Where Does Obama Get the Authority to Borrow Money on the Credit of the United States?

Article One Section Eight of the United States Constitution gives Congress the power to borrow money on the credit of the United States. It's one of the 18 enumerated powers of Congress, and this power isn't extended into the executive branch. However, that hasn't stopped Obama in his plans to bailout cash strapped states.

From the Washington Post:

States that have borrowed billions of dollars from the federal government to cover the soaring cost of unemployment benefits would get immediate relief from the Obama administration under a plan to suspend interest payments for the next two years.

The proposal, which will be included in the budget request President Obama will send to Congress next week, would allow states to avoid raising taxes on employers to cover the payments - which are projected to total $3.6 billion through 2012, according to independent estimates.

The proposal was described by an administration source familiar with Obama's budget, speaking on condition of anonymity because the budget has not been released. At a time when Washington is grappling with its own record deficits, this person said the president's proposal would avoid tax hikes on businesses when the economy is weak while ensuring that most states repay the $42 billion they have borrowed since the recession began in 2007.

"The president's proposal does two things that are most important," White House press secretary Robert Gibbs said. "It prevents increases in the federal tax that goes to the unemployment insurance fund, and that's tremendously important given where we are economically. But it prevents future state bailouts, because in the future, states are going to have to rationalize what they offer and how they pay for it."

Republicans quickly blasted the proposal, calling it a tax increase that employers can ill afford.