![\"\"](\"http:\/\/www.amptoons.com\/blog\/wp-content\/uploads\/2011\/07\/constitution.jpg\" "\\"constitution\\"")
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The budget negotiations have reached an impasse; Republicans are demanding huge budget cuts without any significant revenue increases, or they’ll refuse to raise the debt ceiling, with disastrous consequences<\/a>:<\/p>\n In a letter sent to every member of Congress, Geithner said the national debt stands at $13.95 trillion – $335 billion short of the limit on borrowing that Congress set last year. Unless Congress acts to raise the limit, the letter says, the United States will default on its debt, an unprecedented event that could destroy “millions of American jobs,” cause interest rates to spike, damage the dollar, and halt payments to millions of Social Security recipients, veterans and active U.S. troops. <\/p><\/blockquote>\n Republicans are thinking that if that happens, they can just blame Obama and benefit from the economic collapse in the 2012 election. Or they’ve convinced themselves<\/a> that the US defaulting won’t actually have bad consequences, just as they’ve convinced themselves that global climate change won’t actually have bad consequences. ((This is the problem with a system that gives the minority party veto power, but holds only the majority party responsible for what happens — it encourages extreme irresponsibility in the minority party.))<\/p>\n But if Republicans in Congress refuse to raise the debt ceiling, could the Treasury declare the debt ceiling unconstitutional?<\/p>\n From section 4 of the 14th Amendment to the Constitution<\/a>:<\/p>\n 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. <\/p><\/blockquote>\n Yale constitutional scholar Jack Balkin provides some history<\/a>:<\/p>\n …the goal (of Section 4) was to remove threats of default on federal debts from partisan struggle. Reconstruction Republicans feared that Democrats, once admitted to Congress would use their majorities to default on obligations they did disliked politically. More generally, as Wade explained, “every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress.”<\/p>\n Like most inquiries into original understanding, this one does not resolve many of the most interesting questions. What it does suggest is an important structural principle. The threat of defaulting on government obligations is a powerful weapon, especially in a complex, interconnected world economy. Devoted partisans can use it to disrupt government, to roil ordinary politics, to undermine policies they do not like, even to seek political revenge. Section Four was placed in the Constitution to remove this weapon from ordinary politics.<\/p><\/blockquote>\n James Joyner writes<\/a>:<\/p>\n Undermining the notion that the Executive has the right to ignore laws that stand in the way of default\u2013in this case, the debt limit\u2013is the next line in the Amendment:<\/p>\n Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.<\/p><\/blockquote>\n Rather clearly, it is the legislature, not the executive, which has the responsibility to act. What if it abrogates that responsibility? Presumably, the president can do what presidents do: Act and dare the legislature to do something about it.<\/p><\/blockquote>\n Brad DeLong describes<\/a> how this might work in practice:<\/p>\n Tim Geithner announces that by law he is required to spend money on appropriations and entitlements–that he is not allowed to impound–and that there is not enough coming in in tax payments to both do all the spending he is legally required to do and to pay back the debt of the United States as it matures. In the absence of the 14th Amendment, he says, he would be required by law to default on the maturing debt. But, he says, the 14th Amendment forbids him to default. In order to take care that the laws be faithfully executed, therefore, even without explicit congressional authority to do so, he must borrow on the full faith and credit of the United States in order to completely (a) meet his spending obligations, and (b) honor the debt of the United States of America. He begins selling more bonds…<\/p><\/blockquote>\n Tim Geithner, the Secretary of the Treasury, is clearly considering using the Constitutional Option<\/a>, as are the Democrats in the Senate. ((Or at least, they’re threatening to use it as a negotiating tactic.))<\/p>\n And it’s unclear what Republicans could do about it.<\/a> <\/p>\n As far as what would happen…I see no reason to think that the president wouldn’t get away with it. It’s not clear who would have standing to (formally) complain, and at any rate the only way that the court could take meaningful action would have to involve an almost immediate injunction, right? In their HuffPo story, Ryan Grim and Samuel Haass point to the possibility of impeachment proceedings, but the truth is that Republicans have hardly been as trigger-happy on impeachment as some of us (myself certainly included) expected, so I wouldn’t count on that. Regardless, an impeachment in the House followed by acquittal in the Senate would still leave the policy in place.<\/p><\/blockquote>\n Jonathan Alder at Volokh<\/a> agrees:<\/p>\n If [President Obama] did, it\u2019s not clear what anyone could do about it. Were the White House to authorize the assumption of debt above and beyond that authorized by Congress, it is not clear that anyone would have standing to challenge this action in federal court. As a consequence, the question would be left to the political branches.<\/p><\/blockquote>\n (More on the issue of standing to challenge<\/a>.)<\/p>\n The Constitutional Option is an extreme step, and one I’d prefer not be used — but not more extreme than the Republicans in Congress holding a gun to the US Economy and threatening to shoot if they don’t get everything they want without compromise.<\/p>\n Assuming the Democrats do not have another 60% majority in the Senate anytime in the foreseeable future — and 60% Senatorial majorities are extremely rare — they have two choices<\/a>. First, Democrats could give the Republicans whatever they want in exchange for a short-term increase in the debt ceiling. Then, once the debt ceiling comes up again, they can give the Republicans whatever they want again. And again. And again.<\/p>\n The second choice is taking the hostage away from the Republicans. If the Republicans refuse to agree to a responsible bipartisan budget deal — incorporating stimulus measures (both spending and tax cuts) now, to be replaced by large budget cuts and revenue increases once the unemployment rate drops — than Democrats should use the Constitutional Option, as it’s being called. Take the gun away from the hostage-takers and begin negotiations anew, without the threat of economic Armageddon in play.<\/p>\n Further reading: Bruce Bartlett<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":" The budget negotiations have reached an impasse; Republicans are demanding huge budget cuts without any significant revenue increases, or they’ll refuse to raise the debt ceiling, with disastrous consequences: In a letter sent to every member of Congress, Geithner said … Continue reading