Thursday, July 28, 2011

Does Obama Really Have a Constitutional Option?

Suppose our elected representatives are too divided or, if you prefer, too irresponsible, to converge on a deal to raise the debt ceiling by whatever point in time you regard as zero-hour. What should Obama do? The conventional answer is that he should start prioritizing public expenditures to service the public debt first and then engage in fiscal triage, paying out congressionally appropriated funds according to the relative urgency of the public needs they meet.

Some influential liberals, including Bill Clinton and Michael Tomasky, are gravitating to a less conventional answer that Obama should raise the debt ceiling unilaterally. This view comes in a stronger and weaker version. According to stronger version, Obama has a constitutional duty to raise the debt-ceiling unilaterally under the Fourteenth Amendment, which provides in pertinent part that “[t]he validity of the public debt of the United States . . . shall not be questioned.” On the weaker version, Obama needn’t, but may, raise the debt ceiling unilaterally as much as it takes to get him through the next election. If you ask me, neither argument gets Obama out of the jam he’s in.

The problem with the stronger view is that it posits a constitutional duty that pretty clearly doesn’t exist. The basic idea is that Congress will be “questioning” the public debt of the United States if it doesn’t raise the debt ceiling, and that Obama has a constitutional duty under the Fourteenth Amendment to keep that from happening.

Your guess about what it means “to question” the public debt of the United States is as good as mine. But it’s hard to see how Congress’ failure to raise the debt ceiling could possibly do it. By all accounts, the Treasury takes in enough revenue each day to service the debt already racked up without borrowing any more money. Moreover, the President does have a constitutional duty to “take Care that the Laws be faithfully executed,” including the law that put the current debt ceiling in place.

The weaker view is more plausible, at least in the interpretation favored by Jonathan Bernstein, because it puts a lot less strain on opaque constitutional provisions. On this view, if the debt ceiling isn’t raised, sooner or later Obama won’t be able faithfully to execute either the current debt-ceiling law or the plethora of laws commanding him to spend congressionally appropriated funds. Under the circumstances, the weaker version holds, the President may decline to execute the single law establishing the current debt ceiling in order to execute appropriation laws faithfully. If you wanted to push the envelope a little more, you might even contend that, in the spirit of the Constitution’s “take Care” clause, Obama ought to choose the course that enables him faithfully to execute a higher number of statutes, or the more substantively important statutes (like that authorizing him to send out Social Security checks).

As far as I can see, the weaker version of the argument works as far as it goes. The trouble, however, is that it doesn’t take Obama anywhere near the destination he's trying to get to. The weaker view doesn’t argue for the constitutional permissibility of Obama’s raising the debt ceiling unilaterally, much less raising it by an amount sufficient to reassure the bond market and get him through the next election cycle. At most, it argues for the permissibility of his borrowing discrete further amounts of money without congressional approval on a case-by-case basis as statutory obligations come due until Congress gets around to telling him how to resolve the contradiction its prior commands generate under present circumstances.

That means that, in the interim, Obama would still be performing fiscal triage.  Granted, he'd have a new credit card to do it with, but one with a borrowing limit that’s way too small to shield the rest of us from the macroeconomic consequences of Congress' failure to act.  In practical terms, that’s not materially different from the fiscal triage Obama would have to perform anyway under the conventional view we started with. And sticking a thumb in the House Republicans' eyes would just make it harder to do a deal with them down the road.

4 comments:

Anonymous said...

This is an interesting analysis. My takeaway is there is really no Constitutional option for Obama, Constitutional scholar that he is. To use a term from one of your earlier posts, he'd be crazy. He already is having difficulty dealing with Congress. If he were to pull this stunt, he'd be a lame duck in more ways than one.

Dave said...

It seems to me that you've unfairly weakened the weaker view. Once we agree that the President is authorized to borrow more money in order to execute the statutes that he's charged with executing, why does it even matter any more whether he's authorized to raise the debt ceiling? Once the debt ceiling loses its power to constrain borrowing, it's irrelevant. Going back to the credit card analogy: Obama may be over his credit limit, but Citibank is still going to approve all of his purchases (and with no pesky overlimit fees!).

Further, you argue that the President can borrow only discrete amounts as bills come due. That's enough of a slippery slope (can he borrow to cover the next day? the next week? the next month?) to enable any politician worth his salt to do whatever he wants, and come away looking justified.

Personally, I think Obama is hoping for the opportunity to take this route. He would then be able to present himself as the country's savior, the level-headed "adult in the room" who's responsibly doing what's best for the country, while the "broken" Congress bickers like "typical Beltway politicians". He's got the speech written already.

Ron Replogle said...

Dave,

Borrowing on an "as-needed" basis is materially the same as raising the debt-ceiling just enough to cover the next T-bill auction. It buys more time in increments that are too short to impress the bond market or the rating agencies. So it may be a useful stop-gap measure to give us more time to get to a deal, but it doesn't get us out of our fiscal and governing predicament. Granted, after what happened in the House last night, that's not insignificant.

Popinjay said...

Some one has to put a stop to the borrowing and that's what the tea partiers are saying. How can there be compromise when two of the three players at can't stop spending? We're going down to the wire with a constitutional showdown. I'd like to know if Las Vegas has odds on whether the tea partiers are powerful enough to bring this to a last minute constitutional crisis.