(2 pm. – promoted by ek hornbeck)
The White House is now saying that Congress must pass a bill by July 22 in order for the government not to default on its debt.
The Obama administration believes congressional leaders must agree to a deficit-reduction deal by July 22 in order to raise the government’s borrowing limit in time to avoid a default in early August, according to Democratic officials with knowledge of the negotiations.
The government needs a week or two to write and pass the necessary legislation and take the steps necessary to avoid missing a payment. “We’re down to the wire,” one official said.
Brain Beutler of Talking Points Memo reports Sen. Charles Schhumer (D-NY), in an telephone interview with reporters, said that while the Constitutional option is worth exploring, he thinks “it needs a little more exploration and study. It’s probably not right to pursue at this point and you wouldn’t want to go ahead and issue the debt and then have the courts reverse it.”
Legal scholars and other Democratic Senators have been taking a very close look at the 14th Amendment clause that forbids Congress from defaulting on US debt.
Republican economist Bruce Bartlett, who believes that the Republicans are playing with “the financial equivalent of nuclear weapons”, argues that Section 4 renders the debt ceiling unconstitutional, and obligates the President to consider the debt ceiling null and void.
If the Congress fails to raise the debt ceiling and the government stops paying its obligations, the first people who should not get paid is Congress.
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