How to end the debt ceiling stand-off democratically: set fiscal policy through elections, not hostage taking
The Biden administration and congressional Democrats have so far refused to negotiate with House Republicans over spending cuts to resolve the looming debt ceiling crisis. This tactic has successfully pressured Republicans into passing a bill with unpopular spending cuts that Democrats will quite rightly use to their advantage in the upcoming election. But now that the House Republicans have put a plan on the table it will be difficult for Democrats to sustain their “no negotiation” posture.
To get the best possible outcome, President Biden and the Democrats need to persuade the public that their rejection of GOP spending cuts is justified, not just a stubborn and possibly dangerous refusal to compromise.
How can they do this? By pointing out that we just had an election, and that the Republicans misled the public by not acknowledging their plan to use the debt ceiling to jam through harsh and unpopular spending cuts. Biden and the Democrats should state clearly what should be obvious: We live in a democracy. We need to have a responsible fiscal policy, but we must have a public debate over the future of Social Security, Medicare, Medicaid, and other programs that so many Americans rely on. Then voters should have the opportunity to weigh in. In other words, Democrats should turn the coming election into a referendum on the future of fiscal policy.
This strategy allows Democrats to reject spending cuts now without seeming stubborn, partisan, or fiscally irresponsible. They can acknowledge the need for reform and welcome Republican ideas for strengthening our core social insurance programs. This is the best way for Democrats to maximize their leverage in the coming debt ceiling show-down. It is also their best strategy for winning control of Congress and for keeping President Biden in office.
Accusing the Republicans of “hostage taking” won’t cut the mustard
Democrats have justified their refusal to negotiate spending cuts by accusing Republicans of “hostage taking”, by pointing out that Congress has effectively required the government to borrow by authorizing spending that exceeds revenue, by accusing Republicans of fiscal extremism, etc.
These arguments are all correct as far as they go. But it is not at all clear how persuasive they will be with swing voters.
As a general matter, if fiscal restraint is needed, which will surely seem plausible to many voters in a time of higher-than-normal inflation, then it is not clear why spending cuts should not be on the table.
More specifically, to many voters lifting the debt ceiling and cutting spending may seem like a reasonable compromise: Democrats get the debt ceiling lifted, which many people will think of as an increase in spending, while Republicans get what they want, which is spending cuts. Of course, lifting the debt ceiling is not an increase in spending. It just allows the government to make payments on existing debt and to fund spending already authorized by Congress. But this is a subtle point, and if people do not understand it refusing to “compromise” by accepting some spending cuts may come across as stubborn, reckless partisanship.
Reframing the debate
The way to mitigate this risk is to invite the Republicans to a wide-ranging debate over the future of fiscal policy in the upcoming election.
The choice we face is not “stubbornly refuse to negotiate” or “compromise with Republicans on spending cuts”. The choice is between 1) accepting harsh cuts that do nothing to ensure the solvency of Social Security, Medicare, and Medicaid, and were not disclosed to the public during the recent election campaign, and 2) having a robust debate about whether we should address the funding gap for Social Security, Medicare, and Medicaid by controlling health care costs and modestly raising taxes, or by cutting benefits. Democrats should come down firmly on the side of debate, democracy, and giving voters the opportunity to decide what kind of country they want to live in. And, of course, they should make the case for strengthening our core social insurance programs, rather than cutting benefits.
Polls and history
Many Democrats seem to believe that negotiating with Republicans over the debt ceiling is a mistake. This reasoning has two elements, a belief that negotiations just encourage future hostage taking, and a belief that the public tends to side with Democrats on fiscal standoffs. Both assumptions are debatable.
Biden’s advisors apparently believe that public opinion is on their side. I obviously do not know what the Democrats’ internal polling shows, but Nathaniel Rakich provides a good summary of public opinion during past debt ceiling negotiations and government shutdowns here.
The data Rakich reviews does indeed suggest that Republicans have generally gotten most of the blame for these manufactured crises.
Unfortunately, this history is of limited relevance to our present circumstances. The closest analogy to the current moment is the 2011 standoff over the debt ceiling between President Obama and congressional Republicans. As Rakich shows, it seems this protracted standoff hurt Republicans more than Obama, but there are two differences with the current standoff.
First, Obama made a very public effort to negotiate with the Republicans. Many Democrats believe these negotiations were an error, and they may be right. But it is entirely possible that voters would have judged Obama more harshly if he had refused to compromise.
The key question is who gets blamed for a debt default, if we stumble into one
The more important point, however, is simply that past standoffs did not lead to an actual debt default. We have experienced government shutdowns, and shutdowns are bad, but the damage is contained and for the most part is quickly reversed once the shutdown ends. Default is a real possibility right now. We have no idea how bad it will be if it happens, but it could be very, very bad, and the pain could last for months or even years.
