# Does not raising the debt ceiling really mean default?
**URL:** https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676
**Category:** Great Debates
**Created:** [September 25, 2013, 10:04pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676 "2013-09-25T22:04:44Z")
**Posts on this page:** 12
**Page:** 2
### Author:  [@SlackerInc](https://boards.straightdope.com/u/SlackerInc)
#### Post date: [September 26, 2013, 2:02pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/21 "2013-09-26T14:02:02Z")
> [@Ravenman](#):
>
> I understand that your basic contention is that the end of borrowing authority for the government does not directly equal default, and that the media are over-hyping the risks. Am I correct in characterizing your views?
No, and I figured this would happen, that my position would be conflated with one of “what’s the big deal” or even to being a proponent of letting the debt ceiling go unraised. I am a true blue Democrat. I think the House GOP is the biggest bunch of idiots and maniacs around, with most of the Senate GOP not all that far behind. But I don’t believe the media are giving an accurate presentation of what this vote actually means. It’s not about “over-hyping”; it’s just inaccurate hyping. I’m perfectly willing to believe the consequences are dire, just not that they are necessarily default on the national debt, that it’s not more complicated and less certain than that.
> [@](#):
>
> Then let’s just exclude the media entirely. [Here](https://www.cbo.gov/publication/44608) is a report from the Congressional Budget Office. It concludes:
>
> > [@](#):
> >
> > […]That restriction would severely strain the Treasury’s ability to manage its cash and could lead to delays of payments for government activities and possibly to a default on the government’s debt obligations.
But that completely supports \*my \*position! The CBO qualifies it with “possibly” (not even “probably”). Whereas nothing reported in the media (that I’ve seen or heard; I’m sure it exists somewhere) adds this caveat. That makes a \*\*huge \*\*difference.
BTW, apropos of nothing: anyone who currently has a decent portfolio of stocks and/or mutual funds (I don’t) would do well, I suspect, by selling them off now, keeping the cash on hand, then repurchasing them in about three weeks (after there has been a nice dip in prices). If they settle everything before there’s a big dip, rebuy quick and you might take a slight haircut. But the chance for making a much bigger profit should the House GOP dig in their heels (which seems very likely this time) looks awfully juicy.
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### Author:  [@Buck\_Godot](https://boards.straightdope.com/u/Buck_Godot)
#### Post date: [September 26, 2013, 4:50pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/22 "2013-09-26T16:50:56Z")
> [@Bricker](#):
>
> When the United States decides it wants to build a new aircraft carrier, and fund dental care for the poor, the Congress appropriates money to fund programs to accomplish these goals. The Executive branch then has the legal authority to enter into a contract with a shipbuilding company and a cadre of dentists to provide those services. But if, halfway through the year, the money runs out, and the executive is forced to tell the shipbuilding company, “Stop building the ship,” and the dentists, “Stop drilling those molars,” this is not a default. In fact, by law, pretty much every contract the government enters into contains clauses that say that payment under the contract is subject to the availability of funds, and can be terminated for the convenience of the government.
Can the executive branch legally decide unilaterally not to use funds authorized by congress? It sounds like you are saying that if there aren’t available funds and he is not allowed to incur more debt then the president can ignore congress’s appropriation to build the carrier. But what if its a normal year and the president just thinks we don’t need another aircraft carrier, is that legal?
Note: this isn’t a rhetorical question I’m actually interested in the answer.
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### Author:  [@Shodan](https://boards.straightdope.com/u/Shodan)
#### Post date: [September 26, 2013, 5:03pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/23 "2013-09-26T17:03:45Z")
I believe the issue is
[list=A][li]The public doesn’t really understand the situation[/li][li]The media doesn’t want to explain it too fully because anything more than soundbites and superficialities might make Obama the Most Holy and Blessed look bad [_]The media especially want Obamacare to go thru, and if they cover that aspect of it, it might bring undesired attention to the 60% or so of the public who don’t like Obamacare [_]The media really, _really_ wants to deny the GOP any success. Because Congressional elections are coming up next year, and if the GOP regains control of the Senate Obama is a footnote for the rest of his tenure.[/list][/li]Regards,
Shodan
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### Author:  [@Ravenman](https://boards.straightdope.com/u/Ravenman)
#### Post date: [September 26, 2013, 5:04pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/24 "2013-09-26T17:04:09Z")
The answer is no. There is no legal authority for the President to simply decline to spend funds appropriated by Congress: that would constitute either impoundment or a line item veto.
