Wednesday, July 6, 2011

Playing Chicken with the Constitution

I pay particular attention to what Michael Tomasky says because I regard him as a pretty reliable guide to the state of informed and intelligent opinion in liberal circles. So I can’t help but notice that he thinks  (along with some other liberals like Matthew Yglesias) that the debt-ceiling negotiations are reaching a point at which it makes sense for Obama to up the ante by threatening to provoke a constitutional crisis. The president would now announce that he’s going to keep borrowing money without congressional consent on the theory that the plain language of the Fourteenth Amendment forbids Congress from doing anything that prevents the executive branch from discharging obligations that the federal government has already incurred.

Here's Tomasky explaining why that's a good idea from a Democratic standpoint:
“If you’re in the center or anywhere left of it, there are only two possible outcomes to debt-ceiling negotiations: terrible and unthinkable. The former would involve a successful deal between the parties, which will rip into domestic programs that help poor and working-class people and will do so without touching tax rates or the defense budget in any meaningful way. That’s terrible. Unthinkable is no deal by Aug. 2, which brings default and calamity.

“Neither of those outcomes being much good, why not a crisis? Maybe Obama should force this important question. And maybe this Supreme Court would rule against him, but this crisis would have been averted (presumably any court ruling would affect only future debt-limit votes) and he’d have shown the Republicans that he can play hardball, which I bet they don’t now think he can. And finally, some scales would have fallen from his hopeful, consensus-seeking eyes. So if panic there must be, let’s have one.”
It's not hard to see why Republicans seem to be backing Democrats into a budgetary corner. According to conventional wisdom that originated in a White House talking point, the Republicans and Democrats are playing a game of chicken with the full faith and credit of the federal government. Think about how that game works. The contestants are driving toward each other at breakneck speed. Each contestant’s most preferred outcome is that he keeps driving straight while the other swerves to secure their mutual safety. But they each prefer being the chicken to a head-on collision, and mutual swerving to being the chicken. Under those assumptions, the winner will be the contestant with the lower aversion to risk—that’s why they call the game “chicken.”

If that’s the game they’re playing, it’s perfectly understandable why the Republicans seem to be on the verge of winning. The Democrats’ threat not to swerve unless the Republicans consent to substantial revenue increases isn’t all that credible inasmuch as Democrats have already vividly displayed their lack of fortitude on tax policy. Remember, they could have raised tax revenue without the Republicans’ consent during the lame duck session of the last Congress simply by letting the Bush tax cuts expire for people in the upper tax brackets. If they didn’t want to run the political risks of raising "taxes on the wealthy" then, why should Republicans think that they’re suddenly willing to run it now when they're in a weaker political position? The fact that Democrats are proposing to do it by closing tax loopholes rather than by raising tax rates is another symptom of their timidity.

And that’s not the only advantage Republicans enjoy. In a standard game of chicken, the contestants both know precisely when the collision will occur if neither side swerves. In the debt-ceiling game, Republicans are acting like they don’t think August 2 is the collision-date while Democrats are the ones who've been insisting that it is. Moreover, enough Republicans are saying that the debt ceiling doesn’t need to be raised at all to make Democrats think they might mean it. That puts Democrats in the position of a driver having to contend with the possibility that his counterpart has enough of a James Dean complex to prefer going out in a blaze of glory to mutual survival. The real prospect of Republican irresponsibility is all the more reason for Democrats to swerve before they’ve reached what they think of as the collision date.

Seen in this light, what bargaining advantage do Democrats get out of threatening to play the “constitutional option”? Not much that I can see. You might think it evens the playing field some by giving Republicans the impression that Democrats no longer think that August 2 is really the collision-date. But that doesn’t make Democratic threats not to swerve before August 2 much more credible. They’ve been treating August 2 as the collision-date all along not because that’s when the government will suddenly run out of money to pay its debts, but because they've insisted that not getting a deal done by that date will spook the bond markets enough to accelerate the prospect of a real default. Suddenly wiping away a line you ostentatiously drew in the sand doesn’t make your subsequent threats any more credible than the ones they've superseded. That’s especially true when it’s hard to figure out why bond markets that were supposed to melt down if a debt-ceiling deal didn't get done by August 2 won’t melt down if a deal doesn't get done and a constitutional crisis is thrown into the mix.

The only way to stop being weak is to start acting as if you're strong.  As far as I can see, threatening to play the constitutional option is yet another sign of Democratic weakness.

2 comments:

Anonymous said...

Are these uncharted waters for the US government? Feels that way.

Jake said...

If Obama ignored the debt ceiling he'd get away without because the Senate wouldn't let the House take him to court and no one else would have standing.