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January 13, 2013 1:31 PM Tears for a Coin

By Adele Stan

That splat, splat, splat you hear is the sound of a thousand tears hitting the surface of lattes in the coffee dens frequented by Washington, D.C., liberals upon hearing the news that the Administration is ruling out the minting of a $1 trillion coin to prevent a stalemate on allowing the federal government to borrow enough money to service the nation’s debt.

And congressional Democrats are no doubt crestfallen to learn that the president has no intention of claiming the constitutional prerogative of the 14th Amendment to raise the debt ceiling on his own, as both Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi implied he should do in a joint letter delivered on Friday.

As reported by the Washington Post’s Rosalind Helderman:

In a joint letter that served as a warning to congressional Republicans, Senate Majority Leader Harry M. Reid (D-Nev.) and his leadership team encouraged Obama to “take any lawful steps” to avoid default — “without Congressional approval, if necessary.”

(Politico has the letter, here.)

The White House wasn’t biting. From Annie Lowrey’s NYT report:

“There are only two options to deal with the debt limit: Congress can pay its bills, or it can fail to act and put the nation into default,” Jay Carney, the White House press secretary, said in a statement. “Congress needs to do its job.”

This would seem to lend credence to the theory about which Brother Kilgore wrote earlier this week: that the White House expects Republican leaders, presumably chastened by public opinion, not to allow the U.S. to default on its debt. Of course, that opinion piece by AEI’s James Capretta, referenced by Kilgore and New York magazine’s Jonathan Chait, seemed to signal an avenue of strategic retreat, as Kilgore described it, for the G.O.P. The retreat would involve a form of water torture, with no grand agreement, but rather monthly extensions of the debt limit. As Kilgore describes the plan:

Capretta is explicitly arguing against any agreement, and seems to think the short-term debt limit extensions are a way for GOPers to signal their grudging willingness to discharge the country’s obligations without conceding they are legitimate.

Add to that the big, public taking-them-all-to-school Washington Post piece by Frank Luntz that we mentioned earlier — the one that explicitly instructs Republican leaders not to use the language of hostage-shooting in debt ceiling messaging, and you get where the White House might be taking its signals from.

Even former House Speaker Newt Gingrich, speaking last week on Meet the Press, urged G.O.P. leaders not to mess with the debt ceiling, stating his preference for using a showdown on a continuing resolution — the means by which Congress appropriates money to government operations in the absence of a legislated budget. Luntz, however, uses his piece, ostensibly about the language the G.O.P. should use on these issues, to caution against a government shutdown.

“Americans don’t want a government shutdown — for any reason,” Luntz writes.

Absent the drama of the minting of a giant coin or the invocation of a constitutional crisis, the battle for the financing of the debt becomes, well, yet one more tale of obstruction and the impenetrable world of finance.

How sad for the Washington press corps.

Comments

  • DRF on January 13, 2013 2:23 PM:

    Short-term increases in the debt ceiling simply draws out the torture and the negative impact on the Republican Party's favorability ratings. If they are going to back down on holding the debt ceiling hostage, I would think that they will agree to a fix that is intended to last for at least 2 years. The pressure is starting to build on them to not use this tactic. They can always shift into using the budget process as their hostage.

    I believe that Obama decided not to adopt either of the possible clever solutions that would have avoided Congress primarily because neither appears to be legal. Of course, it helps that this decision keeps the Republicans on the hook.

  • c u n d gulag on January 13, 2013 2:29 PM:

    I think that after the last Debt Ceiling charade, and the ensuing downgrade of the countries credit rating, that Obama's hoping that the money people behind the Republican Party will put enough pressure on their members in Congress, and that, if not before, then before the deadline, they'll all fall in line and concede.

    Now, I'll grant you that those same 67 Teabagging morons who refused to vote for Sandy relief will probably stay firm and not fall in line, but I'm not sure how many of the rest of the Republicans will decide to join those feckin' idjits on the outside - and, maybe there might be enough to get in line to avoid any crisis:
    If, if, there was any real leadership left.

    The main problem is, who would they fall in line behind?

    Boehner, it won't be.
    Cantor, it won't be - he's the leader of the Krazy Keystone Kop Kongress.
    And, neither will it be Ryan. He's got his eyes on the ultimate prize - the Presidency.
    And McConnell can't do it from the Senate - he's afraid of a primary challenge in '14.

    THAT, at least as I see it, may be the biggest problem with not going with the 'coin' option, or 14th Amendment!

    If Boehner had any credibility left, despite the "Plan B' debacle, then he might be the one.
    But, he has none.
    McConnell might have been, if he'd just been reelected.

    But now, there's nobody.

    This is a steerable ship.
    Not particularly wanting to come to port at all, but not completely unwilling, or incapable, either - it's looking for a Captain capable enough to get them where they want to go to avoid blame, with the minimum amount of PR damage to their Conservative bona fides.

    But, this may be what causes another credit rating downturn.

    If I was President Obama, I'd be willing to take the risk.

    In the time remaining, he needs to keep pressing that, what the Republicans in Congress don't want to do, is pay for what they have already approved in their legislation.

    If they want to be the "Daddy Party," and, "The Party of Adults," he needs to turn that whole BS 'Family Budget' argument against the Republicans, and spend every day reminding the Congress, and the voters, that, real "Daddies," and real "Adults," pay their feckin' bills!
    And that THAT'S, what this is ALL about.

    I'm just not sure that President Obama and the Democrats are capable of framing this that way.

    Oh, what I wouldn't give, for better Democratic 'messaging!!!'

    But, it appears that Frank Luntz has the same compaint about the Republicans.

    Hmm...
    THIS, may be something new!

