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Debt Limitapalooza 2023!

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Where we are presently...

McCarthy: No clean debt ceiling raise. No specific cuts because nobody is going to like them. Multiple conflicting promises.
Mod Rs: No discharge petition. No clean raise.
Conservative Rs: No debt raise no mater what. No deal is good enough. We don't care.
Biden: Waiting for McCarthy to actually detail demands.
Treasury: Coin is gimmick but won't say it's illegal (its not) or rule it out.
Fed: On the coin ah we are the treasury's fiscal agent (we don't love it but not going to allow a default if its used).


Either the Rs cave or the coin gets minted are the only two roads I see at this point.
 
K1052 said:
Where we are presently...

McCarthy: No clean debt ceiling raise. No specific cuts because nobody is going to like them. Multiple conflicting promises.
Mod Rs: No discharge petition. No clean raise.
Conservative Rs: No debt raise no mater what. No deal is good enough. We don't care.
Biden: Waiting for McCarthy to actually detail demands.
Treasury: Coin is gimmick but won't say it's illegal (its not) or rule it out.
Fed: On the coin ah we are the treasury's fiscal agent (we don't love it but not going to allow a default if its used).


Either the Rs cave or the coin gets minted are the only two roads I see at this point.
Click to expand...
I think the greatest likelihood (by a smidgen) is the coin gets minted. The Dems, Biden, the Treasury, and the Fed won’t let the country default. The coin has the fig leaf of legality that simply ignoring debt limit doesn’t.

Second would be ignoring the debt limit if the coin doesn’t get minted because again they aren’t going to let a default through.

Last is the GOP allowing a debt limit raise. Because even if McCarthy and the bulk of the GOP house wanted to they are so dysfunctional they’ll screw it up somehow so it won’t pass in time.
 
A question on the coin thing. Does the coin minted have to be of the same magnitude as the debt exceeding the limit or can the Treasury mint a septendecillion dollar coin and kill the debt limit for all time?
 
IronWing said:
A question on the coin thing. Does the coin minted have to be of the same magnitude as the debt exceeding the limit or can the Treasury mint a septendecillion dollar coin and kill the debt limit for all time?
Click to expand...
There is no limit to the denomination of the coin but really the size doesn't matter as once you do it once you're basically saying you'll do it as often as necessary so the debt limit is killed either way.

Biden could also just declare the debt limit unconstitutional, which might be a cleaner way to do it.
 
IronWing said:
A question on the coin thing. Does the coin minted have to be of the same magnitude as the debt exceeding the limit or can the Treasury mint a septendecillion dollar coin and kill the debt limit for all time?
Click to expand...

Not tied. They can mint anything they want. But, it's commonly viewed as a $1T coin.
 
fskimospy said:
There is no limit to the denomination of the coin but really the size doesn't matter as once you do it once you're basically saying you'll do it as often as necessary so the debt limit is killed either way.

Biden could also just declare the debt limit unconstitutional, which might be a cleaner way to do it.
Click to expand...
If the coin is too small, it leaves an opening for the next hostage taker in the White House to not mint a coin.
 
fskimospy said:
Biden could also just declare the debt limit unconstitutional, which might be a cleaner way to do it.
Click to expand...

I think minting the coin is more readily legally defensible and would put conservative judges in a spot they don't want to be in (nuking the world economy).
 
K1052 said:
I think minting the coin is more readily legally defensible and would put conservative judges in a spot they don't want to be in (nuking the world economy).
Click to expand...
I concur. I think if they do that and some judge ends up preventing it then Biden can ahead and declare the debt limit unconstitutional and dare the judicial branch to force worldwide default.
 
I don't know. The problem is that the Constitution directly says that only Congress can decide what debts the US takes on and how they will pay those debts. While Biden could certainly say that Congress approved the debt when they passed the budget, I don't think that anyone is really arguing that.

It is the 'How to pay for it' part that is in contention here. There is no way Biden could say that is unconstitutional. It is clear that only Congress gets to say how we pay for the debt. It does not matter they they approved the debt, they still have to decide how to pay it. When they made the budget they approved the debt, but not how to pay for it. Now they are required to do that part. Biden can say that it is unconstitutional for them to decide to not pay the debt but he has no constitutional powers to compel them to do it, and them failing to do so does not give him (or any other group) the ability to do it for them.

fskimospy said:
There is no limit to the denomination of the coin but really the size doesn't matter as once you do it once you're basically saying you'll do it as often as necessary so the debt limit is killed either way.
Click to expand...

