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CONG. ENGEL TO OBAMA: USE 14TH AMENDMENT TO END DEBT CRISIS

“President Obama can end our national debt crisis by invoking the 14th Amendment, and instruct the Department of the Treasury to issue whatever instruments are needed to prevent the country from defaulting on our legitimate debts and ruining our economy.

“He should continue discussions for a long-term budget plan to prevent our debt from growing, but not with the debt being held hostage. The artificial debt ceiling violates the 14th Amendment to the Constitution which states that “the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” 

“This clearly means it is unconstitutional to default on the debt owed to the bondholders of the United States, the largest holders of the debt being the American people. This was upheld by a 1935 Supreme Court ruling in Perry v. United States.

“These are debts that were authorized by Congress and now the extreme wing of the Republican Party in Congress would repudiate them. How can they claim to be Constitutionalists and violate the Constitution?   

“We cannot allow the ‘full faith and credit’ of the United States to become a hostage to those who want special provisions or conditions to be met. President Obama is absolutely right to say he cannot allow this precedent to be established.  

“The need for debt reduction is real, but requires a bipartisan and responsible agreement.  Democrats have agreed to some very tough choices in cuts to social programs.  The Pentagon has agreed to cuts in the military budget.  Still the Republicans are threatening to walk away from the table. This could easily destroy people’s retirement savings where the markets are spooked, the country’s credit rating is downgraded, and the foundations of our entire economy are put at risk. The consequences could make the 2007-08 Great Recession, our worst economic disaster since the Great Depression, pale in comparison.  This cannot happen.

“I call on the President to act for the betterment of our country.  I call on the leaders in both parties to accept the decision and work for a long-term solution to our spending and revenue problems.  That is true leadership, and is exactly what the American people need from us.”

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