"In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt-limit extension only as part of unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without Congressional approval, if necessary," wrote Senators Harry Reid of Nevada, Richard Durbin of Illinois, Charles E. Schumer of New York and Patty Murray of Washington.
The letter signaled an escalation in the war of words over the federal debt ceiling, which could be breached in just weeks. Already, liberal intellectuals have been trying to rally support for measures to go around the Republican blockade, from declaring that the 14th Amendment gives the president unilateral authority to raise the debt ceiling to minting a trillion-dollar platinum coin that would be used to pay the nation's debts.
"All Americans, Democrats and Republicans alike, have a stake in ensuring that our country meets its legal obligations," the Democratic leaders wrote. "Financial markets have long viewed securities backed by the full faith and credit of the United States as the most trustworthy in the world. This lowers borrowing costs for homes, cars, and college for all Americans and strengthens our economy. If we violate that trust for the first time in history, we will never fully regain it, and every American will suffer."
Mr. Obama has said he will not negotiate on raising the government's statutory borrowing limit, but without some extralegal maneuver, it is not clear how he can keep that promise. Speaker John A. Boehner, Republican of Ohio, has not backed down on his demand that any increase in the debt limit include cuts at least equal in scope, and Senator Mitch McConnell of Kentucky, the Republican leader, has also said the debt ceiling issue must be used to secure spending reductions. Other Republicans have suggested that a shutdown of some parts of the federal government may be necessary to focus public attention on the debt.
Conservative Republicans say that even without an increase in the debt ceiling, the administration could continue to pay the government's creditors by ensuring that incoming tax receipts go first to pay off debts. To do that, however, huge and immediate cuts in government spending would be necessary, and global financial markets would probably be rattled.
The Senate Democratic leaders did not suggest what "lawful steps" they had in mind. A Democratic aide said the senators would be inclined to have the president declare unilateral authority under the 14th amendment, which states, "The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
That, the aide said, would be more politically tenable than using the loophole of a trillion-dollar coin, minted under a legal provision that allows the Treasury to issue a platinum coin of any denomination.
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