President Obama should consider “any lawful steps,” including action without congressional approval, to raise the federal debt ceiling in order to avoid a repeat of the brinksmanship last seen on the issue in 2011, top Senate Democrats advise.
In a letter to the president dated January 11, the Senate Democratic leadership warns Obama not to fall prey once again to intransigence and obstruction from Republicans, who made a political issue over raising the debt limit which ultimately downgraded the government’s sterling credit rating.
The Democrats’ letter doesn’t mention it explicitly, but it would seem to be tacit approval over a plan to mint a $1 trillion coin to avoid the sort of damaging negotiations with GOP lawmakers over the debt limit which happened in 2011. A clause in an obscure law gives the U.S. Treasury the authority to mint such a coin, which if it did so, the government could use to pay bills and avoid the threat of default which loomed in 2011.
“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension only as part of unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without Congressional approval, if necessary,” the leaders write.
The letter was signed by the top four Senate Democrats: Senate Majority Leader Harry Reid, and Sens. Dick Durbin of Illinois, Chuck Schumer of New York, and Patty Murray of Washington State.
Defaulting on America’s legal financial obligations would undermine the American economy and spread global economic havoc, the Democrats warn.
Senate leaders made clear their willingness to pursue a “balanced approach” to cutting spending and reducing the federal budget deficit, but reiterated their insistence that any approach be a balanced between “smart” cuts and as well as additional taxes from the wealthiest Americans.
“It would be wrong to slash earned benefits for seniors and middle class families, while allowing corporations, millionaires, and billionaires to continue to exploit wasteful tax loopholes. We therefore hope that you will continue to insist that the entire budget be on the table, and that any agreement be fully balanced and fair,” says the letter.