[Rushtalk] Government shutdown and debt ceiling FAQ

Carl Spitzer cwsiv at keepandbeararms.com
Tue Nov 12 10:57:36 MST 2013


-------- Forwarded Message --------
From: Jon Roland <jon.roland at constitution.org> 



Government shutdown and debt ceiling FAQ 


[This blog post is under construction so click on the link for updates.]

There have been a number of Frequently Asked Questions pages posted on
the Net concerning the government "shutdown" and debt ceiling, which
provide commonly conceived "answers", but it seems fitting to provide
some more constitutionally enlightened answers to some of those
questions:

     1. If there is no congressional appropriation, how can the
        government keep spending money on "essential" operations?
        Constitutionally, it can't. There is no constitutional exception
        for "essential" operations. If government complied with the
        Constitution, it would have to shut down all spending and
        proceed entirely using unpaid volunteers, as it did in the
        beginning.
     2. How an some spending be outside the appropriation process?
        Constitutionally it can't. It is done on the rationalization
        that the Constitution does not explicitly forbid setting up
        "independent" agencies that may be "self-funded" from their own
        taxes or fees, or forbid multi-year appropriations for other
        than the Army, but the Constitution doesn't authorize those
        things, either, and one cannot logically infer a power from the
        omission of a prohibition on its exercise. The design
        established by the Constitution requires all revenues go into
        the Treasury, and all disbursements to be made under
        appropriations that may not extend beyond the terms of Congress,
        which are two year periods.
     3. Why can't government workers volunteer? Constitutionally, there
        is no authority to stop them from doing so, although there is a
        19th century criminal statute that forbids it. The statute could
        constitutionally forbid volunteers to use government-owned
        assets, but the only authority to forbid voluntary action would
        be to fire them, and they could then volunteer as non-employees
        using their own resources. Of course, if government prosecutors
        are "furloughed" there would be no one to enforce the statute.
        Somehow, one suspects it is a dead letter.
     4. So who is to blame for the shutdown? The Constitution requires
        agreement by both houses of Congress and the President to
        authorize spending, from one year to the next, and not not
        authorize "permanent" appropriation for anything, so the default
        is to not spend and the fault belongs to those who insist on
        spending over the objections of one of the other components, in
        this case the House of Representatives, which has superior
        authority as the only house that may initiate spending bills.
        The compromise position would be to cut all spending not agreed
        to by all the components.
     5. Why would the government "default" if the debt ceiling is not
        raised? Depends on what you mean by "default". The way most
        economists use that term, it would only be failure to pay
        interest on lawful bond debt, and principal on such debt when it
        comes due, and there is more than enough revenue from taxes to
        pay those things, so from that viewpoint, there is no risk of
        "default" if the debt ceiling is not raised. However, the way
        the Administration and its supporters in Congress are using the
        term, it is any and all obligations or expectations of payment,
        from payment of medical claims on Medicare to vendors of goods
        and services to subsidies and grants to key constituents. That
        is a matter of not wanting to incur the political costs of
        ending patronage.
     6. What would happen if the debt ceiling were not raised? The
        government would have to immediately stop all spending in excess
        of revenues, which would be a reduction of about 30%. That would
        mean ending almost all entitlement spending, on things like
        Medicare, Medicaid, farm subsidies, food stamps, housing
        subsidies, education subsidies, and payments to
        government-funded pension funds. Arguably Social Security
        benefits could continue as long as enough FICA taxes were
        collected, but since those taxes are not keeping up with
        benefits, those benefits would have to be reduced, and continue
        to fall. Advocates of more spending and borrowing make the
        Keynesian argument that a sudden cutoff would be disastrous to
        the economy. There would almost certainly be a shock from any
        sudden change in government spending, and many enterprises that
        have grown to depend on it might go bankrupt, but reduced
        government borrowing would also make more investment funds
        available to other things, like expanding businesses, creating
        jobs, and investing in new technologies, so after a period of
        adjustment, the net effect is likely to be beneficial to the
        economy.

See also:

     1. Proposed amendments, especially on appropriation and borrowing: 
             1. Clarification of appropriation
                No expenditure shall be made, or obligation incurred or
                committed, by or for the government or any activity
                under its supervision, except within appropriations
                enacted by Congress, which shall specify the amount and
                the department or activity it may support, and which
                shall not exceed six years.
             2. Clarification of Article I Section 7
                The word "bills" shall include proposals within bills,
                and any proposal for raising or receiving revenues or
                disbursing funds, including for borrowing or lending,
                shall originate in the House of Representatives, and
                shall specify rates, amounts, objects, and purposes.
             3. Challenges to debt
                No debt by the United States or any department thereof
                shall be incurred or held valid that funds consumption
                by other than military personnel and militia personnel
                in federal service; and any person may challenge the
                validity of any debt, whereupon the government shall
                have 20 days to prove it is authorized by law and not
                for consumption except as provided above, failing which
                the debt shall be deemed null and void. 
     2. Appropriation must cover debt
     3. Debt is a bet
     4. A way around the debt ceiling
     5. So you want to raise the debt ceiling?
     6. Debt-based currency
     7. So what about a balanced budget amendment?
     8. Flaws in the Balanced Budget Amendment

Donate Now!

-- Jon

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