Saturday, July 30, 2011

Debt Ceiling Crisis: Cutting off your nose to spite your face

Could this be what the Republicans/TeaPartiers had in mind all along? If politics is like a chess game, the players plan their moves long ahead of their actions. But to force such a constitutional and economic nightmare upon the American people seems more like cutting off your nose to spite your face.

The Debt Ceiling Crisis: Approaching the Witching Hour

by Geoffrey R. Stone,
Edward H. Levi Distinguished Service Professor of Law at the University of Chicago
As the clock runs down toward the witching hour on August 2, I see three possible solutions to the crisis. First, the Republicans and Democrats in Congress can agree on a compromise plan that raises the debt ceiling for a reasonable period of time and deals with at least some of the issues of spending cuts and new revenues that have thus far so furiously divided the parties. I suppose this is still possible, but it seems unlikely.

Second, the Republicans and Democrats in Congress can agree to increase the debt ceiling for a reasonable period of time without addressing any of the bitterly divisive spending and revenue issues. This is pretty much what has always happened in the past. Congress has separated the debt ceiling issue from the more difficult and more contentious issues of taxing and spending. At this point, that might be the best solution, but it too seems unlikely because of Republican intransigence.

Third, Congress can remain paralyzed and simply do nothing. If they follow that approach, which now seems likely, the current debt ceiling will remain in place and as of August 2 the government will not be able to borrow any more money and thus will no longer be able to pay its bills -- for the first time in American history. What happens then?

The most obvious outcome is that for as long as that state of affairs exists, the president will have to decide which bills to pay and which to ignore. In other words, the president would have to decide whether to suspend Medicare payments, cancel Social Security payments, withhold the salaries of government employees (including the military), default on our debt obligations, etc. With each passing day, the spending cuts would need to be deeper and deeper.

Some people have argued that, even if Congress does not raise the debt ceiling, these cuts and non-payments don't have to happen, because the president can ignore Congress' action and just keep on borrowing to pay the nation's bills. Some have argued that a little-noticed provision in section 4 of the Fourteenth Amendment authorizes precisely this course of action. This provision states: "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 provision of the Fourteenth Amendment, which was enacted shortly after the Civil War, was intended, in part, to prevent the former Confederate states, when they resumed their positions in Congress, from attempting to cause the federal government to renege on the debts the Union incurred to put down the "rebellion." A careful reading of the text, however, reveals that the provision goes well beyond that. It does not say that the validity of the public debt incurred to put down the rebellion "shall not be questioned," but that the public debt more generally "shall not be questioned," citing the Civil War issue as merely an illustration.

So, what is the relevance of section 4 to the current crisis? What it seems to say is that the government must honor all public debt "authorized by law." This suggests that non-payment of our existing debt is not a constitutionally-permissible option for the president. As a result, in making spending cuts beginning on August 2, the President apparently cannot constitutionally decide not to pay our outstanding debt. Rather, all of the cuts must come from ongoing expenditures. This would, of course, dramatically magnify the impact of the crisis on government programs, services and operations.

Faced with this dilemma, what is the president to do? There are those who argue that this entire controversy is much ado about nothing, because the President can simply "raise the debt ceiling on his own." They argue that, in light of "the president's role as the ultimate guardian of the constitutional order," President Obama should disregard Congress' failure to authorize additional debt and assume the authority to do the "right thing" for the nation. As Justice Robert Jackson observed more than half a century ago, "the Constitution is not a suicide pact."

This is a dangerous argument. Its proponents point to the one dramatic instance in American history in which a president openly exercised this extraconstitutional authority. (President Bush II, by the way, attempted to exercise this authority secretly when he authorized the use of torture and the NSA surveillance program in violation of federal law.) But that earlier instance, involving President Abraham Lincoln, was quite a different situation. It arose at the very outset of the Civil War, when Union troops needed to get to the nation's capital to protect it from possible Confederate attack.

Confederate sympathizers in Maryland were tearing up the railroad tracks in order to prevent the Union troops from moving south to the capital. Because the local authorities, who were sympathetic to the Confederates, did nothing to prevent this interference, the only way to end the obstruction was for Lincoln to suspend the writ of habeas corpus and authorize the military to arrest and detain those who were preventing the army from reaching Washington.

The problem was that the Constitution authorizes only Congress to suspend the writ of habeas corpus. But Congress was not in session, and in 1861 it could not be convened quickly. Faced with this crisis, historians and legal scholars agree that Lincoln was justified in doing what he did, even though it was not expressly authorized by the Constitution.

Even if one thinks that the danger to the national interest today is comparable to that facing Lincoln in 1861, the situations are importantly different. Today, Congress is in session and is refusing the raise the debt ceiling, even though it could easily do so. Because the Republicans in Congress refuse to do this, President Obama (unlike Lincoln) is faced with a "decision" by Congress. It may be a reckless and irresponsible decision, but it is a decision and it is much harder to justify ignoring a decision than to act in a situation where no congressional action was possible.

Having said this, I think the president is likely to (and should) take control of the situation and do the "right thing" for the nation, even though he has no express constitutional authority to do so. But to suggest that this crisis is much ado about nothing because the president can avoid a calamity by extra-constitutional means, and by doing something that no other president in American history has been called upon to do, is absolutely no excuse for the conduct of the Republicans in bringing us to this point.

Moreover, even if the president does this, there may be serious repercussions. First, the Republicans in the House may well attempt to impeach the president for acting "unconstitutionally." Even though this would go nowhere in the Senate, the very act of impeachment would exacerbate the dire state of politics in the United States today. Second, there will almost inevitably be litigation challenging the constitutionality of the president's action. (Note that in 1861, Chief Justice Taney held Lincoln's suspension of the writ of habeas corpus in Maryland unconstitutional and ordered him to lift the suspension. Lincoln ignored the Taney's ruling.). Is that a crisis we want to repeat?

The plain and simple reality is that unless the Republicans agree to raise the debt ceiling in the next two days, they will throw the nation into a constitutional and economic nightmare. If nothing else, they should have enough sense and self-discipline to know that they will pay dearly for this with the American people

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