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EXPLANATORY JOURNALISM: The TerryReport
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News, commentary, opinion on politics, government, books, social trends, American life, travel, cycling, books, other stuff
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The comment below was posted by someone on the NY Times comment forums. If the information is accurate, it represents an apparently well informed person’s ideas of how a potential default could be lessened by presidential action. I have posted my response, also on the Times forum, below this comment.
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There is another option. Pursuant the International Emergency Economic Powers Act, Congress has already given the President the power to pay interest on foreign debt without raising the debt ceiling. Since 50% of U.S. debt is held by foreigners, there should be enough revenue remaining to prioritize and pay the rest of our bills within debt ceiling if Congress refuses to act.
Section 1702 provides that the President may “under such regulations as he may prescribe, by means of instructions, licenses, or otherwise” (a very broad mandate), “regulate” (order) “payments between, by, through, or to any banking institution” (the Treasury or Fed), including “exporting of currency” (payment) “by any person” (the U.S. Treasurer), “or with respect to any property” (Treasury funds and obligations), “subject to the jurisdiction of the United States.”
Section 1701 provides such authority arises in response to “any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States” (Congress's failure to raise the debt ceiling and the resulting default on foreign held debt will destroy the full faith and credit of the US and cause a worldwide financial chaos), “to the national security” (the readiness of the military), “foreign policy” (loss of diplomatic credibility), “economy of the United States” (default could trigger a depression), “if the President declares a national emergency with respect to such threat.” The time to do so is now!
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- Doug Terry
- Maryland, DC Metro area
Your post is terrific and raises very interesting questions.
One would hope that the president and his aides have been looking for every means possible, since the threat of a default has been pending almost from the moment the Republicans obtained a majority in the House of Representatives. There are obviously many steps that could be taken and I can only hope that the method you suggest for paying foreign debts can be employed.
Ever since Obama assumed office and presented a public face as, above all else, a man of calm reason even when dealing with threats, I have been hoping that he would find his "presidential moment" when he could demonstrate to the entire nation his ability to make tough decisions and stand by them. If he were to invoke the laws to which you refer, there would most likely be a move to impeach him in the House, but, if his actions were firmly grounded in law, that effort might fail even in a Republican controlled House, but of course these days no one could be sure of that outcome.
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to go to recent posts, nearly 300 pages of news and comments filed during the first nine months of 2013 and during the critical election year of 2012.
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to go back to prior years (500+ pages) of The TerryReport
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