It is far from clear that Biden and the Democrats will avoid blame if a debt default triggers a global financial crisis and recession, especially if they refuse to negotiate. Furthermore, if there is a major economic downturn, Trump – apparently Biden’s most likely opponent in 2024 – will undoubtedly point out that the government did not default when he was President. The fact that this is only true because Democrats in Congress behaved responsibly and worked with Republicans to raise the debt ceiling may not seem all that relevant to unemployed voters. In fact, it seems safe to say that many voters will simply be unaware of this history. We can make our best arguments and admonish the media to do a better job educating the public, but we all know that this is hardly a failsafe plan.
The upshot is that Democrats need to appear reasonable and open to responsible fiscal reform. This will bolster their bargaining position by making it more likely that Republicans will get blamed if the government stumbles into a default. And the way to appear reasonable is not to capitulate to Republican blackmail, but to say that Democrats would welcome an honest, wide-ranging national debate over fiscal policy in the coming election campaign. Doing this is also the best way to deter future efforts by Republicans to use the debt ceiling to force concessions on spending, because open debate over fiscal policy is likely to go very badly for the GOP, and they know it.
What if negotiations fail?
There is a real chance that negotiations to raise the debt ceiling will fail. (For pessimistic analysis see here, here, and, here.)
If this happens, Biden should absolutely take non-conventional measures to avoid a default. I have no view on which approach would be preferable – minting the platinum coin, issuing debt with a low or zero face value and a high interest rate, arguing that the debt limit is unconstitutional or can be ignored because it conflicts with appropriations statutes, etc.
My point here is simply that any unconventional measures will lead to predictable criticism from opportunistic Republicans and small-minded pundits who are in thrall to the idea of business as usual. To minimize the political cost of this criticism, Biden needs to gain the moral high ground by being open to reform but insisting on the right of the people to decide on the future of the country. He needs to welcome debate to show that he is not a stubborn partisan, and that his hand was forced by radical, intransigent Republicans.
Giving Republicans a fig leaf is fine
None of this means that President Biden and the Democrats should reject any compromise that allows both sides to claim victory and avoids a fiscal calamity.
Whether such a compromise is possible is far from clear, but this is normal politics, and it’s fine. What is critical is to endorse fiscal responsibility*, to bring Social Security, Medicare, and Medicaid into the debate, and to insist that the future of these programs must be decided by the voters. Putting these popular programs at the center of the debate over fiscal policy is the key to deterring future hostage taking stunts. And it is the best way to beat Republicans or to force them to moderate on fiscal issues.
[* just to be clear, endorsing fiscal responsibility does not mean insisting on immediately balancing the budget, or slashing spending, or preventing any rise the ratio of debt to GDP. I hope to discuss this further in future posts. For current purposes endorsing fiscal responsibility simply means acknowledging that we need to ensure that revenues and expenses stay in reasonable balance over the next few decades as the population ages and the demands on our social insurance programs grow.]
The problem with this approach is that it gives Republicans two bites at the apple each year: once on budget negotiations and another on the debt ceiling. That needs to stop. I can’t imagine why you doubt that cutting a deal with them now won’t encourage the same behavior in the future.
A debt default could be catastrophically bad. So unless Biden is prepared to ignore the debt ceiling, the case for reaching some kind of compromise is strong. I’m not saying he should just roll over. He should bargain hard. But how hard he can bargain will depend on whether he is willing to ignore the debt ceiling, and on whether he convince voters to blame Republicans if there is a default. The way to do this is to call out Republicans for lying about their intentions during the last election and challenging Republicans to put forward their plan to ensure that Social Security, Medicare, and Medicaid are adequately funded. This is the real issue, and Republicans are clearly on the wrong side of it.
a debt default would be catastrophically bad so the case is strong for getting rid of the “debt ceiling”. there is NO cse for talking with criminals who would bring about a debt default if we don’t defer to their demands.
calling them out for lying during the last election will have as big an effect as the breath of air that escapes our lips while we call them out.
i personally have heard enough of their “plans” to “save social security.” the way to save social security is to pay for it ourselves [not demand the rich pay for it]. the way to save medicaid is to fold it into medicare for all. the way to save medicare [for all] is to pay for it ourselves. not demand the rich pay for it.
this would cost more in taxes, while saving the taxpayer twice as much in private insurance and provider price gouging. Roosevelt and Truman and Eisenhower and Tip O’Neil understood this. For some reason Carter and Clinton and Obama did not.
Hell, even if Reagan did not understand it, he came around and approved it in 1983…thanks to some Republicans who convinced him he had to.
I agree that Democrats will win an argument about SS/MCARE/MCAID. But that’s not the debate we’re having. We need to change that. Just saying “no hostage taking” is not the same thing as discussing social insurance.
Also, an important point I did not mention is just how radicalized the House Republicans are now. A rational person playing chicken with a crazy person will lose. We need to change the public framing of the issue.
