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News/Politics

Will Obama Wait?

There are two important fiscal dates coming up in February: February 12 and February 15.

February 12 is the scheduled date of Obama’s State of the Union speech, which is also Lincoln’s birthday.

It also happens to be three days before the “X Date”, February 15, the estimated date that the Treasury may not be able to pay its bills. The debt ceiling deadline.

Does anyone want to speculate as to whether the President of the United States is going to announce during his State of the Union Address that he will be unilaterally bypassing Congress to raise the debt ceiling?

Picture the all-too-familiar scenario: it’s February 12th, and Congress will be deadlocked over raising the debt ceiling, cutting spending, raising taxes, and sequestration scenarios. We know that there will be no decision by then, because deadlines mean nothing in Congress – as we just witnessed with the fiscal cliff debates running down to the wire.

The Senate Democrats have already set up a plan in preparation. Senator Harry Reid sent a letter to Obama saying,

 

 

“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 an 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”

 

Such fiscal urgency from the same group that has failed to pass a budget since April 29, 2009.

Can Obama do this? That’s up for debate, as both sides of the aisle have given their evidence for or against such a move.

But wait. Does anyone remember the “We Can’t Wait” policy implemented by Obama in the fall of 2011, following the last debt ceiling showdown? The White House describes the program:

“President Obama is not letting congressional gridlock slow our economic growth. Without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs…. we can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.”

The narrative is being shaped. We have Obama’s program “We Can’t Wait” in place. According to the whitehouse.gov , Obama has issued 45 Executive Orders under this program. Couple the program with Reid’s letter, the time frame for the State of the Union and the potential default of the Treasury, and you have a perfect storm.

Be prepared. Be prepared for Obama to trot out imagery, language and ideas from Lincoln and work them into his State of the Union address as a backdrop to an announcement on the debt ceiling. Obama can, and will, propose that “We Can’t Wait” for Congress to act (or not act) on a potential default – since it is certain they will be gridlocked – and will use an Executive Order lifting the debt ceiling limit. This will change the ensuing discussion on taxes, spending, and sequestration. But will it also change forever the nature and function of the presidency?

About Alan Joel

Alan Joel has been a CPA for more than 40 years in New York City, where libertarians like him are few and far between. He discusses tax and politics at his popular website, www.taxpolitix.com. You can also find him at RedState, Canada Free Press and Examiner. Join the conversation!

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