Today, Congressman Jerrold Nadler (D-NY) voiced his support for the Constitutional option in the event that Congress is unable to raise the federal debt ceiling by the August 2nd deadline.

He issued the following statement:

“As I observe the ongoing efforts among Republican leaders to blackmail this nation’s future over the raising of the debt ceiling, I am at a loss for words.  Never before in the history of our nation has anyone been so reckless and blinded by inflexible ideology that they for a moment thought to play chicken with the full faith and credit of the United States.

“Even Newt Gingrich, who shut down the federal government to try, knew better than to suggest, even for a moment, that we wouldn’t ensure that this great nation would make good on its debts.

“We enjoy historically low interest rates, a stable currency, and the dollar remains the global reserve currency precisely because no one has ever doubted that through war, deficits, good times, and bad times, the United States has always been an outstanding credit risk. 

“Alexander Hamilton understood this following the Revolutionary War, the nation understood it after the Civil War, every President, and every Congress in our history have understood the importance of ensuring that no one would ever doubt our ability or willingness to make good on our obligations.

“Every family understands this.  So does every business.  Good credit and maintaining confidence in your creditworthiness are absolutely essential.  Without it, businesses close, families lose their homes, and countries lose their futures.

“Yet, today, we have a Republican majority that doesn’t understand what every homeowner, credit card holder, and small business takes for granted: you don’t default on your debts.

“What do we hear from our Republicans?  The Republican Chairman of the Budget Committee actually said, ‘If a bondholder misses a payment for a day or two or three or four – what is more important is you are putting the government in a materially better position to better pay its bills going forward.’

“That’s who the Republicans have put in charge of the Budget Committee.  Just try that with your credit cards and see what happens.  Or listen to the three major credit rating agencies – all of whom have sent clear signals that, if we go into default, even technical default, our credit rating will plummet.

“People in positions of power who don’t understand what that means are a danger to the economic future of this country.

“Fortunately, previous generations, from the founders of this country, to the framers of the 14th Amendment, to every Congress and President since 1789, have understood this crucial if obvious truth.

“That is why, after the Civil War, when there was a real question whether the United States would make good on our debts, we wrote into the 14th Amendment 'The validity of the public debt of the United States, authorized by law . . . shall not be questioned.'

“The Supreme Court has on only one occasion – in the depths of the Depression – had the opportunity to rule on this section.  In that case, Perry v. United States, the Court said, ‘The Constitution gives to the Congress the power to borrow money on the credit of the United States . . . . Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.’

“That is what is really at issue here.  Congress – whether for good or ill, has already spent money we don’t have.  We’ve borrowed from the world markets and from average Americans to fund that shortfall.  That’s in the past.  Republicans may not like that, and they may wish we hadn’t done it, but they voted for two wars that weren’t paid for, crippling tax cuts for the wealthy, and other expenditures that turned record surpluses into record deficits in record time.

“Now is the time to pay our creditors.  We’re already on the hook, and we cannot, as a nation, walk away.

“If basic economics and simple moral decency aren’t persuasive to the Republican majority, so be it.  The Constitution – the Supreme Law of the Land – requires it.

“So, if Congress chooses to flout our obligations, the President has no choice but to exercise his duty to ‘take Care that the Laws be faithfully executed.’  He is obliged under section 4 of the 14th Amendment to pay this nation’s debts, even if a lawless and irresponsible Republican Congress refuses to do so.  The Constitution commands it, our nation’s future demands it, and he must do it.

“I sincerely hope it will not come to this.  Congress has never failed yet to make good on its obligation to pay our debts.  But the Constitution trumps recklessness, and reckless determination to place partisan political advantage and a blind dedication to an extreme ideology.  Should events necessitate it, I call on the President to fulfill his constitutional duty if Congress will not.”

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