OK, so I get this letter explaining why I can’t get my money now, but telling me that once the law is changed, I’ll get it later.
I regard that as a notification and nothing more, so I chuck it in the trash, and await further developments. Some enterprising soul rescues it from my trashcan, and when Congress passes the law you suggest, the money is theirs rather than mine.
IOW, the government has unilaterally reneged on their commitment to me, and handed my money to someone else.
Now if the letter clearly states that I need to hang onto the letter in order to be able to get my money later, that would solve that problem, but IMHO that would also be exceeding the Executive’s authority. Both because they’ve got no authority to unilaterally place such a restriction on my receiving the monies due me under current law, and because by doing so, they are in effect creating an informal currency.
I don’t know what the government would expect. Since it is not legal tender, the banks are free to compete to attract deposits of the scrip. If they charge a discount, it is not an interest free loan, is it? If they choose not to for favored customers, that is their right. Let the market decide.
No one is saying this is a great idea, but it is a better one than government employees and pensioners getting nothing due to the intransigence of a minority.
If the magic beans were certain to be redeemable in cash, perhaps. Disney issues Disney dollars, after all. They can’t, but if they were sure that the beans could be converted into money, it wouldn’t be immoral at all.
In my understanding, when Congress passes a spending bill, it is not a suggestion, it has the force of law. Which makes sense - you would not want the President to refuse to spend money for, pollution enforcement, say, or for the construction of a new class of fighters.
It’s too bad - one good solution would be for him to unilaterally stop all government spending inside the districts of those against raising the debt ceiling. But I don’t think that this is legal.
So, the debt ceiling deniers - to coin a phrase - are self contradictory. They are in a group who voted to force the government to spend a certain amount and yet make it impossible to do so. Now if their heads would explode like a computer on Star Trek, the problem would also be solved. But they seem to have no problem believing contradictory things.
I’m confused. Can you expand on this point? Do you think Obama should avoid this “horrendously immoral” act, and if so what should he do instead? Mint the platinum coin? Stop paying government workers altogether? Roll down his pants to let GOP have their way, requesting only that they use vaseline?
The problem with your claim is that it’s difficult to reconcile the “it doesn’t have any legal force” with “an acknowledgement that the 2013 budget required the Feds to pay Simplicio $X dollars, and they intend to get to doing that as soon as Congress gets its head out of its ass.”
In other words, typically an acknowledgement of a debt has some legal effect.
Similarly, the statement “Obama doesn’t need a Constitutional Authority to write stuff down on a piece of paper,” is flawed. It’s true he doesn’t need constitutional authority to send Harry Reid a birthday card, but that card carries no particular executive authority with it. The IOU, on the other hand, while also ‘stuff written on paper,’ is a document that says, “I owe you.”
This is my thought. If it isn’t a debt because we are pulling the old *wink *wink “We aren’t really promising to pay” then it is a default on the debt.
Take Simplicio’s $50 he was owed. If he is paid with $50 in non-guaranteed scrip that is a government default its $50 debt owed. He was owed $50 on a certain date, not a piece of paper saying he may possibly get $50 in the future. That’s a default.
If not, can I pay my electric bill this month with my personal scrip saying that I acknowledge that I owe them money, and they may or may not get it at some indeterminate time in the future?
Why? If I legally owe you money, then I legally owe you money. If I then send you a letter saying “I owe you money”, the situation hasn’t changed at all. The federal gov’t owes people SS checks because of the SS act, it has nothing to do with whether or not Obama sends us all a letter saying that the gov’t owes us SS checks.
Sure, but it doesn’t create a debt. The gov’t owes me money due to the budget passed by Congress. Obama saying this is so doesn’t effect anything (or put the other way, if Obama sent everyone a letter saying the gov’t isn’t paying out SS, because he doesn’t feel like it, would you say that that’s enough to abolish SS. Obviously not, SS debt exists totally separate from the whims of the executive, whether he puts those whims in a birthday card or a letter to SS recipients). Just saying what the current federal law is isn’t an exercise of “executive authority”.
Let me ask a question which I’m pretty sure I already know the answer to.
Congress passes a law that blue-beaked sandpipers are now a protected species. A few years later they pass a law that takes all sandpipers off the protected species list. Does Congress need to specifically rescind the earlier law?
The later law contradicts the earlier law so without a rescintion is the blue-beaked sandpiper a protected species? I would say no, that if you pass a law that contradicts an earlier law, the points of conflict default to the later law. So if Congress made a law saying we can only borrow $X but pass a budget that goes over the limit, wouldn’t that that implicitly rescind the debt ceiling law?