If the President does not want to spend funds appropriated by Congress as a matter of principle, he must send a special message to Congress asking for a new law rescinding the funds. I’m pretty sure this has never happened.
The Executive Branch is afforded some latitude in delaying spending funds for reasons other than a principled objection to some matter: for example, if Congress appropriates funds for a carrier, but in an effort to get the best price for the government, it takes a long time to negotiate the best price for that ship, the Executive Branch is not subverting the law simply because it has not been able to spend the funds as quickly as Congress may desire.
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### Author:  [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)
#### Post date: [September 26, 2013, 9:13pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/25 "2013-09-26T21:13:54Z")
> [@Shodan](#):
>
> I believe the issue is
> [list=A][li]The public doesn’t really understand the situation[/li][li]The media doesn’t want to explain it too fully because anything more than soundbites and superficialities might make Obama the Most Holy and Blessed look bad [_]The media especially want Obamacare to go thru, and if they cover that aspect of it, it might bring undesired attention to the 60% or so of the public who don’t like Obamacare [_]The media really, _really_ wants to deny the GOP any success. Because Congressional elections are coming up next year, and if the GOP regains control of the Senate Obama is a footnote for the rest of his tenure.[/list][/li]Regards,
> Shodan
Aside from your first point, I think its the opposite.
I agree the public doesn’t udnerstand the situation but I think that if what the Republicans are doing was well and fully explained it would be look like the Republicans are putting their party ahead of their country.
I see this **60% of Americans don’t like Obamacare** thrown around a lot and I think a lot of those people in the 60% are people like me who disapprove of Obamacare because we don’t think that Obamacare doesn’t go nearly far enough.
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### Author:  [@SlackerInc](https://boards.straightdope.com/u/SlackerInc)
#### Post date: [September 26, 2013, 9:24pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/26 "2013-09-26T21:24:35Z")
> [@Ravenman](#):
>
> It’s a terrible, wasteful way to run the government.
Absolutely no dispute there. I just want the media to accurately report the terrible, wasteful things the House GOP is causing, rather then inaccurately simplifying them.
I would add that I can’t see how the government has any chance to be run efficiently until Democrats retake the House. Even having Republicans take the Senate and Oval while keeping the House would make the government more efficient, although not in a way I would like.
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### Author:  [@RickG](https://boards.straightdope.com/u/RickG)
#### Post date: [September 26, 2013, 9:26pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/27 "2013-09-26T21:26:59Z")
> [@Shodan](#):
>
> I believe the issue is
> A. The public doesn’t really understand the situation
I agree. And the GOP is doing everything it can to obscure the issue to the point where they never will.
> [@](#):
>
> ```
> B. The media doesn't want to explain it too fully because anything more than soundbites and superficialities might make Obama the Most Holy and Blessed look bad
>
> ```
What, precisely, would explaining the situation better do to make Obama look bad? Congress authorized the spending, without increasing taxes to pay for it (which, in the Keynesian view, is the correct thing to do during the recession and weak recovery). Now they want to stop the Executive from carrying out their laws by taking away the only other way available to pay for the spending, namely, issuing debt. Is there evidence that the Administration has been stealing all that deficit spending?
> [@](#):
>
> ```
> C. The media especially want Obamacare to go thru, and if they cover that aspect of it, it might bring undesired attention to the 60% or so of the public who don't like Obamacare
>
> ```
Until they actually live under it. Which hasn’t happened yet. Except for those things like coverage for your kids until they’re 26. Let’s take that away and find out how many of those people still want the ACA gone. Let insurance companies cancel coverage for **insured** people who get sick, or deny coverage to someone who once had a boil because pre-existing condition. The GOP fears that Obamacare will go into effect and people will realize that it is, for all its flaws, better than the old alternative.
> [@](#):
>
> ```
> D. The media really, *really* wants to deny the GOP any success. Because Congressional elections are coming up next year, and if the GOP regains control of the Senate Obama is a footnote for the rest of his tenure.