Krameruy
given that even you think the public is ill informed and irrational i am not sure why you are so concerned about who takes the blame for a shutdown or default. why can’t we just do the sensible thing and do a better job of selling it?
the sensible thing: refuse to negotiate with hostage takers. get rid of the debt ceiling on previously enacted programs. raise taxes to pay for what we buy or have already bought.
try to remember and remind people that Social Security has nothing to do with the Debt. they pay for it themselves directly through the dedicated, off-budget, payroll tax and can continue to pay for it with a very modest increase in that “tax” which is not so much a tax as a very well insured mandatory savings plan to ensure they can pay for…have already paid for…what they need when they can no longer work.
i do not mean to be rude or unkind but it seems to me your argument here is so up in the air [abstract and assuming “what the people will think”] that it is wrong in the same way all our politics is deeply unreal…except in its consequences: the consequences of not thinking clearly or honestly., but only in terms of “politics”: “‘oo gets what.”…which is not the same as actually solving a problem.
kramer
sorry about the typo. my fingers have their reasons reason knows not of.
Democratic politics is about “what people will think”. That’s a feature of democracy, not a bug. I don’t know who will take the blame if there is a catastrophe, but just condemning Republicans for hostage taking and refusing to discuss fiscal policy may not be enough to save the Democrats, and this weakens their negotiating position.
Kramer
what people will think depnds upon what you tell them. folding up because “beople will blame us” for the crimes of our opponents is a pretty good way to ensure our opponents win…and commit their crimes against the people.
Biden can make his case and so can every Democrat in the country, and even some honest Republicans. If we can’t win this case maybe the people need a refresher course in the economics that caused the Great Depression.
I agree that getting rid of the debt ceiling would be the sensible thing to do, as you say, but how do we do this? We can’t even get Republicans to raise the debt ceiling, never mind repealing it. We need to play the hand we are dealt.
no, we need to demand an honest deck.
granted the current R’s are insane. We don’t play chicken with them. We beat them up.
The voters are not insane. not yet. but if we keep playing by the insane rules, the voters will come to believe there must be some reason for it, and accept it as the way things are.
Thing about the debt ceiling is that it is an insane gift to the Republicans..like handing your enemy an extra machine gun..or nuclear bomb.
Republicans have the same chances to win election as Democrats. Make their case to the people and win or lose. Then in Congress they have the same chances to affect policy as Democrats… argue themerits and vote up or down.
But after all this we give them a final veto…After the bills are passed and the money is borrowed and spent we give them the opportunity to crash the economy by refusing to pay for what Congress bought. …actually refusing to LET US pay for what we bought. They have the same chances to change policy in future as the Democrats, but we give them a chance to blackmail us to get the policies they want but couldn’t get by normal electoral process.
apparently some parties are more equal than other parties.
we also give them the chance to yell about “deficits” in an atmosphere of terror. but for some reason they never call for a tax increase to pay for what we bought. or to rescing the tax cut that did not pay for itself.
Not just for what we bought but for what they bought as well. The debt ceiling statute needs constitutional challenging.
Jackd
in case it’s not obvious, i agree with you entirely.
trouble is, i think the constitution may hav died with bush v gore and trump’s Court.
maybe we could get it back, but from the opinions i read from folks and their congressional representatives, i am not optimistic.
There is always the Andy Jackson position: pay no attention to that allegedly Supreme Court!
Marking the calendar . . .
rescind not resting. ineed a better spell checker.
obviously
Do you see an Andy Jackson around here anywhere?
if you can find it Richard Striner has an essay on line which shows the Supreme Court is not Constitutionally immune from being overruled. I don’t remember the details. But Striner is knowledgeable and a good writer. Our problem may not be so much the SC as the mad republicans and the feckless democrats.
President Biden is quoted in news stories today as saying he is “not quite ready” to go the 14th Amendment route, implying that he might become ready. I am afraid that he’s trying to bargain with the House Republicans while claiming that he isn’t. In other words using the 14th Amendment as leverage. I doubt much good will come of that.
Jackd
i don’t follow you. looks to me more like he’s nodding toward the gun in his belt and saying “don’t make me have to hurt you.”
if we hadn’t been asleep while the Right gathered it’s forces, including the Supreme Court, using the 14th and declaring the debt ceiling unconstitutional would have been a slam dunk. now we can’t know what the SC would do.
i can understand the dems playing mr nice guy while this was happening to them, or even trying to fight it by “constitutional means” but i think we have reached the”putin threatens Nukes” moment.
i believe, don’t know for sure, that past attacks against SS were defeated by serious organization and “touch it and you die” assurances. i haven’t seen anything like that in response to the R’s quiet coup.
Well, I hope you’re right but you probably recall that he has set up a meeting with McCarthy and McConnell for May 9th and repeatedly says he is ready to discuss the budget with them. That doesn’t sound like the gunfight at the OK corral to me. Seems more like a hybrid bargaining over the debt ceiling that he can call something else.
i hope i’m right too, but i wouldn’t bet on it. there is something rotten in this country and i am not sure how deep it goes. hard not to be paranoid.
best hope i have is that everyone is just stupid and maybe good guys win in the end,
here’s the trick. maybe.
Biden meets the bad guys. says raise the debt ceiling, then we’ll talk about the budget. i don’t think we will say repeal the debt ceiling, though that would by the honest, sane, solution.
but he better make clear he’s not going to bargain away Social Security, debt ceiling or no. thing is i don’t trust him. carter, reagan, clinton, bush2, and obama were all ready to bargain SS away …because they utterly don’t understand it, or they are just all criminals playing high stakes poker with each other, the people be damned except for propaganda purposes.