Another idea, is it possible that the debt ceiling law itself is unconstitutional? I can think of three arguments that can be used.
Infringes on the executive branch powers of being able to pay the bills.
Conflicts with the “public debt” clause.
Infringing on their own enumerated right re: tax and spend clause i.e. if you want to limit the budget of your own session that’s ok but you cannot bind future sessions from taxing and spending as they see fit.
About 40 years ago, President Nixon decided he was going to pick and choose which Congressional appropriations he was going to carry out, and which ones he wasn’t. IIRC, the Supreme Court told him that that wasn’t legal - that if Congress appropriated the money, and if he hadn’t vetoed the spending bill, he had to spend the money they had in effect told him to spend.
No. IIRC, you’re right that if two laws are in conflict, the earlier law only continues to be in effect to the extent that it doesn’t contradict the more recent law.
IANAL, so I’ll yield to our legal eagles if one of them should jump in.
Good question. I’ll leave that one to the lawyers. I’ll note that the continuing resolution funding the government through March 27 is more recent than the debt ceiling bill.
But if they tell him to spend $100 on widgets, but also have failed to raise enough taxes or authorize borrowing to give him that $100, he is put in an impossible position. He literally cannot spend $100 that he does not have. And he can’t go get more money without authorization from Congress.
And this argument that a President could unilaterally raise money by borrowing more is unfounded. Why couldn’t he equally raise taxes on his own initiative?
Same way with Simplicio’s idea that the later law authorizing spending implicitly repeals the debt limit law. Why does that have to be? Why couldn’t an argument be made that the marginal income tax rates just went to 60%?
Neither makes any sense. For any servant to spend money for you, he must have two things:
I didn’t say that. I said the later law would probably be passed with an extension of the debt ceiling. The extension would have to be explicit.
Congress hasn’t given the President “authorization to spend the money”, they’ve passed a law saying he must spend the money. Budgets passed by Congress aren’t suggestions. If the debt ceiling isn’t extended (and assuming Obama doesn’t do something exotic like mint a platinum coin) there really isn’t any way for him not to break the law.
(issuing scrip doesn’t get around this problem. As I said before, it has no legal force, so he’ll still be disobeying Congresses budget instructions whether he issues it or not)
No, it isn’t. But if the government issues scrip that can only be redeemed at a discount, then the government is reneging on part of its debt, and that is against the Constitution.
If the government owes me $X, and offers me $X in legal tender, all is well. If the government offers to settle the debt for scrip worth less than $X, then either I agree to settle the debt for less than the full amount and accept the scrip, or I refuse and the government still owes me $X, in full.
Like I said, it seems the hope is that Obama can find a whole bunch of people who don’t understand the concept of the time value of money.
[QUOTE=Simpicio]
Sure, but it doesn’t create a debt. The gov’t owes me money due to the budget passed by Congress. Obama saying this is so doesn’t effect anything
[/QUOTE]
IOW, best case scenario is that this achieves nothing.
You’d agree to nothing by taking the scrip. The gov’t would only owe you money* because of the 2013 budget. That would be the case if you take the scrip or don’t take it or sell it to a bank or throw it in the trash or whatever.
But your only owed that money because of budget legislation. If you throw out the scrip, and later legislation is passed that changes the budget and voids what you were owed and instead just gives that money to everyone that’s holding scrip, you would’ve screwed yourself out of your money. The gov’t only owes SS recipients what current law says they do. There’s nothing that says they can’t change the law and not give people that money.
*(obviously, this only works for people who are owed due to the federal budget. People who have contracts for payment (as I imagine is the case for unionized federal employees, but isn’t the case for SS recepents, most medicaid docs, military personal, etc.) wouldn’t be paid in scrip, since they have a legal claim to get paid in cash apart from congressional legislation).
The problem is that Congress has authorized taxes that bring in $X, borrowing that brings in $Y, and spending that costs $Z. X + Y < Z. So when congress orders spending $100 on cookies, and orders in $70 in taxes, but only orders $20 in allowable debt, how is that the President’s fault that the numbers don’t add up?
Congress has three moves here. Cut spending. Raise taxes. Authorize more debt. They cannot keep spending where it is, keep taxes where they are, but refuse to authorize more debt. The president does not have the authority to raise taxes, he does not have the authority to cut spending, he does not have the authority to issue debt. The most he can do is sign or veto legislation from congress that does those things.
