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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]The fundamental problem here is that McCarthy does not have the votes for any deal he cuts with Biden, but he does not seem to recognize that fact.  30-50 of his members are extreme wackos who will vote against anything, and the Rs don't control the Senate (and there are probably 10 Rs in the Senate who are extreme wackos who will vote against anything).  So he's got to cut a deal that will get 50 plus D votes in the House and 30 plus D votes in the Senate.  But he's not offering the Ds anything at all.  He won't reform prescription drug pricing, won't close the carried interest loophole, won't increase taxes on wealthy, and won't cut defense spending.  Negotiation means both sides get something and give up something.  But it's just demands from McCarthy with no give.     [/quote]

Agree with your analysis -

Do you think there is any hope for 14th amendment or other solution to resolve this crisis?[/quote]

The 14th amendment idea seems dumb to me.  Not a lawyer so I don't know what the courts would ultimately say, but I don't really think that matters because the market reaction would very likely be bad because the debt may turn out to be illegal.  That would cause many of the same problems as a default.

If I'm the admin, I'm looking at two options.  First is stopping payments to contractors, hospitals, state governments, and big businesses.  These folks have the ear of republicans and stopping those payments won't immediately have too bad economic outcomes.  Second is trying to find some more "extraordinary measures" that would let me push the X date into the fall past Sept. 30.  That would drive this into the regular budget season where it could be resolved under the normal government shutdown threats, and where Biden will have a strong hand to blame the Rs for the shutdown.[/quote]

Since the 14th Amendment requires our DEBT to be valid, the Treasury should continue to make interest payments on the Treasury debt. But refuse to make any other payments, and let all those private businesses who rely on government funds go to court and argue that their debt is valid too.[/quote]

Those private businesses have contracts and are billing for services rendered. The US cannot just not pay them.[/quote]

WSJ had a good opinion piece a few months ago, delineating the government's obligation to pay creditors from payments for appropriations.

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https://www.wsj.com/articles/default-on-u-s-debt-is-impossible-deficit-treasury-cbo-janet-yellen-supreme-court-constitution-public-debt-clause-federal-reserve-328dafe5?st=9nos0uhsq05zfn6&reflink=desktopwebshare_permalink

[quote]Section 4 of the 14th Amendment is unequivocal on that point: “The validity of the public debt of the United States, authorized by law, . . . shall not be questioned.” This provision was adopted to ensure that the federal debts incurred to fight the Civil War couldn’t be dishonored by a Congress that included members from the former Confederate states.

The Public Debt Clause isn’t limited to Civil War debts. As the Supreme Court held in Perry v. U.S. (1935), it covers all sovereign federal debt, past, present and future. The case resulted from Congress’s decision during the Great Depression to begin paying federal bonds in currency, including those that promised payment in gold. Bondholders brought an action in the Court of Claims demanding payment in currency equal to the current gold value of the notes. The justices concluded that Congress had violated the Public Debt Clause and that its reference to “the validity of the public debt” was broad enough that it “embraces whatever concerns the integrity of the public obligations.”

That means the federal government can’t legally default. The Constitution commands that creditors be paid. If they aren’t, they can sue for relief, and the government will lose and pay up.[/quote][/quote]

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