Found the Striner article and it is excellent! He points to Lincoln as the one who would shrug off and ignore the Supreme Court. I agree that Lincoln is a more persuasive model than Jackson.
glad you found striner. i lost my link.
Republicans have no interest in solutions or compromises. They are obviously willing to burn down the country in order to install their sick theocracy for billionaires. Let it burn if half the country supports them.
expat
i know how you feel. but the othr half of the country would burn too.
Doing Whatever It Takes on Debt
NY Times – Paul Krugman – May 4
The United States is barreling toward a debt crisis; the possibility of default on U.S. debt is already beginning to roil markets.
What’s odd about this potential crisis is that it has nothing to do with excessive debt. Maybe you think the federal government has borrowed too much over time. We can argue about such things. But they’re beside the point right now. America in 2023 isn’t like, say, Greece in 2009 or Argentina in 2001, cut off by investors because they have lost faith in our solvency.
Our looming crisis will, instead, be entirely self-inflicted — or, more accurately, Republican-inflicted. If it happens it will be because the party controlling the House refuses to raise the debt ceiling, a quirk of the U.S. budget process that lets Congress prevent the government from making payments that have already been approved through past legislation.
There are three things you need to know about this crisis.
First, whatever courts may say about the constitutionality of the debt ceiling, budget decisions should be dictated by votes over spending and taxing, not by hostage-taking in which the party most willing to destroy the economy gets what it wants.
Second, if the politics of extortion do lead to a debt default, the consequences will be catastrophic.
Third, there is no economic downside to the various ways the Biden administration might seek to bypass Republican extortion and continue normal governance. Contrary to a lot of misinformation out there, things like issuing premium bonds or minting a platinum coin would not be inflationary. They sound undignified, but creating a global depression because we’re afraid of looking silly would be utterly irresponsible. …
Here’s how budgeting is supposed to work: Congress passes bills that set tax rates and determine spending, which become law if the president signs them. Much of the time the legislated spending exceeds revenue, so the government must borrow to cover the difference. So be it. But under a quirk of U.S. law, with complicated origins, Congress must vote a second time to authorize the borrowing required by its own previous votes.
What would it mean if Congress refused to authorize that borrowing, that is, refused to raise the debt ceiling? It wouldn’t be a way to restrain spending. It would, instead, amount to preventing the president from making payments Congress has already mandated. It would be like buying a bunch of home furnishings, taking delivery, then refusing to pay the bill.
And it would be hugely destructive.
A new report from the White House Council of Economic Advisers lays out potential costs from a default induced by Republican refusal to raise the debt ceiling. The analysis suggests that a protracted default could cost eight million jobs as a result of shocks to consumer and business confidence, increased interest rates on U.S. debt (which investors would no longer consider safe) and drastic forced cuts in government spending.
Even these projections may understate the likely damage. Until now, the world has viewed U.S. government debt as the ultimate safe asset; as a result, Treasury bills play a crucial role as collateral in many financial transactions. Make these bills unsafe — I.O.U.s that the U.S. may not honor — and the whole global financial system could freeze up.
In fact, this almost happened for a few days in March 2020, and it’s not clear whether a rescue could be engineered in today’s political environment. …
So what can be done? Let’s not make a deal: Republicans are effectively engaged in a fiscal version of Jan. 6, using the threat of destruction in an attempt to exert total control even though voters gave them only one house of Congress.
President Biden shouldn’t give in to extortion, let alone make any deal acquiescing to demands of the extremists who control the House G.O.P.
It’s possible that Biden could simply declare that he must implement duly enacted fiscal legislation and that a debt ceiling that prevents him from doing so is unconstitutional.
Beyond that, there are those gimmicks. Yes, they would be gimmicks. I don’t have space to explain premium bonds, but they would involve playing games with the definition of “debt.” As for the platinum coin, the law allowing the government to mint a trillion-dollar coin was never intended as a way to bypass debt-limit extortion — but the debt limit was never intended to provide a mechanism for extortion, either.
And there are no significant economic downsides to using these gimmicks. I’ve been shocked to see people who should know better, including mainstream media outlets, report as fact the myth that, say, minting the coin would be inflationary. It wouldn’t; it would simply be a backdoor way to continue normal financing, bypassing the letter of a debt ceiling that shouldn’t exist in the first place.
I’m not sure what specific approach the Biden administration will adopt. But the guiding rule should be to do whatever it takes to get through this — whatever it takes, that is, other than giving in to extortion.
‘… there are no significant economic downsides to using these gimmicks. I’ve been shocked to see people who should know better, including mainstream media outlets, report as fact the myth that, say, minting the coin would be inflationary. It wouldn’t; it would simply be a backdoor way to continue normal financing, bypassing the letter of a debt ceiling that shouldn’t exist in the first place. …’
Using the ever-plausible ‘No Such Thing as a Free Lunch’ rule, which is so obvious to even the most casual observer (as prof’s used to tell us about tough proofs at RPI), there have to be costs to such gimmicks even if we don’t see them. Unless of course, there aren’t. Who can’t believe that?
