Wednesday, January 23, 2013

Debt Ceiling back again!!!

Congress acted prior to the flip of the calendar to avert the "Fiscal Cliff" by raising the top nominal tax rate on those making over $450,000 while extending a plethora of "tax cuts" for everyone else. In addition Congress did not extend the payroll tax holiday which took money out of the depleted SSN kitty. Over the past few days we witnessed history with the swearing in of our President as it was a peaceful transition of power. Also, MLK was celebrated and Roe v. Wade had it's 40th anniversary.

Today, the House of Representatives will vote on raising the Debt Ceiling to ensure the United States can pay its debt for the next three months. The GOP lead House also put in a provision that if the Senate cannot pass a budget then the payroll of both houses of Congress would be held in escrow and if they are unable to establish a budget by the end of the 2014 budget year Congress still get's paid. Here is the bill:

Some see the extension of the Debt Ceiling with the caveat of the no pay clause as a gimmic by the GOP. While Congress should give back their pay and not get paid going forward until a budget is passed, it is really just a gimmic by the GOP because the no pay pledge is really just a deferral of payroll. That being said, others claim that the United States is Constitutionally obligated to pay all debts incurred by the Government. Actually under Article 1 Section 8 the Constitution reads:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

Can someone please help me understand where it states that Congress is Constitutionally obligated to pay all debts? I see that Congress has the power to pay the Debts but I don't read that as it is obligated to pay the Debts.