Not exactly true. While it is true that there is no legal limit on the amount of the coin, realistically the Treasury has to offset the coins value in some way. Printing a septendecillion dollar coin would have similar effect as defaulting on the debt as the Treasury would not be able to offset it with reverse qualitative easing. So, while legally the Treasury can print any value platinum bullion coin it wants, in reality it wants to keep the amount as small as possible to avoid default.

Also, the ability to mint the coin is not a constitutional right of the Treasury, it comes from a law, and if that option is used you can bet that Congress is going to amend that law to limit the value of the coin, probably to $50, which would neuter this loophole.

Minting the 1T Coin is probably a one time use, and should be avoided if at all possible. Honestly I'm surprised that Congress has not already closed that loophole.
 
SMOGZINN said:
I don't know. The problem is that the Constitution directly says that only Congress can decide what debts the US takes on and how they will pay those debts. While Biden could certainly say that Congress approved the debt when they passed the budget, I don't think that anyone is really arguing that.

It is the 'How to pay for it' part that is in contention here. There is no way Biden could say that is unconstitutional. It is clear that only Congress gets to say how we pay for the debt. It does not matter they they approved the debt, they still have to decide how to pay it. When they made the budget that did not do that part, now they are required to. Biden can say that it is unconstitutional for them to decide to not pay the debt but he has no constitutional powers to compel them to do it, and them failing to do so does not give him (or any other group) the ability to do it for them.
Click to expand...

The constitutional also directly says the debt of the US cannot be questioned, which a default would certainly do. In addition, it is well established that the president MUST spend the money congress appropriates so it would be unconstitutional not to take out the necessary debts to do so.

His best bet is simply that the debt limit violates the 14th amendment and refuse to follow it.
 
fskimospy said:
The constitutional also directly says the debt of the US cannot be questioned, which a default would certainly do. In addition, it is well established that the president MUST spend the money congress appropriates so it would be unconstitutional not to take out the necessary debts to do so.

His best bet is simply that the debt limit violates the 14th amendment and refuse to follow it.
Click to expand...

As I said, I don't think anyone is in doubt about the fact that we have to pay the debt. But he can not decide how we pay the debt, only Congress can do that. The Debt ceiling bill is about how we pay the debt that has already been authorized. Do we sell stuff (early congresses paid the bills by selling valuables owned by the State), raise taxes, or issue bonds? Biden can't simply take it on himself to pay the debt in whatever manner he sees fit. For example he could not just declare that not paying our bills is unconstitutional and put a 10% tax on all GMO foods to pay for it any more then he can authorize the Treasury to issue bonds to pay for it. Congress must pass a bill either detailing how to pay the debt, or telling the Treasury to figure it out, which is what they do most years.

Biden can declare that it violates the 14th amendment to refuse, but that does not give him the power to pay the bills.
 
SMOGZINN said:
I don't know. The problem is that the Constitution directly says that only Congress can decide what debts the US takes on and how they will pay those debts. While Biden could certainly say that Congress approved the debt when they passed the budget, I don't think that anyone is really arguing that.

It is the 'How to pay for it' part that is in contention here. There is no way Biden could say that is unconstitutional. It is clear that only Congress gets to say how we pay for the debt. It does not matter they they approved the debt, they still have to decide how to pay it. When they made the budget they approved the debt, but not how to pay for it. Now they are required to do that part. Biden can say that it is unconstitutional for them to decide to not pay the debt but he has no constitutional powers to compel them to do it, and them failing to do so does not give him (or any other group) the ability to do it for them.



Not exactly true. While it is true that there is no legal limit on the amount of the coin, realistically the Treasury has to offset the coins value in some way. Printing a septendecillion dollar coin would have similar effect as defaulting on the debt as the Treasury would not be able to offset it with reverse qualitative easing. So, while legally the Treasury can print any value platinum bullion coin it wants, in reality it wants to keep the amount as small as possible to avoid default.

Also, the ability to mint the coin is not a constitutional right of the Treasury, it comes from a law, and if that option is used you can bet that Congress is going to amend that law to limit the value of the coin, probably to $50, which would neuter this loophole.

Minting the 1T Coin is probably a one time use, and should be avoided if at all possible. Honestly I'm surprised that Congress has not already closed that loophole.
Click to expand...
The only way for congress to amend that law is for one party to control 50% of the House, 60% of the Senate and the Presidency. So as of right now there's no way to amend it. (Maybe in a reconciliation bill but it may not meet the rules and would still require a unified House, Senate, and Presidency)

So Congress has technically already provided the means to the executive for them to pay the debt.

