The Return to the Debt Limit Apocolypse Thread

[Admiral Yi]

Joan, you really want the USSC to decide which it likes better, the debt limit legislation or the appropriations/tax legislation?  Not going to happen.

[MadImmortalMan]

The Article I authority exists once the appropriation is made.

No it doesn't. Congress has the power to borrow. Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job, not that there's somehow power conferred on the executive automatically.

[crazy canuck]

The Article I authority exists once the appropriation is made.

Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job...

That is an odd result?  Dont you have a legal doctrine that office holders are performing their roles properly unless there is some evidence to the contrary which would then give rise to on obligation by the exective to carry out the will of the congress.

How does your system work if the President can simply ignore what congress legislates?

[derspiess]

The Article I authority exists once the appropriation is made.

Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job...

That is an odd result?  Dont you have a legal doctrine that office holders are performing their roles properly unless there is some evidence to the contrary which would then give rise to on obligation by the exective to carry out the will of the congress.

How does your system work if the President can simply ignore what congress legislates?

You mean like how he's ignoring his legal obligation to submit a budget proposal before the deadline? 

Of course it'd also be nice for the Senate to pass a budget, but apparently these fiscal fights are just too fun.

[MadImmortalMan]

http://www.scribd.com/doc/121706518/HR325

Raises the debt limit and holds all congressmen salaries in escrow until a budget is passed.

[The Minsky Moment]

No it doesn't. Congress has the power to borrow. Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job, not that there's somehow power conferred on the executive automatically.

Congress has the power to borrow.  It can exercise that power either by: (1) specifying the form of borrowing and tying it to a particular appropriation - i.e. finance this by issuing 10 year bonds or zero coupons or whatver; or (2) it can just direct the Treausury to spend the money and leave it up to the Treasury under its general delegated authority to determine the form of the borrowing. 

The Congress exercises its borrowing power every time it makes an appropriation without specifically allocating funds or providing for sufficient tax revenue.  it doesn't have to specifically say the words borrow to exercise the power.

The alternative is as you point out nonsensical.  It is also unconstitutional.  The Canuck is basically right.  The Executive has a constitutional responsibility to use the means at its disposal to make sure the laws are faithfully executed.  If that means selling t-bills so be it.  The Congress can't use the debt limit as a quasi legislative veto to thwart the Executive's ability to carry out the laws that Congress already passed.

[The Minsky Moment]

Joan, you really want the USSC to decide which it likes better, the debt limit legislation or the appropriations/tax legislation?  Not going to happen.

It's almost always more optimal to resolve these things w/o forcing the constitutional issue.
But if we end up having to play this game every 6 months, I am not so sure. 

[mongers]

QE is macroeconomic doping, and America is Lance Armstrong": Davide Serra of Algebris

Any 'truth' in this ?

[Admiral Yi]

A drop.  Some signs we are interpreting as recovery, such as asset prices, are merely a reflection of incredibly cheap money.

But only a drop.  We still measure "the competition" in real terms, which can't be gamed.  Unless you want to just cook all the macro stats, like Argentina is doing.

[MadImmortalMan]

QE is macroeconomic doping, and America is Lance Armstrong": Davide Serra of Algebris

Any 'truth' in this ?

Doping won Lance seven TdFs. So no from the perspective that doping worked.

[The Minsky Moment]

The analogy is obscure in this context.
Monetary policy can improve economic performance.  It may also have negative side effects if used in excess.  In those senses I suppose the analogy holds.

[mongers]

The analogy is obscure in this context.
Monetary policy can improve economic performance.  It may also have negative side effects if used in excess.  In those senses I suppose the analogy holds.

[MadImmortalMan]

Obama Signs The Debt Ceiling Bill, Officially Ending The Debt-Limit Fight Until At Least August



President Barack Obama signed the "No Budget, No Pay Act of 2013" into law Monday night, the White House said, officially suspending the nation's debt limit through May 18. The bill also suspends pay for members of Congress if their chamber does not pass a budget resolution by April 15.

The Senate had passed the debt ceiling bill last week, and the House passed it the week before. The two chambers passed the bill along different lines. The House saw fairly strong bipartisan support for the bill. But in the Senate, it passed largely on partisan lines. Republican Senators said they voted against it because of a lack of spending cuts that accompanied the debt-limit increase.

The debt-ceiling bill is that it is not technically a clean hike in the nation's debt limit. It's a suspension of the debt ceiling for a certain time period. On May 19, the debt limit will be raised by an amount "necessary to fund commitment incurred by the Federal Government that required payment."

The Bipartisan Policy Center estimates that number will be around $450 billion. The BPC also estimates that the next point the nation will need to raise the debt limit will come in August.

The no budget no pay provision is what Senator Heller ran on last year. He was all over that when he visited our office.

[Phillip V]

Still need to deal with $1.2 trillion sequester by end of this month?