Prez:"Boehner debt ceiling budget blackmail? Homey don't play that!" B.S.? Bluster? Bluff? Or Benko gambit?By jollyroger on Mon, 12/10/2012 - 7:17am |
We hear tough talk from Prez (not for the first time...) vowing that any attempts by John Boehner to leverage a fiscal bargaining position by demanding concessions as a quid pro quo for raising the debt limit are non starters.
Indeed, even as he throws down the gauntlet Prez flutters the handkerchief: He requests that in the coming fiscal cliff avoidance waltz, he be granted a solo divertissement "The Debt Ceiling Belongs to Prez".
Leaving aside for the moment the ostensible violation of his own prescription (Is he himself not tying debt ceiling and budget outcomes one to the other?), and the intellectual inconsistency of requesting an authority which some argue he already possesses, what is the resultant strategic position of the parties.
Let's go to the entrails...
Since reliance upon the 14th amendment simply to obviate the debt ceiling issue appears voluntarily surrendered by Prez, what can we infer is the logical outcome of his posture(ing).
Absent the unlikely agreement by the house to perpetuate the McConnell solution, and assuming that some fiscal armistice is concluded before the actual debt limit looms, what is left?
Two methods of achieving Obama's stated goal remain. Both involve "cash flow management".
1. Avoid some spending that would require borrowing.
2. Find the cash flow to support the spending without borrowing.
Prez has the power to actualize either or both of these remedies. Viz,
Re:1,(The LBJ Manuever) As CinC he can defer delivery of (and thus payment for) any weapons systems; he can mothball and consolidate any military bases. (And, He can do so with an eye on the blue/red map and the 2014 election.) He can cite for political cover his constitutional mandate to maintain the faith and credit of the US, and the Repugnant's refusal to give him unilateral authority to raise the debt limit. Thus trammeled, he must use the one category of power granted him by the constitution which requires no congressional input.
Re:2,(The D'Amato Manuever) He can cause to appear in the cash account of the United States of America, as many trillions as he chooses by way of the minting of platinum coins, already authorized by law thanks to then Senator Alphonse D'Amato. Justification, as above. He is obliged to protect the credit of the nation.
This second remedy, finding of late increasing credibility (Mainstreamers like CNBC are already discussing it), would be the least disruptive of any of the three ripostes to a hostage taking Republican party, and have the advantage of avoiding both the "asterisk bonds" problem, and/or the economically contractionary impact of truncating military spending (howevermuch military spending needs to be truncated).
The *D'Amato Manuever, frequently dismissed in the earlier debt limit crisis as over-the-top fanciful, gains credibility when Prez simultaneously petitions for unilateral authority and declares himself unwilling to exercise same absent congressional approval. He is setting himself up to be denied the 14th amendment remedy.
Gaming it out: Boehner and Prez arrive at a fiscal compromise wherein no debt limit authority is granted by congress. Boehner sells it to his troops (as he already promises) by declaring his intention to extract a pound of flesh in a month or two when the limit is reached.
One week later, Geithner quietly walks into the Federal Reserve Building with 5 trillion dollar coins and a deposit slip.
Game, set, match.
*D'Amato inserted the platinum coin provision into a 1996 mint authorization to help out a poker buddy who was a rare coin dealer and needed a new line of inventory...