The 14th Amendment Charade—or is it?

The holders of the United States national debt...
Who Holds the US National Debt via Wikipedia

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”

As Democrats and Republicans posture about what to do about the US debt ceiling cap expected to be reached August 2, 2011, a new “theory” floated in the media is provoking more debate that the issue on the table.  That theory is that we really don’t need Congressional action to increase the debt ceiling since the 14th Amendment says the public debt “shall not be questioned” therefore the President acting alone can order the Treasury to keep on spending.

What?!#

Since the Republicans see the debt ceiling as the Washington DC version of crossing the Rubicon over deficit spending and the nation’s credit rating, this theory is causing outrage.  The Democrats are lobbing smoke bombs at Republicans threatening a Constitutional crisis if they don’t get their way.  Only this is not just Congressional Democrats doing the talking it is President Obama tweeting for the media and letting his Administration leak stories about this 14th Amendment end-run.

Meanwhile, both sides are, publicly at least, diverted from solving the problem while they score points to weaken the other side.  We hope, of course, that behind the scenes real discussion is going on about a compromise that serves the national interest.  But we have been tricked before by partisan bickering.

But there is something constitutionally scarier than maxing out our national credit card and facing the dreaded rate penalty consequences.  What is more scary is that our elected officials including our President are so cavalier in twisting and abusing the plain language of the US Constitution to play gotcha in a political brinksmanship ahead of the election. This is something we expect— from President Hugo Chavez or the Russian Duma.

Let’s hope that all this posturing is the lead-up to a compromise that protects the national credit rating, allows paying the national bills on time at reasonable interest rates, and reins in spending enough to change the slope of the deficit curve.  That would be progress.

Beyond that a deal that includes closing tax code loopholes and reducing both the gaming and cost of a tax system so larded with special interest favors that it results in more than 40% of Americans at the lower end of the income scale and many of our largest corporations at the upper end paying nothing while the rest of us get hit with the alternative minimum tax (AMT) GOTCHA to make up the difference.

But let’s face it, the reason our tax code is in such a mess is that ‘messing with the tax code’ is the best way Congress has of accumulating campaign contributions from those seeking advantage or those seeking to avoid tax pain. And the louder the controversy the more money is pouring into Congressional and political party coffers on both sides of the aisle.

The class warfare language and soak the rich evasion are gimmicks used by both sides to keep their base energized, but for the rest of America it just does not cut it anymore.  While we do NOT believe raising taxes is this weak economy makes any sense at all, we recognize the tax codes offers a target rich opportunity to close loopholes and simplify the tax process, enabling companies to bring profits home and spend them here without having much of it confiscated by a corporate tax system that is no longer serving our strategic interests.

For the Democrats this 14th Amendment charade risks turning a lot more Americans into TEA party movement members.  For Republicans, there is a fine line between sticking to your principles about not raising taxes and recognizing that a broken tax system offers opportunities to raise revenue while simultaneously simplifying the tax code, broadening the base of actual taxpayers, and encouraging repatriation of capital and profits to be spent at home thus raising tax revenues—don’t let the perfect be the enemy of the good.

The American public sees what is happening and we do not like it.  We have reached our ‘Network moment’—you remember the line:

“We’re mad as hell and we’re not going to take it anymore!”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s