Monday, May 16, 2011

Just what could Obama do?

David Frum:


Some Republicans suggest that there’s no special need to worry about hitting the debt ceiling: after all the Treasury will still collect much more in revenue than it spends on interest payments. The Treasury can continue to pay bondholders while ceasing to pay other bills.

Do these Republicans understand that even assuming this idea were legally and technically feasible (which it is not), it would amount to handing President Obama recission authority over the entire federal budget?
Under this scheme, if feasible, could the president decide: OK then, I’ll just stop paying Medicaid bills in states led by Republican governors?
It is not in Obama's character to be so petty in his policies, but I would love to see the Republicans squawking if he did it.

This does bring up an interesting question: what authority does Obama have to address the debt limit issue if the GOP continues to play chicken? I recall reading something a few months back that Obama might already have emergency authority that would allow him to effectively exceed the debt limit if he thought it was necessary to prevent a national crisis (which is what a default would be).

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