(The GOP, clearly. Dems are more wishful thinkers.)
OTOH, sometimes (pretty often actually) you have to sacrifice what’s good for the country for what’s good for the wealthy people in it. So it would seem.
Private Jet Travel Is Booming.,,
NY Times – May 5
… Patriotic Millionaires (is) an organization of wealthy people who favor higher taxes on rich people like themselves …
… According to an analysis published this month by Patriotic Millionaires and the Institute for Policy Studies (I.P.S.), a left-leaning think tank, private jet users pay nowhere near their share of the cost of maintaining American airports and airspace.
Every commercial airline passenger in America is subject to a 7.5 percent tax on domestic ticket prices, a facility charge of up to $4.50 per flight segment (up to a maximum of $18 for a round trip) and extra charges for flights to Alaska, Hawaii or international travel. Private fliers only pay fuel surcharge taxes of about 22 cents a gallon, according to the analysis. As a result, though they make up about 16 percent of all flights handled by the F.A.A., private jet flights “contribute just 2 percent of the taxes that make up the trust fund that primarily funds the F.A.A.”
Per the analysis, “the median net worth of a full and fractional private jet owner is $190 million and $140 million respectively.” In other words, some of the richest people in the world are effectively being subsidized by plebes like you and me flying coach.
Then there’s climate change. Because they typically carry so few passengers on each trip, flying private is far worse for the environment than flying commercial. According to a report by Transport & Environment, a European group that advocates zero-emissions transportation, “private jets are on average 10 times more carbon intensive than commercial flights.” …
The point here is NOT that rich folks are getting interested in NOT taking advantage of tax breaks or their wealth generally, rather it’s that income inequality continues to boom and mostly it is taken advantage of. And seems to effect those who are NOT wealthy, to the extent that they worship & admire those who are.
I would not negotiate with the crazies who control the GOP— that is what makes this so dangerous— McCarthy has literally sold his soul to the devil. Second, if we default we will end up as a country struggling to survive just as Britain in post Brexit. There may be a lot of buyer’s remorse but it does not change things. Eight million unemployed? Might be more like 20 million. Third, the “ gimmicks” might limit the damage but will not eliminate it. The world is looking at us and realizing we are an unstable country one coup away from becoming third world albeit with nukes. The saving grace may be those rich folks telling their bought and paid for Representaives that while they do not want to pay their fair share they sure as hell do not want the whole applecart upset either.
They could tell them to just raise the fu..ing debt limit!
Jack:
We are monetarily sovereign. Just turn on the printing machine for now.
Joe Biden, in an interview last night with Stephanie Ruhle on MSNBC said he is not ready yet to envoke the 14th Amendment yet to deal with the Debt Crisis.
Asked About Age, Biden Says He Knows ‘More Than the Vast Majority of People’
NY Times – May 6
The president also said that he was not yet prepared to lean on the 14th Amendment to compel the government to pay its debt amid a showdown with House Republicans.
… In the interview, Mr. Biden said he was not yet prepared to invoke a clause in the 14th Amendment that would compel the federal government to continue issuing new debt should the government run out of cash, an event that Treasury Secretary Janet L. Yellen warned this week could come as soon as June 1. “I’ve not gotten there yet,” he told Ms. Ruhle.
Republicans are demanding major spending cuts before raising the debt limit. But Mr. Biden has repeatedly said that he will not negotiate over the debt ceiling, pointing out that it was raised several times under former President Donald J. Trump without issue. In his interview, he reiterated that he was willing to negotiate on federal spending — as long as it was separate from debt-ceiling negotiations.
“This is not your father’s Republican Party,” Mr. Biden said, repeating claims he has made before about extremists within the G.O.P. “This is a different, a different group. And I think that we have to make it clear to the American people that I am prepared to negotiate in detail with their budget. How much are you going to spend? How much are you going to tax? Where can we cut?”
Mr. Biden is supposed to meet with Republican and Democratic leaders at the White House next week to discuss a path forward. …
My recollection is that certain weak fiscal responses during crises in the Obama administration were later blamed on cautious urging from VP Joe Biden.
This is probably not the time for that again.
Obama himself said he couldn’t use the 14th Amendment because Lawrence Tribe told him “it wouldn’t hold up”, or words to that effect. I’m not sure the Obama hesitation was caused by Biden although I’m sure Biden reinforced it.
Obama & Biden were & are both centrists (as am I), but back in the day Obama was still learning the ropes, and though far more charismatic than Biden, was willing to follow his lead, which has always been a bit too respectful, perhaps, of US rigtward sesnibilities.
During his presidency, Biden has outwardly seemed more respectful of ‘traditional’ (labor-favoring) notions than previously (maybe?), but still tends to compensate by being all-the-more conscious of ‘his friends on the other side of the aisle’ who really aren’t his friends at all.