And so not voting to extend the debt ceiling is like me voting not to pay my credit card bill. I already owe the money, I am obligated to pay it. Just because I say that the credit card bill exceeds my self-imposed debt ceiling doesn’t mean I don’t owe the money. If I don’t want to pay the credit card bill, I need to not charge things on my credit card in the future.
In other words, the third variable of the debt ceiling is meaningless. Congress implicitly votes for a certain level of debt when it votes for a certain amount of spending and a certain amount of taxes. The increased debt is simply the difference between those two numbers. If Congress doesn’t want the number to get higher, they need to control spending and taxation, not debt.
There are a few different legal tests for which act would apply. The primary is: can there be a way in which the first and the second acts can be read not to conflict with each other? If the answer is yes, then the laws are presumed not to conflict with each other.
If they cannot be read to give full effect to each act, then the next two tests hold that the specific trumps the general (the more specific provision should control when available), and barring that, the later in time trumps the earlier act. Google “Charming Betsy” for more information.
With respect to the debt limit and spending, since both acts can be read to not be in conflict with each other (the authority to borrow is the exercise of a different constitutional power than the mandate to spend), spending legislation is not read to imply or require either an increase in the debt limit or an increase in taxes in order to carry out the spending law.
If the government owes me money, then they cannot pass any legislation that says they don’t no matter whether I accept scrip or not. They owe me the money, and the Constitution says that that debt cannot be questioned.
I don’t know what this means. Everyone who is owed money by the federal government, is owed because of the federal budget.
One of your examples was Medicaid. OK - I am a doctor who accepts Medicaid. A patient shows up in my office, I render treatment, and send off a bill to the government for $1000.
The government says they can’t pay the full $1000, so they offer me scrip instead. I refuse, because I can’t redeem the scrip for the full $1000. This has no effect on the debt - the government owes me the money because they have contractually obligated themselves to pay me $1000 in return for treating the patient. They cannot pass a law saying, “Sorry, we have decided to pay you $800 instead”. That would be questioning the legal debt, and that violates the Constitution. (It also violates the prohibition on ex post facto laws.)
Debt has (usually) a date on which it becomes due and payable. Scrip would either change that date, in which case it would have to pay interest and would therefore be additional debt (and thereby violate the Constitution) or not change the date. If it does not change the date, then it is legal tender (and thereby violates the Constitution) or cannot be negotiated at face value, in which case it represents a partial repudiation of the debt. Which violates the Constitution.
I think this might be tha fallacy of equivocation with “debt” but . . .
If iI work, the government owes me money. Not scrip but real money. Slavery is illegal and there are minimum wage laws in effect. So merely working incurs a government debt.
And if I’m reading this correctly, the entire issue of scrip is moot. Can’t happen.
[QUOTE=29 CFR 531.34]
Scrip, tokens, credit cards, “dope checks,” coupons, and similar devices are not proper mediums of payment under the Act. They are neither cash nor “other facilities” within the meaning of section 3(m). However, the use of such devices for the purpose of conveniently and accurately measuring wages earned or facilities furnished during a single pay period is not prohibited. Piecework earnings, for example, may be calculated by issuing tokens (representing a fixed amount of work performed) to the employee, which are redeemed at the end of the pay period for cash. The tokens do not discharge the obligation of the employer to pay wages, but they may enable him to determine the amount of cash which is due to the employee. Similarly, board, lodging, or other facilities may be furnished during the pay period in exchange for scrip or coupons issued prior to the end of the pay period. The reasonable cost of furnishing such facilities may be included as part of the wage, since payment is being made not in scrip but in facilities furnished under the requirements of section 3(m). But the employer may not credit himself with “unused scrip” or “coupons outstanding” on the pay day in determining whether he has met the requirements of the Act because such scrip or coupons have not been redeemed for cash or facilities within the pay period. Similarly, the employee cannot be charged with the loss or destruction of scrip or tokens.
[/QUOTE]
Because scrip doesn’t pay any interest. Therefore any banker who redeems $50 worth of scrip for $50 is incurring a debt of $50 that pays no interest, and does not have to be repaid.
It’s the President’s fault if he tries to do this scrip thing that will achieve nothing but violate the Constitution.
All quite true. Also, all entirely irrelevant to this notion of scrip.
100% correct.
The point of the negotiations over spending is to force Congress not to “charge things on their credit card”. Both sides are engaging in brinkmanship to try to get what they want, with minimum impact on their own constituencies, and with maximum opportunity to blame the other side for everything.
And Obama is floating trial balloons of stupid, un-Constitutional ideas.