>
> ```
Evidence? Fox News hates the GOP, I understand. But aside from them?
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### Author:  [@YogSothoth](https://boards.straightdope.com/u/YogSothoth)
#### Post date: [September 26, 2013, 10:34pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/28 "2013-09-26T22:34:10Z")
> [@Shodan](#):
>
> I believe the issue is
> [list=A][li]The public doesn’t really understand the situation[/li][li]The media doesn’t want to explain it too fully because anything more than soundbites and superficialities might make Obama the Most Holy and Blessed look bad [_]The media especially want Obamacare to go thru, and if they cover that aspect of it, it might bring undesired attention to the 60% or so of the public who don’t like Obamacare [_]The media really, _really_ wants to deny the GOP any success. Because Congressional elections are coming up next year, and if the GOP regains control of the Senate Obama is a footnote for the rest of his tenure.[/list][/li]Regards,
> Shodan
I think its sad that your hatred of Obama and the Democrats have reduced you to this level in that you actually believe this. No amount of facts and evidence will convince you, so simply wallow in how wrong you are.
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### Author:  [@elucidator](https://boards.straightdope.com/u/elucidator)
#### Post date: [September 26, 2013, 10:49pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/29 "2013-09-26T22:49:54Z")
> [@Bricker](#):
>
> …In fact, by law, pretty much every contract the government enters into contains clauses that say that payment under the contract is subject to the availability of funds, and can be terminated for the convenience of the government.
Not pay contractors. Brilliant. What could possibly go wrong?
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### Author:  [@jasg](https://boards.straightdope.com/u/jasg)
#### Post date: [September 26, 2013, 11:46pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/30 "2013-09-26T23:46:39Z")
[This](http://www.nationalreview.com/corner/359534/revealed-house-gops-debt-ceiling-plan-jonathan-strong) is an interesting article from the National Review, laying out the Republican brief on the debt limit bill they are working on for this Friday.
In addition to a 1 year suspension (not increase) in the limit there is a one year delay of the ACA and an entire shopping list of items. The entire PDF is [here](http://c9.nrostatic.com/sites/default/files/20130926_Debt_Limit_Brief.pdf) but it include these wonders:
> [@Congressional Debt Limit Brief](#):
>
> (truncated list)
>
> **Tax Reform Instructions**
> o Similar to a bill we passed last fall, laying out broad from Ryan Budget principles for what tax reform should look like.
>
> **Energy and regulatory reforms to promote economic growth**
> o Includes pretty much every jobs bill we have passed this year and last Congress
>
> **Mandatory Spending Reforms**
> o Mostly from the sequester replacement bills we passed last year
>
> **Health Spending Reforms**
> o Means testing Medicare
> o Repealing the Public Health trust Fund
It is almost like they are tying their entire legislative portfolio to the debt limit…
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### Author:  [@elucidator](https://boards.straightdope.com/u/elucidator)
#### Post date: [September 27, 2013, 2:51am UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/31 "2013-09-27T02:51:09Z")
Obama appoints Ted Cruz to be Vice-President, and then commits _seppuku_ in the Rose Garden…
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### Author:  [@buddy431](https://boards.straightdope.com/u/buddy431)
#### Post date: [October 1, 2013, 11:10pm UTC](https://boards.straightdope.com/t/does-not-raising-the-debt-ceiling-really-mean-default/669676/32 "2013-10-01T23:10:50Z")
This was discussed some last time the debt ceiling almost didn’t get raised. While no one knows for sure, most experts thought that
1: If push comes to shove, the treasury will get to decide who to pay
2: The treasury will pay bond investors on time (to avoid a formal default)
So what doesn’t get paid? Last time some Social Security payments were threatened, mostly because they were supposed to go out soon after the treasury was to run out of money. Probably whatever big comes up first when the treasury runs out of money isn’t paid on time.
[http://money.cnn.com/2011/06/28/news/economy/debt\_ceiling\_fallout\_bpc/index.htm?iid=EL](http://money.cnn.com/2011/06/28/news/economy/debt_ceiling_fallout_bpc/index.htm?iid=EL)
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