Thread: Economics The Debt Ceiling Approacheth
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Old 01-11-2013, 04:42 PM   #85
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Top Senate Dems to White House: If you unilaterally raise debt ceiling, we’ve got your back
Posted by Greg Sargent
on January 11, 2013 at 2:55 pm

In a move that will significantly ratchet up the brinksmanship around the debt ceiling, the four members of the Senate Democratic leadership are privately telling the White House that they will give Obama full support if he opts for a unilateral solution to the debt ceiling crisis, a senior Senate Democratic leadership aide tells me.

The four Democratic leaders — Senators Harry Reid, Chuck Schumer, Dick Durbin and Patty Murray — have privately reached agreement that continued GOP intransigence on the debt ceiling means the White House needs the space to pursue options for raising it that don’t involve Congress, and that the White House needs to know that Dems will support whatever it decides to do.

In a letter to the White House signed by the four leaders that will soon be made public — and was sent over by a source — the Democrats say:

“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension as part of an unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promise and trigger a global economic crisis — without Congressional approval, if necessary.”

That’s key, because it means top Dems will support a unilateral executive resolution to the crisis even in response to a legislative solution passed by House Republicans that they deem unacceptable — such as a bill that contains a debt ceiling hike and only spending cuts.

The top Democrats have not settled on any preference for any particular unilateral action Obama might take. They are making a “balance of power” argument to the White House, indicating that they are fully supportive of the idea that the executive branch has the power to resolve the situation as it sees fit.

Obama’s two leading choices are the 14th amendment option, under which the president claims the power to ignore the debt ceiling, and the “platinum coin” option, under which Treasury mints one and deposits in the Federal Reserve, enabling the country to continue paying its debts.

The Huffington Post’s Ryan Grim recently reported that Harry Reid, in particular, has privately raised the 14th amendment option with the president, and that Reid has not ruled out support for any other unilateral options.

Now the entire Senate Democratic leadership is uniting behind an even sharper message to the White House, the aide tells me. “If the White House concludes any given option is lawful, the Democratic leadership would support it,” the aide says.

The White House has said it doesn’t believe the 14th amendment option is legal, and has refused to engage on the question of whether it sees the coin as a viable option, saying only that there is “no Plan B” and that the onus is on Congress to raise the debt limit.

The aide tells me, however, that top Senate Democrats see the 14th amendment option as far preferable politically to the coin. “Of the available options, the coin, on its face, is politically much worse than the others,” he said. “Whatever the legal arguments for and against it, the imagery will be difficult to combat. What better symbol of out-of-control government spending could you have than a trillion dollar coin?”

In a general sense, the decision by top Dems to signal unified support for a unilateral option, should the White House opt for one, is all about maintaining leverage. The idea is to counter the continued GOP claim that new revenues are off the table by signaling clearly that Dems are prepared to activate a fallback option — meaning that in the end, Republicans are not in control of the battle’s outcome.
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