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July 2011, Week 1

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Thu, 7 Jul 2011 01:54:58 -0400
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Invoke the 14th — and end the debt standoff
  
By Katrina vanden Heuvel, 
Published: July 5

http://www.washingtonpost.com/opinions/invoke-the-14th--and-end-the-debt-standoff/2011/07/01/gHQAUif8yH_story.html?wpisrc=emailtoafriend

On its current course, the United States is four weeks
away from defaulting on its debt for the first time in its
history. If that happens, businesses will fail. Financial
institutions will fail. Home values will decline. Mortgage
rates will skyrocket. Spending and investment will all but
disappear. Social Security checks will stop being mailed.
Everything from military pay to food inspection will be
compromised, if not fully cut off. The millions upon
millions of Americans who are unemployed or underemployed
will be joined by millions more.

Across the world, America's second financial collapse in
three years will drag down already fragile economies in
Europe, Latin America and Asia, potentially creating a
"worldwide depression," as Senate Majority Leader Harry
Reid described it. In short, we would be thrown back deep
into economic turmoil -- only this time with even fewer
tools to crawl our way out.

In theory, this is unthinkable, and it will be remedied by
reasonable political parties making reasonable concessions
across the negotiating table. But Republicans have been
negotiating in bad faith, unwilling to compromise even an
inch on their extremist and absolutist positions. Some are
no longer willing to come to the table at all.

With that backdrop, President Obama may find that there is
only one course left to avoid a global economic calamity:
Invoke Section 4 of the 14th Amendment, which says that
"the validity of the public debt of the United States ...
shall not be questioned." This constitutional option is
one that the president alone may exercise.

If the Aug. 2 deadline arrives and no deal has been made,
Obama could use a plain reading of that text to conclude --
statutory debt ceiling or not -- that he is
constitutionally required to order the Treasury to
continue paying America's bills. In that sense, this is
not just a constitutional option, it is a constitutional
obligation, one even the Tea Party will have trouble
denying.

There are reasons why such a solution is less than ideal.
There ought to be some concern about executive overreach;
the very idea of the president deciding which laws are and
are not constitutional has disturbing ramifications. And
to the extent that the goal of the move is to prevent
market panic, it remains an open question as to whether it
would succeed. But market panic will surely come with the
failure to reach a deal altogether. The consequences of
default are simply too severe -- and too long-lasting -- to
take this option off the table. It may not be ideal as an
elective choice, but as an option of last resort, it is a
necessity.

If Obama does choose to move forward, he will be doing so
on strong legal footing. In Freytag v. Commissioner
(1991), the Supreme Court held that the president has "the
power to veto encroaching laws .

___________________________________________

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