Debt Limit Debate: Cut, Cap, and Balance Bill Did Not Have 2/3 Vote in the House to Begin Const. Amdt Process

I viewed House Speaker John Boehner’s response to President Barack Obama’s speech tonight (7/25/11). Again, Speaker Boehner mentioned the balanced budget amendment. Unfortunately, the House did not satisfy the Constitutional requirement of a 2/3 vote in approval in the House. A “bipartisan” vote (or bare majority) is not enough.

Overall, this stalemate over this debt-limit issue is quite unbecoming and reckless, considering the unknown risks of playing with default fire.

Constitutional Amendment, Article V

Constitutional requirement: 2/3 of 435 (House) (2/3) x 435 = 290
House roll call #606 (on the Cut, Cap, and Balance Act, H.R. 2560) Yeas-234; Nays-190; Abstain-8

Barack Obama and Third Way: U.S. Owners of United States Debt Includes Federal Pension Plans, Social Security, Et Al.

In a previous post, I provided a graph of the total amount of U.S. debt held by the public. It is helpful in these days of debt concerns to know exactly who owns the debt.

MPR711_F24

Not all of the debt is held by people outside of the country; quite a bit is held by U.S. citizens or U.S. entities. For example, contributions to the Civil Service Retirement and Disability Fund are deposited in the Treasury (current income to the United States) and the Treasury provides the Fund with a nonmarketable Treasury security (obligation to repay the Fund in the future).

I’m getting the feeling that the GOP has created a false tempest to fulfill its plan to collapse government spending drastically. Sadly, groups like Third Way aid the GOP plans by fueling the hysteria (with Ivy League words and misleading PowerPoint slides).

14th Amendment and Debt Ceiling: Amendment’s Applicability to the Current Debt Situation Unclear; Congress Has the Power to Enforce the Provisions of the 14th Amendment

The once routine lifting of the debt ceiling has become a quite a battle of wills. Considering that the United States will continue to issue debt (for federal pensions and Social Security and other purposes), I am unsure whether this is a good place to make a high-stakes stand.

Now, to break the impasse, some commentators are suggesting that the 14th Amendment , section 4 can be used by the President to exceed the debt ceiling.As frustrating and upsetting as the debate has been, the political branches (especially Congress) will finally have to set down and do the work they were elected to do, keeping in mind the real power of a Presidential veto.

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.

It’s compelling, but I don’t think it applies to the current debt debacle. It has more applicability to the Civil War era when it was written. In addition, the Congress has the right to enforce the provsions of the 14th Amendment, section 5.

Section 5.
The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.

Also, Congress has the power of the purse, Article I, section 8, and allowing the President to set the debt limit on his own may create a separation-of-powers issue.

Barack Obama and Third Way: Nature of Deficit and Debt is Complicated; GOP Stance for No New Taxes Untenable, Unfair

With the collapse of the debt and deficit talks between President Barack Obama and House Speaker John Boehner, the focus again is getting the debt limit raised. Although there is a strong attempt to equate debt with deficit, the terms have quite different meanings. Boehner and the GOP are trying to develop a package of cuts without any revenues; chart 22 shows the futility of that move. The middle and lower classes must not be made to lose services to maintain the extravagant lifestyles of the wealthy. On another note, given the makeup of the group called “Third Way,” I am not surprised that their Ivy League educated analysts do not clearly explain the true reality of debt and deficit.

MPR711_F22

On the chart numbered 22 (charts 22 and 24 are from the Federal Reserve’s Monetary Policy Report , the revenues (receipts) and spending (expenditures) are reflected by line graphs. The deficit is the gap between the two lines on the far right. In terms of revenues, the contributions to federal pensions by employees and agency employers are counted as current revenue (and debt) (see CSRDF, 5 U.S.C. section 8348(b)); the same is true for Social Security. The difference between the lines also directly contributes to the debt.

The use of federal pensions and Social Security FICA funds as current income questions the legitimacy of any tax cut pledges by the GOP because monies from other groups are used to give money back to the rich while leaving the government without sufficient revenues to satisfy is obligations to repay its debt (chart 24). Also, because of the composition of the revenues, it is unacceptable for the nonwealthy classes to be hit with the numerous service cuts so that the status of the rich (subsidized by the lower classes) can remain unchanged.

MPR711_F24

Balanced Budget Amendment: Text Available for Review at OpenCongress

These days the saying that “the devil is in the details,” is more true than ever.

The text of the balanced budget amendment (H.R. 2560, Cut, Cap, and Balance Act of 2011) is available at the OpenCongress website. Unfortunately, the complex language obscures what the legislation will actually do (except for the balanced budget amendment–an uphill climb).

I’m waiting for the text of the McConnell-Reid legislation.

Barack Obama and Third Way: Press Conference Comment Seems to Have Been Influenced by Third Way; Group Favors Keeping Image Only of Concern and Care for the Nonwealthy

If I needed confirmation that President Barack Obama is tied to the Wall Street-connected think tank Third Way, I would have that confirmation today. Interestingly, in the Third Way publication “The Case for Taking Up Entitlement Reform“, the following are considered “entitlements”–FICA- funded Social Security and Medicare, Medicaid, and federal employee pensions. I found the President’s statement bracing, yet I was not surprised; he is governing as a liberal Republican anyhow.

I do not believe for a second that cutting these programs will allow time to focus on the items that he mentioned. How can you move to cut spending from the lower income classes, and then have the audacity to use that you will be able to add spending with insufficient revenues?  This idea is unwise and fantastical.

A quote at his July 15 press conference appears to have been strongly influenced by a Third Way publication (emphasis for comparision purposes).

And so that’s where I’d have a selling job, Chuck, is trying to sell some of our party that if you are a progressive, you should be concerned about debt and deficit just as much as if you’re a conservative.   And the reason is because if the only thing we’re talking about over the next year, two years, five years, is debt and deficits, then it’s very hard to start talking about how do we make investments in community colleges so that our kids are trained, how do we actually rebuild $2 trillion worth of crumbling infrastructure.

If you care about making investments in our kids and making investments in our infrastructure and making investments in basic research, then you should want our fiscal house in order, so that every time we propose a new initiative somebody doesn’t just throw up their hands and say, “Ah, more big spending, more government.”

It would be very helpful for us to be able to say to the American people, our fiscal house is in order.  And so now the question is what should we be doing to win the future and make ourselves more competitive and create more jobs, and what aspects of what government is doing are a waste and we should eliminate.  And that’s the kind of debate that I’d like to have.

Here’s a quote from a Third Way publication “The Case for Taking Up Entitlement Reform” (compare with bolded words above).

Winning the economic future depends on progressive public investments—in innovation, children’s health, education, pure research, teen pregnancy prevention, space exploration, medical research, infrastructure, school lunches, and the arts and humanities. But left on autopilot, the nation’s budget will be swamped by entitlement and debt obligations that will crowd out everything. Scraps will be left for defense and domestic discretionary spending to fight over, and we know who wins that battle.