  • shivas on January 13, 2013 2:41 PM:

    If I was Potus the first thing I would do if they shut down the government would be to stop paying lawmakers and their staffs. This is a significant amount, about $1.5 million annually per representative. Since they voted to shut down the government, they are no longer needed. There is no point in legislating when there is no money to pay for the legislation.

    Also, it allows congress critters to show solidarity with the other government workers who are going to be laid off. How could they possibly object? Most of them will continue to receive their payments from the Koch brothers, so they shouldn't starve.

  • Josef K on January 13, 2013 2:47 PM:

    Sarcasm aside, what happens if Boehner proves incapable of bringing his end of the caucus to the table before the deadline hits?

    Okay, so the Republicans take a PR hit. When has that stopped them before?

  • Gandalf on January 13, 2013 2:50 PM:

    This is a classic example of political brilliance. There's no wins in the debt ceiling showdown for the republicans. If they don't extend it they cause an economic disaster. if they do extend it they give the finger to their radiacl supporters.

  • SadOldVet on January 13, 2013 2:55 PM:

    I, among many, am far less sanguine about the prospects of the teabagging repukes giving a sh!t if they shut down the government and cause massive global economic problems. I, among many, am far more worried about The Obomination continuing his history as The Capitulator In Chief and continuing to provide the repukes with more and more reasons to continue their hostage taking.

  • jjm on January 13, 2013 2:56 PM:

    @shivas on January 13, 2013 2:41 PM said:

    "If I was Potus the first thing I would do if they shut down the government would be to stop paying lawmakers and their staffs"

    Especially since they have not been enacting legislation at anything like a normal rate for the past two years.

  • gab on January 13, 2013 3:36 PM:

    IMO, this signals that Obama wants to hold the Republicans' feet to the fire.

    Some argue that the tea party side of party doesn't care about bad PR, but pushing the government into default, or what is more likely, some kind of entitlement payment delay would be a PR nightmare and peel off significant support either among the big money side of the Republican Party or the old, white retiree side.

  • biggerbox on January 13, 2013 4:45 PM:

    I get that the White House sees this as being tough, and when they refuse to "negotiate" with the House GOP, it'll all be down to the GOP to raise the debt ceiling or else. But the GOP doesn't care. They'll go into default and think it's a good thing.

    I don't understand the long-term plan here.

  • david1234 on January 13, 2013 4:50 PM:

    I think the Republicans will back down if Obama holds firm. They need debt limit increase as much as everyone else does. But if they do not back down, I wonder what Obama will do when McConnell and Boehner are begging him to mint the coin.

  • James Conner on January 13, 2013 5:11 PM:

    The coin was and is legal. But the President and his political and economic advisors thought it was disreputable and an end run around standard procedure and worst of all, not bipartisan and thus blasphemy to the god they worship most: compromise at any cost.

    That mindset leave them blind to the first rule of dealing with terrorists: never give up your weapons until the hostages have been rescued. Unilateral disarmament is just another method of suicide.

  • Doug on January 13, 2013 7:30 PM:

    All Boehner needs is to get a majority of his caucus to agree to bring the legislation to the floor and then let as many yahoos vote against as wish to. As long as it's a clean bill, there are enough Democrats to get it passed.

  • square1 on January 13, 2013 7:53 PM:

    Shorter Obama: "In the event that the GOP fails to raise the debt ceiling, I will willingly choose to avoid utilizing a completely legal, if obscure, executive tool and, instead violate my oath of office by refusing to spend money on innumerable goods and services that I would otherwise be statutorily bound to pay be for."

    I strongly suspect that the real reason that the platinum option was rejected by the administration was that (a) they don't want to advertise that the Treasury Dept already has significant authority to control the money supply and, if exercised more aggressively, might get people to question the need for an independent Fed and (b) they don't want to remind the public that it is possible to fund the treasury other than by taxation or selling bonds.

  • OKDem on January 14, 2013 2:05 AM:

    Obama can avoid the issue of not spending appropriated funds by issuing script, IOUs to pay a portion of expenditures. To make a point most if the script might be given to those who are threatened by the sequester, illustrating exactly what is hidden in that debacle.
    Most people have no idea what is being cut. Look at the ignorance that polls repeatedly show. Joe & Jane Six Pack think foreign aid and PBS eat up half the budget.

  • MuddyLee on January 14, 2013 8:43 AM:

    I think LBJ (or Nixon) would call in the House members who oppose increasing the debt ceiling and tell them that that severe spending cuts will be made - IN THEIR CONGRESSIONAL DISTRICTS - in an effort to solve "the problem". Then in order to increase tax revenues, the IRS will double or triple taxpayer audits - in their districts. And no more military bands, aircraft flyovers, and a hiring freeze of civilians by the military - in their districts.

  • Mark Nelson on January 14, 2013 8:47 AM:

    Why not be direct. Mint a commemorative "Reduce the National Debt" $10 coin. Have a national campaign to encourage everyone who cares, do do their share and buy the coins.

  • low-tech cyclist on January 14, 2013 2:20 PM:

    This is a classic example of political brilliance. There's no wins in the debt ceiling showdown for the republicans. If they don't extend it they cause an economic disaster. if they do extend it they give the finger to their radiacl supporters.

    Gandalf - I guess it depends on what's important to you. If the object is to make sure the GOP takes it on the chin, this is great.

    If the object is to do what's right by ordinary Americans, "if they don't extend it they cause an economic disaster" is a pretty terrible outcome.

    I think the idea of being a party to doing massive hurt to the citizenry in order to win a political victory over the GOP, so that eventually we'll have a freer hand to do things for the people's benefit, is an abomination.

    I reject all forms of "make things worse in order to make them better"-ism.