President Obama has no intention of raising the debt ceiling on his own, according to two of his top economic aides.
With House Speaker John Boehner (R-OH) demanding a conversation with Obama about concessions in order to increase the government’s borrowing authority, and the President unwilling to negotiate with Congress, one possibility floated by pundits was that the White House would simply assert that it has the power to issue more debt.
“There’s nothing in those laws that gives the president the authority to ignore the debt limit,” Jason Furman, chairman of the White House Council of Economic Advisers, said Monday at a breakfast hosted by Politico.
That spells trouble for a country just 10 days away from an Oct. 17 deadline for lifting the debt ceiling. Unless the $16.7 trillion borrowing authority is raised, the government can no longer issue debt to finance its existing obligations and will default – a historic moment full of unknowns that could send global markets into a tailspin.
Gene Sperling, director of the National Economic Council, added at the breakfast that any unilateral action on the debt ceiling would not conform to the Constitution. White House lawyers claim the president lacks the ability under the 14th Amendment to take action on his own, Sperling said. The 14th Amendment says the public debt of the United States “shall not be questioned,” but it gives Congress the power to enforce this provision.
Any move by Obama to increase the borrowing authority without Congress would also spark a series of lawsuits that could go to the Supreme Court – which Furman said is no way to run an economy.
This essentially sets up four options: Boehner blinks and agrees to an increase; Obama backs down and negotiates new spending cuts favored by Republicans; a default occurs; or both sides agree to a short-term extension of a few weeks on the debt ceiling.
Neither Furman nor Sperling objected to the short-term extension. But Boehner, who has said concessions are needed, has members in his caucus who see the possibility of a default as a positive. Even though centuries of human history have shown that defaults wreck entire economies that transform world powers into deadbeats, Rep. Ted Yoho (R-FL) insisted to The Washington Post that it would be a helpful catharsis.
“I think we need to have that moment where we realize [we’re] going broke,” Yoho said. If the debt ceiling isn’t raised, that will sure as heck be a moment. “I think, personally, it would bring stability to the world markets,” since they would be assured that the United States had moved decisively to curb its debt, suggested Yoho.