The 3 Myths Obama Uses to Bully on the Debt Ceiling
In a clearly articulated, illuminating piece in Friday’s Wall Street Journal, authors David B. Rivkin and Lee A. Casey convincingly make the case that there are three prevalent myths bandied about by the Obama Administration with regard to the debt ceiling: That failure to raise the debt ceiling will cause a default on the national debt, that the government cannot cut federal entitlement programs, and that the president can unilaterally raise the debt ceiling without the approval of Congress.
Those who scream that failure to raise the debt ceiling will cause our credit rating to plummet ignore the fact that Section 4 of the 14th Amendment provides that “the validity of the public debt of the United States, authorized by law . . . shall not be questioned.” What this means is that any debts incurred by the government must be paid off; creditors will not be fleeced, and contrary to the hysteria that there is not enough money to pay off these debts, the government’s incoming tax revenue, which amounts to $200 billion per month, is enough to do the job. If the government refused to do so, creditors could get a money judgment from the Court of Federal Claims. Thus credit agencies should have no doubt that the United States will pay off its creditors.
These debts do not include federal entitlement programs such as Medicare and Social Security. Even though the Obama Administration keeps blustering that the debt ceiling must be raised, federal entitlements programs are not considered part of the “public debt” but rather obligations. In fact, the original wording of Section 4 was changed before it was enacted and ratified specifically to replace the word “obligations” with “debts.” This means that Congress is free to cut entitlements any time it wishes to and is not obligated to borrow money to pay off “obligations.”