What I was thinking of was the amount of stimulus offered by the early Obama administraation for the recession of 2008, and Larry Summers role in keeping it low, though Janet Yellin wanted to go big.
The Memo that Larry Summers Didn’t Want Obama to See
New Republic – Feb 20212
Joe Biden supported Larry Summers in this I recall,
which made for a protacted recession back then.
The Great Recession of 2008
I really don’t know who Lawrence Tribe is, but you are filling me with despair. It is so obvious the post-facto debt ceiling is insane, and that the 14th gives cover for declaring it unconstitutional that I have to wonder what is wrong with people who put up with it.
If I buy something on credit and take it home and use it and then tell the guy who sold it to me that “sorry, i can’t pay for it because my wife won’t let me unless i promise not to buy groceries for the kids, they would put me in jail.
I still think the anser is a massive campaign to tell the people what is going on. I can understand the people being uninformed, but I can’t understand “business leaders” not getting it.
re Tribe
https://www.newyorker.com/news/news-desk/did-laurence-tribe-sell-out
one of his students was Obama, also a sell-out. and another was Ted Cruz…a pretty good example of a Harvard Graduate: talented but without an principles but ambition.
Actually Tribe has come around and now says the 14th Amendment is a legitimate way to go. Biden, despite his law school education, is less a lawyer than a politician and doing deals is what he understands best. Unfortunately, the other day he said he felt the debt ceiling statute was appropriate. Why? He didn’t say. When all else fails, I hope he has the courage to pull out that amendment and end the argument.
… Section 4 of the Fourteenth Amendment says, in part: “The validity of the public debt of the United States, authorized by law, including debts incurred for the payment of pensions and bounties for service in suppressing insurrection or rebellion, shall not be questioned.” In both the Clinton and Obama administrations, legal scholars such as Lawrence Tribe argued that Section 4, so oddly worded, did not directly limit the power of Congress; it does not say a willful default would be unconstitutional. Professor Tribe said that Section 4 was not enough. …
The Constitutional Case for Disarming the Debt Ceiling
The New Republic – Jan 2023
OTOH, this just in…
Why I Changed My Mind on the Debt Limit
NY Times – Lawrence Tribe – May 7
… Section 4 of the 14th Amendment says the “validity” of the public debt “shall not be questioned” — ever. Proponents of the unconstitutionality argument say that when Congress enacted the debt limit, effectively forcing the United States to stop borrowing to honor its debts when that limit was reached, it built a violation of that constitutional command into our fiscal structure, and that as a result, that limit and all that followed are invalid.
I’ve never agreed with that argument. It raises thorny questions about the appropriate way to interpret the text: Does Section 4, read properly, prohibit anything beyond putting the federal government into default? If so, which actions does it forbid? And, most important, could this interpretation open the door for dangerous presidential overreach, if Section 4 empowers the president single-handedly to declare laws he dislikes unconstitutional?
I still worry about those questions. But I’ve come to believe that they are the wrong ones for us to be asking. While teaching constitutional law, I often explored the problem of bloated presidential power, the puzzle of preserving the rule of law in the face of unprecedented pressures, and the paradox of having to choose among a set of indisputably bad options. During my last semester teaching, with Covid forcing my seminars from the classroom to the video screen, I studied the most insightful literature on the debt ceiling and concluded that we need to reframe the argument.
The question isn’t whether the president can tear up the debt limit statute to ensure that the Treasury Department can continue paying bills submitted by veterans’ hospitals or military contractors or even pension funds that purchased government bonds. …
The right question is whether Congress — after passing the spending bills that created these debts in the first place — can invoke an arbitrary dollar limit to force the president and his administration to do its bidding. …
There is only one right answer to that question, and it is no.
And there is only one person with the power to give Congress that answer: the president of the United States. As a practical matter, what that means is this: Mr. Biden must tell Congress in no uncertain terms — and as soon as possible, before it’s too late to avert a financial crisis — that the United States will pay all its bills as they come due, even if the Treasury Department must borrow more than Congress has said it can. …
Note that in Tribe’s op-ed today, he does NOT actually cite the 14th Amendment as a solid reason for the president to ignore the debt limit.
Apparently Tribe thinks the President should just ‘cite the Constitution’ as the reason for doing so. Good luck with that.
(This is why many do not find Tribe all that credible an authority, IMO.)
Also note, however that Prof Tribe’s op-ed today begins…
At this moment, at the White House as well as the Departments of Treasury and Justice, officials are debating a legal theory that previous presidents and any number of legal experts — including me — ruled out in 2011, when the Obama administration confronted a default.
The theory builds on Section 4 of the 14th Amendment to argue that Congress, without realizing it, set itself on a path that would violate the Constitution when, in 1917, it capped the size of the federal debt. Over the years, Congress has raised the debt ceiling scores of times, most recently two years ago, when it set the cap at $31.4 trillion. We hit that amount on Jan. 19 and are being told that the “extraordinary measures” Treasury has available to get around it are about to run out. When that happens, all hell will break loose.
