The Constitution of the United States reads as follows:
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;
To borrow Money on the credit of the United States;
The text of the 14th Amendment reads as follows:
Section 4. 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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
So, a straightforward reading says: Congress, only, can issue debt & the debt is good. The President has no authority to issue debt. Furthermore, it is my understanding that the Supreme Court ruled in the 1930’s that bondholders of the United States have higher standing to receive their payments than do the government’s operating entities (which includes Social Security, Medicaid, Medicare, etc.).
If the President does not have a Congressional deal, he will have to begin to cut spending on operations. He can cut military spending. He can cut social security. He can cut Medicare & Medicaid. He can suspend spending on the new Healthcare bill. He can layoff the entire EPA. But he has to pay the Chinese. With these options as a backdrop, the threat to “not sign a 60 day deal” rings pretty hollow.