Tuesday, October 08, 2013

Wow I Actually Agree with the "Reid Gambit" to Raise the Debt Ceiling

It takes rare times for me to agree with anything that Harry Reid proposes but this "gambit" might just save the world economy.

Today, Senate Majority Leader Harry Reid made his move. He plans to introduce legislation to increase the debt limit, and dare Republicans to kill it with a filibuster.

But it won’t be a straightforward dollar increase or a time-limited borrowing authority extension. Reid will likely use a mechanism to allow the president to increase the debt limit on his own, subject to a veto-able resolution of disapproval by the Congress. In other words, the only way the debt limit won’t increase is if two-thirds of both the House and Senate feel it must be pulled back into the realm of legislative horsetrading — something that will never happen absent bipartisan agreement.

In other words I assume Obama will invoke the 14th Amendment:

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.

That "shall not be questioned" part is what Obama will invoke. Then Reid brings a resolution of disapproval that needs a 2/3 margin of the Senate to overcome. I bet you couldn't get 2/3 of the Senate to tell you if the sky was blue let alone censure Obama. Hell, I would even overlook some Lincoln style dirty tricks to get this thing passed.

If this gambit succeeds it means the debt ceiling would get raised and the entire mechanism will be found unconstitutional. Next year the Supreme Court would have to weight in but the economy is safe until then. Sounds like a good idea to me. Get it done before the market drops any further.

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