Taking advantage of that prospect, congressional Republicans are threatening to do nothing unless the administration agrees to slash lots of government programs that their party has had in its sights. If the president caves to their demands, they will agree to raise the cap — until this crisis occurs again. Then, they will surely pursue the same game of chicken or, maybe more accurately, Russian roulette. It’s a complicated situation, but a solution is staring us in the face.
Section 4 of the 14th Amendment says the “validity” of the public debt “shall not be questioned” — ever. Proponents of the unconstitutionality argument say that when Congress enacted the debt limit, effectively forcing the United States to stop borrowing to honor its debts when that limit was reached, it built a violation of that constitutional command into our fiscal structure, and that as a result, that limit and all that followed are invalid. …
(So, what to do? What to do? Alas…)
A Presidential veto of the GOP Limit, Save, Grow Act of 2023 if it makes to the Oval Office (unlikely) may be done without any particular explanation, but citing ‘un-Constitionality’ might be called for.
Lawrence Tribe: No 14th Amendment solution
Politico – 2011
One of President Barack Obama’s most enthusiastic supporters, Harvard Law professor Laurence Tribe, said on Friday the White House and Congress can’t fall back on the 14th Amendment to make an end run around the current debt crisis. …
(However, Professor Tribe is usually ignored when it comes to his opinions about Constitutionality, it seems to me. In this case, the Progressive POV would have been to push for declaring federal budget defaults to be unConstitutional, period.)
That was 2011 with Obama. He’s changed his mind since then.
Yes, I see that the NYT today published LT’s latest on the topic.
From which, after much dithering including citing himself for saying otherwise 11 years ago, advising that Biden should just go ahead and ignore the GOP attempt to default, insisting the ‘The Constitution does not permit such a default.’ Sure. Why not?
As of January 2023, LT was STILL being cited as a reason for NOT stopping the GOP nonsense about a default by citing the 14th Amendment.
I am glad that Tribe changed his mind. But I suggest it is a good reason not to take “expert opinion” too seriously. If an opinion about the law is unstable even in the mind of a leading expert, there might be some reason to suspect that other opinions might have some validity that the expert has not yet discovered. This is common enough in science..indeed it is the rule by which science progresses.
i think the best we can say about a supreme court opinion is that it is the rule by which lower courts “must” decide cases until the rule changes. But that does not mean that other branches of government are forbidden from ignoring the rule. In order for there to be some stability in government i would expect that the top executive, if he agrees with the court, would order his subordinates to follow the rule. What happens then when a person challenges the rule, or cites another rule in opposition to it… i dunno. either the Court changes its mind, or does not, and the executive either enforces the change or ignores it. I would expect that in by far the most cases the executive would “obey” or agree with the court just to prevent damages to civil order that would follow from the confusion, In the case of Jackson, the people agreed with Jackson and not the Court (although remote generations…us… would agree with the court, and so, not surprisingly, subsequent courts and administrations have changed their minds).
i hope i am not arguing for chaos here, but only suggesting that government ultimately depends on finding rules that the people agree with enough to not riot in the streets. an easy enough goal to reach, actually.
But I think we have reached the point where any SC ruling in favor of the debt ceiling invitation to blackmail would be, can be, should be ignored. The unholy Right only has power as long as we cede it to them by a kind of blind faith in “the rule of law” when the law ..in the person of the SC…has become dangerous to us personally and to democracy itself.
that same Striner article I was unable to find also suggests that Madison himself said roughly what I think I am saying here.
He did but probably more persuasive to people at large is the fact that Lincoln made the same argument.
yes. can you send me the link.
i can’t find that particular article.
i’m wondering ig i would be so happy with my theory in the case of Trump ignoring congress or a SC not his own.
tentative answer: i think i’d have to be. Trump got away with it..probably because he had the SC and much of the Congress and the peoe. in that case we would need to have started making sure the laws were sane, humane, and not designed to destroy democracy itself long before we got a Pres Trump.
History News Network, Oct. 9, 2022 and Oct. 23, 2022; Richard Striner
He has a tweet saying he published his change of mind in 2021, also by tweet, I think.
See above. LT’s NYT op-ed that Biden should just ‘cite the Constitution and ignore the default.’
Vetoing the House bill, if it even somehow gets through the Senate and makes it to the Oval Office, does not require citing anything.
After all…
POLITICS White House says Biden would veto House Republicans’ debt ceiling bill
CBS News – April 23
The White House said Tuesday that it “strongly opposes” House Republicans’ bill that would lift the debt ceiling into 2024 but slash federal spending, and warned that President Biden would veto the proposal if it were to land on his desk.
The White House’s Office of Management and Budget (OMB) called the 320-page legislation, known as the Limit, Save, Grow Act of 2023, a “reckless attempt to extract extreme concessions as a condition for the United States simply paying the bills it has already incurred.”
“Altogether, this legislation would not only risk default, recession, widespread job loss, and years of higher interest rates, but also make devastating cuts to programs that hard-working Americans and the middle-class count on,” OMB said in a statement of administration policy.
The White House budget office said the House GOP’s plan “stands in stark contrast to the president’s vision for the economy” and his budget proposal for the 2024 fiscal year that was sent to Congress last month.
