Nate Silver thinks prospects for the passage of legislation to lift the debt ceiling in the House of Representatives looks brighter today than Tuesday. Although I don't know how the drama is going to play out, it's hard to imagine that the House's bill will be anything but terrible from a Democrat's point of view. If that happens, the outcome of the crisis depends on Obama's judgment and character.
I know what I would do. If I were president, I would allow default under these regrettable and insanely weird circumstances. With the tea-party Republicans basically functioning as economic terrorists who will stop at nothing to enforce their extremist agenda on the rest of the country, we are in serious trouble. They will push us to default or some other dangerous economic policy sooner or later.
Accepting what is means accepting the ugly reality about our broken House of Representatives. If the Congress gets away with murder this once, our democracy will suffer immeasurable harm. Today they want spending cuts and a ruinous balanced budget Amendment. What if tomorrow they link lifting the debt ceiling to repealing healthcare reform, privatizing Social Security and Medicare, and nuking Iran?
Bill Clinton says he would invoke the 14th Amendment in order to prevent a first-ever default on the debts. Obama has already said he thinks the Constitution does not allow the executive branch to ignore the debt ceiling. He would need to do some serious damage control to take back statements like that, not to mention playing fast and loose with the Constitution.
Moreover, even if Obama invokes the 14th Amendment, the U.S. Supreme Court is at least as likely as not to undo the decision, probably leaving everyone right back tothe present dilemma, except with the president bearing possibly fatal political wounds (if he is not outright impeached by a furious House.)
If I were in Obama's shoes, I would pressure Senator Reid to refuse to pass a horrible bill, leading to a default that will be blamed more on the Republicans than the Democrats. The American public overwhelmingly favors the Democratic "balanced approach," and it may take disaster to wake up enough people to the reality that we have a bunch of reckless extremists in the Congress.
Unfortunately, the country will then start to fall apart (airports shutting down, senior citizens being evicted, military personnel going without pay, mortgage interest rates spiking, etc.) This is a terrible sacrifice that will hurt me as well as you, directly and indirectly.
But what is the choice, really? The Republicans will buckle or they won't in the next few days, leaving Obama with no problem at all (unlikely) or no choice but to invoke the 14th Amendment under political circumstances in which the American public will be solidly behind him.
Debt default would be awful but not catastrophic, and this dilemma may require pain to work through in order to get the Republicans to compromise. That's the sad truth too often about the "American way:" good but under-disciplined and under-informed people do nothing difficult until disaster forces their hand.
Default is virtually inevitable to force the hands of the right-wing extremists, and so in my view it would be better happening now than closer to the election. Allowing default now will be farther from the 2012 elections and allow more time for repairing the forthcoming harm.
The United States cannot afford one of its two political parties to be overrun by an irrational fringe. No country in similar circumstances can be any different. Default could very well be the lesser of two evils if it helps to purge our country of a deeper sickness than an unbalanced budget. It is time to purge the evil of complacency.