red states with baseball bats and a script that starts out "You've got a nice recovery happening here. It'd be a shame if anything were to ... happen to it." But that's more hardball than I expect Obama to play.
Let's say he just played the role of a policy wonk, who recongized that the debt ceiling fight could be an opportunity. In that case, he'd have the statisticians Treasury working late into the night, every day until August 2nd, analyzing proposals.
What would they be analyzing? Well, the least controversial interpretation of the "public debt" clause to the 14th Amdendment, is that bondholders are first in line for whatever money the Treasury does have. But, if one class of people are shuffled to the front of the line, why not order the entire line by class?
The last time Congress was threatening not to raise the debt ceiling, Newt Gingrich held the position that John Boehner currently holds. Robert Rubin, then the Treasury Secretary, told Gingrich that, if the debt ceiling wasn't raised, then Social Security checks wouldn't go out. Gingrich fold
Given both current politics and their behavior so far, I don't think either Obama or Geithner would choose to cut off Social Security. But that doesn't mean they won't be forced to cut off something. Why not arrange the cuts in such a way as to have minimum impact Obama's priorities, while maximizing Republican harm? Especially if it can be described as impartial?
And here, the possibilities are as vast as the number of things the Federal Government spends money on. Maybe delay disaster relief funds -- after all, most of this year's natural disasters hit "red states." Red states also receive disproportionate amounts of Federal highway funds, water management and subsidized electricity in the rural Plains states, and dozens of other examples. In fact, the map of states that received more Federal spending than they paid in taxes in 2010 is very similar to the map of states that voted Republican in 2010:
Think about it. Do Republicans *really* want to force Obama to choose which Federal funding to cut? Are they *that* confident he won't find ways to cut spending that don't hurt them more than his own interests?
There will literally be no possibility of the Administration following the law. Any choice they make will violate the law.
This sounds horrible, but it's really empowering. You see, while following the law will be impossible, the choice of which law to break, and how to break it will be wide open. The Obama Administration will be forced to make the sorts of decisions that Congress is supposed to make. Congress will have abdicated its power of setting priorities to the Executive.
So far, public discussion has centered on the assumption that Obama will either do everything or nothing. And, given how many times he's abdicated his leverage in dealing with Congress, that's not an unreasonable assumption. But what happens if he abandons his can't-we-all-get-along attitude?
If he played Chicago-style hardball politics, he'd send Ben and Timmy on tour of the red states with baseball bats and a script that starts out "You've got a nice recovery happening here. It'd be a shame if anything were to ... happen to it." But that's more hardball than I expect Obama to play.
Let's say he just played the role of a policy wonk, who recongized that the debt ceiling fight could be an opportunity. In that case, he'd have the statisticians Treasury working late into the night, every day until August 2nd, analyzing proposals.
What would they be analyzing? Well, the least controversial interpretation of the "public debt" clause to the 14th Amdendment, is that bondholders are first in line for whatever money the Treasury does have. But, if one class of people are shuffled to the front of the line, why not order the entire line by class?
The last time Congress was threatening not to raise the debt ceiling, Newt Gingrich held the position that John Boehner currently holds. Robert Rubin, then the Treasury Secretary, told Gingrich that, if the debt ceiling wasn't raised, then Social Security checks wouldn't go out. Gingrich fold
Given both current politics and their behavior so far, I don't think either Obama or Geithner would choose to cut off Social Security. But that doesn't mean they won't be forced to cut off something. Why not arrange the cuts in such a way as to have minimum impact Obama's priorities, while maximizing Republican harm? Especially if it can be described as impartial?
And here, the possibilities are as vast as the number of things the Federal Government spends money on. Maybe delay disaster relief funds -- after all, most of this year's natural disasters hit "red states." Red states also receive disproportionate amounts of Federal highway funds, water management and subsidized electricity in the rural Plains states, and dozens of other examples. In fact, the map of states that received more Federal spending than they paid in taxes in 2010 is very similar to the map of states that voted Republican in 2010:
Think about it. Do Republicans *really* want to force Obama to choose which Federal funding to cut? Are they *that* confident he won't find ways to cut spending that don't hurt them more than his own interests?