“Therefore, if the president were presented with the Limit, Save, Grow Act of 2023, he would veto it,” the statement read. …
(No need to bring up the 14th Amendment at all to do a veto, if it makes it to Biden’s desk.)
Well, if he just vetoes the bill, that still leaves the debt limit having been reached. If he continues to pay the bills, he’s, in effect, denying the legality of the debt limit legislation. Ultimately, that turns on the 14th Amendment.
Well, after all…
On July 28, 1868, the 14th Amendment to the United States Constitution was ratified. The amendment grants citizenship to “all persons born or naturalized in the United States” which included former slaves who had just been freed after the Civil War. …
14th Amendment to the Constitution Was Ratified July 28, 1868
Don’t forget Section 4.
Life After Default
President’s Council of Economic Advisors – Oct 21, 2021
A default would fundamentally hinder the Federal government from serving the American people. Payments from the Federal government that families rely on to make ends meet would be endangered. The basic functions of the Federal government—including maintaining national defense, national parks, and countless others—would be at risk. The public health system, which has enabled this country to react to a global pandemic, would be unable to adequately function.
Furthermore, a default would have serious and protracted financial and economic effects. Financial markets would lose faith in the United States, the dollar would weaken, and stocks would fall. The U.S. credit rating would almost certainly be downgraded, and interest rates would broadly rise for many consumer loans, making products like auto loans and mortgages more expensive for families who are subject to interest rate changes or taking out new loans. These and other consequences could trigger a recession and a credit market freeze that could hurt the ability of American companies to operate. …
Everyone in America would feel the effects of a default. If the United States were to default, tens of millions—including families with children, retirees, and veterans—would quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet.
In 2020, almost 50 million residents received retirement benefits through Social Security, and 6 million received survivors benefits. In 2015, around 12 million people relied on Social Security as their sole means of support.[1] As shown in Figure 1, the average retired Social Security recipient counts on receiving almost $1,600 per month. Among households receiving any Social Security benefits, those benefits make up more than half of household income on average.[2] And yet, if we default, these Americans may not receive their Social Security payments on time, or even at all.
… Over 60 million people across America are on Medicare, 75 million are enrolled in Medicaid, and almost 7 million children receive coverage through the Children’s Health Insurance Program (CHIP). Net Medicare payments, alone, amount to about $1,100 per recipient. Although affordable health care is vital, particularly during a pandemic, millions could find themselves without coverage.
A default threatens veterans’ programs as well, with over 9 million veterans relying on physical and mental care, in addition to other supports. For a single veteran with a 50 percent disability rating and no dependents, the average disability benefit is around $900 per month; veterans with families or with greater disability ratings receive more.
If the Federal government ended up missing or delaying payments, millions would be unable to put food on the table or pay rent. Before the full weight of the Federal pandemic response had come to bear, the hardships experienced early on—exemplified by families going hungry and waiting in food lines—remind us of the raw misery that inadequate Federal support brings in the wake of an economic shock.
Examples of other important forms of Federal assistance that would also be at risk are outlined in the table below. This is an underrepresentation, of course, as the Federal government is responsible for funding many programs on which Americans rely—from childcare, to cash assistance, to aid for small business owners. …
Dobbs
it’s not just “aid” and “welfare.” Companies that have contracted to supply doods and services..say arms for defense…would not be paid. Be sure to tell your friends on the Right. or even the “Center.”
as for the wall street types who agree with the R’s..they are either stupid or just bluffing in order to get the policies they want.
as for Social Security, the government paying back what borrowed from the Trust Fund might be blocked..i don’t know how they would work that out in their own little minds so much for the full faith and credit of the United States of America?
but the money coming in from payroll taxes would enable benefits to be paid mostly and would not, I think, be affected by the debt ceiling..again subject to the little minds in congress because even though the administrative costs of SS are small and paid for out of the payroll tax, Congress gets do decide how even that money is spent, or just whether or not the SSA offices will be open to do business.
moral to my story: congress is in the hands of the Jan 6 rioters..don’t be fooled by the suits, they are in there to stop the government from functioning…unless we the people do what they tell us to.
It would seem that as of June 1 or so, aside from Soc Sec payments (per the 1996 law), the guv’mint just stops issuing checks.
As Janet Yellen has said, the guv’mint will be out of funds on or about June 1, so presumably at the point they will just stop paying the bills.
Thanks to a law passed by Congress in 1996 (Section 1145, “Protection of Social Security and Medicare Trust Funds”), Social Security checks will keep flowing, even if the U.S. government begins defaulting on its other existing financial obligations by as early as June 1. This law allows, and effectively obligates, Secretary Yellen to circumvent the debt ceiling by disinvesting Social Security’s asset reserves to cover benefits.
Will Social Security checks be stopped by June 1?
What GOP senators are saying
Axios – May 3
“Hard deadlines do make a difference, because there’s a sense of urgency around them,” Senate Minority Whip John Thune (R-S.D.) told Axios. “But I think the impression here is that there’s probably still some flexibility there.”