Just Do It: Issue the Debt!

5/8/23

For weeks, I’ve been struggling with the question of what Biden’s posture should be in the face of the issue of the debt limit. As of today, the two sides are at a standstill with no indication of either giving in: Biden is insisting on a clean bill to raise the debt limit, and the Republicans are refusing to raise the limit without enacting a commitment for substantial budget cuts. Whether a default will be averted is very much in the air. I suppose a few MAGA holdouts in the Congress don’t have a problem with that outcome, but the overwhelming consensus on the part of both parties is that a default would be catastrophic; and yet neither side has shown a willingness to relent on their position.

Thankfully, Laurence Tribe offered a solution in a NY Times Op Ed piece. For those who may have missed it, Tribe highlights this portion of the 14th amendment to the Constitution: “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.” This amendment came into being in 1868. Legislation relating to the imposition of a debt ceiling, on the other hand, was enacted and first implemented in 1917.

It shouldn’t take a legal scholar to appreciate the inherent conflict that the debt ceiling legislation has created. I’m perplexed as to how or why that legislation passed in the first place or why it hasn’t since been deemed to be unconstitutional; but for whatever reason, thus far it hasn’t been challenged. In any case, except for a handful of instances, we’ve been spared the kind of gamesmanship that the Republicans are currently embracing, as Congress has managed to avoid the conflict by generally and repeatedly raising the debt limit on a pro forma basis.

Constitutionally, the administration is charged with carrying out the laws as prescribed by Congress, including spending the funds that Congress authorizes; and currently, existing laws on the books allow for two different courses of action. Previously passed authorizations in effect say, “spend the money we’re authorizing,” but failure to raise the debt ceiling says, “don’t.” In essence, Tribe is opining that the debt limit authority shouldn’t supersede the original budgetary allocation authority. Without the debt ceiling being raised, one or the other of these laws would necessarily be violated. Why should the choice of which law to uphold and which law to violate be problematic? It shouldn’t be. Both parties participate in the authorization process, and when such bills are passed, the resulting authorizations should be spent. It’s really that simple.

Given the perspective that Tribe has so ably offered, it seems to me that Biden has the stronger hand in these matters; but he’s not playing it that way. I believe he should make clear that the administration will issue whatever debt is necessary to “validate” any and all prior commitments Congress has authorized, irrespective of any vote on the debt ceiling. Such a pronouncement would make moot any concerns about a potential default and save us all from the dire consequences that failing to make those payments would bring. I would hope that the administration controls all the levers of power needed to affect this outcome, and Biden should make clear his intent to use them.

Undoubtedly Biden would be accused of violating the law by forging ahead and issuing additional debt; but the same charge would be equally valid when lodged against the Republicans seeking to withhold those previously authorized allocations. The critical difference is that by ignoring the debt ceiling restriction, Biden would be saving us from an economic crisis, while by failing to raise the debt ceiling, the Republicans would be precipitating one.

In all likelihood, any action by the administration to issue debt in defiance of a constraining debt ceiling would be met with legal challenges that I expect would be resolved by the Supreme Court. So be it. With some trepidation, I’m prepared to leave it to the Court to sort out this basic question: If Congress passes authorizing legislation, can Congress obviate that earlier legislation by failing to raise the debt ceiling?

Regrettably, the outcome of any such judicial consideration is uncertain. I’m willing to take the chance. I’ve always understood that a guiding principle in jurisprudence was that if any law (state of federal) conflicted with the Constitution, the Constitution would prevail. This question is exactly what is at issue. On this basis, it seems more than reasonable that the Court would opine that the debt ceiling legislation is unconstitutional and strike it down, once and for all.

My best guess is that the Court is smart enough to realize that failing to do so would further sully its already suspect reputation and irredeemably cast the Justices in the majority as political pawns of the Republican party, all the while serving to green light an economic crisis. That combination would seem to be too great a burden for any Court to bear.

I could be wrong, but with this Court, it’s a crapshoot.

Have feedback? Send me an email at igkawaller@gmail.com.