Pending default.

[Stonepounder]

We have heard much about the pending default and how Obama should respond to the demands of the House Republicans. We've also heard that the government will start shutting down if the debt ceiling is reached and how we will have to start furloughing 'non-essential personnel', like park rangers, passport officials, etc.

I've got a better idea. What is currently about the most 'non-essential' part of government? The House of Representatives. How about Obama announces that in the event of a default the first thing that will be cut will be Representatives salaries, all of their staff salaries, all utilities (water, electricity, etc) to their their offices, and that the Assembly Chamber will be shut down. Tell them if they want to meet, they can ask the RNC for money to hire a hall somewhere, since they have clearly stated that they don't think that we need a government.

The next step would be to identify the Republicans with he largest defense contractors in their districts and announce that all payments to those contractors will immediately be put on hold, likewise all contracts are immediately on hold as well.

I suspect the debt ceiling would suddenly be raised.

[mindwalker_i]

1. I would like to see him lay it out to the American people

Talk about exactly what this means in terms of who doesn't get their SS check, talk about their demands, specifically that regulations of banks especially, but of other industries as well, be gutted. How good Mercury tastes to young babies, and how good it tastes to the pocketbooks of Kocks and Kock-like people.

And of course, mention that it's to keep insurance premiums as high as possible, for people lucky enough to be able to get insurance.

We need some fucking flood lights on this shit.

[jeff47]

4. SS Checks wouldn't be directly affected.

They're funded by the Social Security trust fund, which isn't subject to annual appropriations nor the debt limit.

You should probably replace that with Medicare check.

[Nuclear Unicorn]

2. "announce that all payments to those contractors will immediately be put on hold"

Um, actually that will happen.

[jeff47]

3. You're conflating multiple crises.

The "Government shutting down" would happen if they don't pass a budget or continuing resolution by October 1st.

Hitting the debt limit won't "shut down" the government directly - it will mean the government stops paying its bills.

How about Obama announces that in the event of a default the first thing that will be cut will be Representatives salaries, all of their staff salaries, all utilities (water, electricity, etc) to their their offices, and that the Assembly Chamber will be shut down.

Three problems.

First, the government isn't legally permitted to prioritize its bills.

Second, Congressional salaries can't be altered. They can only be changed when a new congress starts.

Third, defense contractors have spread themselves out quite nicely. Any defense contractors operating in Captain Orange's district will also be operating in many districts represented by a Democrat. Additionally, defense contractor operations in the US are generally concentrated in the cities, which are much more likely to have a democrat representing them. For example, there isn't much being done by defense contractors in Boise. There's a lot being done by defense contractors in Baltimore.

[Stonepounder]

5. Not legally permitted?

If the US cannot meet all of its obligations due to hitting the debt-ceiling and Congress not being able or willing to increase the debt ceiling, then of course it has to decide which bills it will pay and which it will default on. Congress can pass whatever laws it wants to - notice that if Congress refused to raise the debt-ceiling it is effectively refusing to fund obligations that it has already committed to. Thus, it would seem, that all bets are off, and Obama and the Sec Treas would have to make decisions as to which bills it pays. The government is legally required to pay its bills. If they can't, then it seems that someone has to decide which bills it will pay.

I suppose that I should have included a 'sarcasm' tag, but they don't have an 'only half joking' emoticon.

[jeff47]

6. No, we'd pretty much have to stop paying all bills.

if we are to comply with that part of the law.

Far more likely will be just ignoring the debt limit. Congress passed two contradictory laws - Spend $$ on this stuff, and don't borrow more than $$. Can't follow the former without breaking the latter, and vice-versa.

So if it comes down to it, I expect the White House will just ignore the debt limit, and then ask Congress to "clarify" the law so that they are not contradictory. Which is basically what happened in the past when Congress passed contradictory laws.

If for some reason they didn't want to break the debt limit, the Constitution gives the Executive branch tons of power in minting coins. The treasury could mint a $1 Trillion coin, deposit it in the Federal Reserve, and get back to writing checks.

Part of the stupidity of using the debt limit to try and push around Obama is Obama already has tools to neutralize it. There really isn't anything he could do about not passing a budget or CR by October 1st.