Friday, May 06, 2011

Obama Turns the Tables

-- Posted by Neil H. Buchanan

The following is an advance copy of a speech to the nation, to be delivered tonight by President Barack Obama, which was obtained by Dorf on Law's crack political espionage team:

"My Fellow Americans:

"As many of you know, the country is about to reach the legal limit on debt that we permit ourselves to borrow. The importance of this matter cannot be overstated. I come to you tonight to explain my plan to deal with the current political standoff over raising the debt limit.

"A President receives plenty of unsolicited advice, including proposed speeches that he might deliver to you, the American people. One such ghost speechwriter suggested last week that I recognize a requirement not to allow the United States to default on its responsibilities, a requirement that -- because it is found in our Constitution -- supersedes the law that created the debt limit. Under that reading of the Constitution, I would only be doing my duty to continue to issue new borrowing, whenever the country's obligations required that we do so.

"There is much to be said for that argument. Ultimately, however, I have decided to take the debt-limit law seriously, and thus to honor the limit that is currently on the books. I do so under certain conditions, which I will explain in a moment.

"First, however, I want to clear up some confusion about the nature of the 'negotiations' over raising the debt limit. In any negotiation, you have at least two sides, each of whom wants something that the other does not want, but they try to reach an agreement that involves acceptable tradeoffs. I get some of what I want, and give you some of what you want. I could, for example, imagine a negotiation in which my political opponents and I agreed to raise the minimum wage (something I want) but also agreed to increase subsidies for oil drilling (something they want). That is the nature of political compromise, and I proudly fulfill my role in such negotiations.

"Somehow, the debate over the debt limit has become twisted. Raising the debt limit is necessary to allow the country to continue to live up to its legal responsibilities, both at home and abroad. This is something that all of America's leaders, and all of its people, should want to do. We honor our word. For reasons that I cannot understand, however, the debt limit debate has been framed as a political negotiation, in which I give my opponents what they want in order to get what I want.

"Well, I do not want to raise the debt limit, any more than anyone else does. I did not get into politics saying, 'You know, I'd like to help the homeless, protect the environment, guarantee a dignified retirement, keep America safe from terrorists, and increase the debt limit.' Increasing the debt limit is a necessary act by which responsible political leaders allow us to honor the commitments that we have made through our binding Constitutional law-making processes. It should not be an opportunity for one side or the other to extract concessions on policy.

"We will reach our debt limit next week. Many have assumed that I will direct the Treasury Department to 'juggle the books' for a few months, to give Congress more time to negotiate a compromise, with Republicans (and a surprising number of Democrats) demanding that I agree to their conditions. I will not do that.

"This book-juggling act, after all, involves not only manipulating the timing of certain payments, but actually selling off government assets to raise money. Because everyone understands that such sales of the people's property would be at fire-sale prices, extending the country's solvency in this way involves deliberately giving away the store, making the country poorer in order to meet a debt limit that is utterly arbitrary. Considering that people who oppose issuing more debt do so in the name of protecting the interests of future generations, I am shocked that anyone would even contemplate having me sell our assets at huge discounts, merely because politicians in Congress have decided that they can use the debt limit to achieve political ends that they cannot achieve through any means other than holding the country, and the world, hostage.

"Reaching the debt limit is a serious matter. Congress has decided, however, that it is no more serious than, say, deciding whether to rename a national park. It is now just a matter of using the debt limit to get what they want.

"Now that I understand Congress's priorities, I am on board. Therefore, I am today directing the Treasury Department to engage in nothing more than business as usual. If Congress fails to increase the debt limit, then the Treasury Department will follow the law and thus fail to meet the obligations to which we have committed ourselves. I will not bail Congress out by juggling the books, and I will not prevent their political gridlock from having its inevitable effect, merely to allow them to make further demands on me.

"My declaration today, however, goes further. I am not merely saying that I will not participate in a rigged game, that I am demanding a 'clean bill' to raise the debt. I am announcing that I now really 'get it.' I now understand that the debt limit is merely another acceptable tool to use for political ends, that the nation's creditworthiness is no more important than any other political goal, and that the country's financial legitimacy can be held hostage to partisan agendas.

"In light of all this, I have decided that I will not sign a debt-limit increase bill unless certain conditions are met. Those conditions are:

"(1) The debt limit law itself must be repealed, and a Constitutional amendment enacted preventing any future debt limit law from being enacted,

"(2) The Bush tax cuts for high-income earners must be repealed immediately, with a return of the estate tax to its 2001 levels,

"(3) A climate change bill, along the lines that the Senate rejected just last year, must be passed next week,

"(4) Full funding for all aspects of the Dodd-Frank Act (including the Consumer Financial Protection Agency), and for all aspects of my signature health-care reform law, must be immediately appropriated,

"(5) All of my pending nominations to the federal courts and executive agencies must be approved immediately,

"(6) Congress must issue a unanimous declaration recognizing that I am a natural-born U.S. citizen, and that anyone who continues to claim otherwise must be put in the stocks,

"(7) The 2012 presidential election must be canceled, and my term in office immediately extended through January 2017.

"I might well think of other demands (probably involving Fox News). If I do, I will communicate them to Congress.

"The ball is now in Congress's court. If they do not want the country to default on its debts, all they have to do is agree to my demands. If they really think that some political goals are more important than the nation's creditworthiness, then I am not going to invent ways to give them time to come up with still more demands, and I will certainly not agree to their demands simply to achieve an outcome that any responsible adult should want.

"We have reached an unexpected point in American politics. What was once beyond the pale is now regularly threatened. My opponents think that they can bully me. To quote one of my predecessors: 'Bring 'em on!'

"Good night, and God bless the United States of America."

6 comments:

egarber said...
This comment has been removed by the author.
egarber said...

I think that first link is broken.

What about the notion that the Fourteenth Amendment makes default unconstitutional?

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

My guess is that there's not much judicially enforceable here, but tea party disregard for constitutional principles on the matter smacks of some pretty good irony. On top of the 14th, can't you at least argue in spirit that default violates the property rights of bond holders?

Neil H. Buchanan said...

I've now fixed the link. The author of the linked piece (Garrett Epps, in The Atlantic) makes precisely the point that egarber makes about the 14th Amd. I agree with that point, and I agree that the courts wouldn't stop Obama. Per my post last week, however, I think that the damage from default threats would still be huge, even if Obama invoked the 14th to avoid an actual default.

egarber said...

So I guess it'll be interesting to watch the 10-year note as this debate gets uglier. So far the market is strong, but that's because the default threats don't have any actual traction.

And I wonder if the ratings agencies will take the threat into account -- would they downgrade us if a default merely looked possible?

michael a. livingston said...

I'm afraid Obama's strategy is to assassinate foreign leaders instead.

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