If Congress decides to default that's also unconstitutional. Biden declares it such and we have constitutional crisis. The executive wins that fight as long as the FED goes along with it and there's no worldwide default.


The acutal appropriate response is for Congress to pass a debt limit increase and/or remove the debt limit completely. It's dumb. It's dumb that the GOP wants to run around stating they are being fiscally conservative by refusing the pay the "credit card" they ran up the bill on in the first place.
 
SMOGZINN said:
As I said, I don't think anyone is in doubt about the fact that we have to pay the debt. But he can not decide how we pay the debt, only Congress can do that. The Debt ceiling bill is about how we pay the debt that has already been authorized. Do we sell stuff (early congresses paid the bills by selling valuables owned by the State), raise taxes, or issue bonds? Biden can't simply take it on himself to pay the debt in whatever manner he sees fit. For example he could not just declare that not paying our bills is unconstitutional and put a 10% tax on all GMO foods to pay for it any more then he can authorize the Treasury to issue bonds to pay for it. Congress must pass a bill either detailing how to pay the debt, or telling the Treasury to figure it out, which is what they do most years.

Biden can declare that it violates the 14th amendment to refuse, but that does not give him the power to pay the bills.
Click to expand...
This is basically saying that Biden must violate the Constitution (14thA) because to not violate the Constitution (14thA) he would have to violate the Constitution (debt issuance clause). (it would be impossible to service the debt through sales of federal property)

All parts of the Constitution have equal weight and Biden's job is to enforce them all equally. When you have a situation where Biden is violating the Constitution either way then he has freedom of action to decide what the best course of action is. There's a lot of legal scholarship to this effect and while others definitely disagree I think that further strengthens Biden's position. He should simply act and if Congress doesn't like it they can impeach him.
 
fskimospy said:
This is basically saying that Biden must violate the Constitution (14thA) because to not violate the Constitution (14thA) he would have to violate the Constitution (debt issuance clause).
Click to expand...
No one ever said it had to make sense. Large parts of our democracy run on the idea that people will just do what is right most of the time.

(it would be impossible to service the debt through sales of federal property)
Click to expand...
It would be impossible to fully service the debt through sales of federal property, that does not mean it could not be a part of the solution. Not that I am advocating for such a stupid idea, only that it is something Congress could chose to do, and has done in the past.

When you have a situation where Biden is violating the Constitution either way then he has freedom of action to decide what the best course of action is. There's a lot of legal scholarship to this effect and while others definitely disagree I think that further strengthens Biden's position. He should simply act and if Congress doesn't like it they can impeach him.
Click to expand...

So you are saying that the President can unilaterally raise taxes? Or sell Ellis Island?
Or that next time Congress fails to make a budget he just declares his own and ignores Congress wishes?
Then he really would become the tyrant that Republicans claim him to be.
 
SMOGZINN said:
No one ever said it had to make sense. Large parts of our democracy run on the idea that people will just do what is right most of the time.


It would be impossible to fully service the debt through sales of federal property, that does not mean it could not be a part of the solution. Not that I am advocating for such a stupid idea, only that it is something Congress could chose to do, and has done in the past.

So you are saying that the President can unilaterally raise taxes? Or sell Ellis Island?
Or that next time Congress fails to make a budget he just declares his own and ignores Congress wishes?
Then he really would become the tyrant that Republicans claim him to be.
Click to expand...
I am saying when the President is confronted with a situation where he MUST violate the Constitution no matter what action he takes he has the freedom to choose which one of those to do.

This situation only exists because Congress passed laws that mandate he spend $X but then prohibit him from raising the funds to do so so it is the will of Congress that he violate the Constitution in one way or the other. If Congress didn't want that to happen they could have removed/raised the debt ceiling OR required the president to spend less money. They chose neither, so now the president chooses. I mean how could it really be any other way?
 
The Dems only need like what, 5 sane Republicans to vote with them here?

That will be a close call, not sure there are 5 sane ones left in the House right now.

If they vote it down, the Dems have to hammer the point that the Republicans REFUSE to specify spending cuts OVER AND OVER AND OVER
 
MrSquished said:
The Dems only need like what, 5 sane Republicans to vote with them here?

That will be a close call, not sure there are 5 sane ones left in the House right now.

If they vote it down, the Dems have to hammer the point that the Republicans REFUSE to specify spending cuts OVER AND OVER AND OVER
Click to expand...

I agree. The last thing on earth Republicans want is to have the Republican imprimatur stamped firmly in the minds of the public on actual spending cuts. They want to fuck the American people but they sure don't want that known.
 
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