Debt Ceiling

  • August 11, 2011

    by Jeremy Leaming

    Tea Party activists and some in Congress remain dead-set against increasing taxes on the wealthiest, loudly proclaiming that the nation must make draconian spending cuts to lower the national debt. Indeed, as the debt-ceiling debacle revealed, some House lawmakers appear forever committed to slashing government programs. The Right’s mantra of no new taxes continues to thrive and galvanize, even as the economic inequality gap continues its devastation.  

    The president and other Democratic leaders are also apparently swayed by the obstinate stance against increased revenue, in light of the agreement reached on raising the debt ceiling, which includes plans for even more spending cuts, during a time when the effects of the Great Recession continue to be felt coast to coast.

    And yet, as numerous economists have pointed out time and again, there is an economic inequality gap that is exponentially growing. Columbia University Business School Professor Joseph E. Stiglitz wrote earlier this spring for Vanity Fair in an article titled “Of the 1%, by the 1%, for the 1%,” about this yawning gap that has been nurtured by the economic policies of the Right, and embraced by too many Democratic leaders.

    “While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall,” he wrote. “All the growth in recent decades – and more – has gone to those at the top.”

    The shrinking middle class is increasingly taking note of this picture, recent polls bear this out. At capitalgainsandgames, Bruce Bartlett cites 23 recent polls that show overwhelming numbers of respondents believe the budget deficit must be tackled by tax increases, not just spending cuts.

    And the wrangling over national debt is just part of the ongoing effort by the nation’s wealthiest to keep things just the way they are. As Stiglitz wrote in his piece, “The top 1 percent may complain about the kind of government we have in America, but the truth is they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.”

  • July 19, 2011

    Former President Bill Clinton said he would exercise the constitutional power to raise the nation’s debt ceiling “without hesitation” if he were faced with a default while serving as president, and would “force the courts to stop me.”

    “I think the Constitution is clear and I think this idea that the Congress gets to vote twice on whether to pay for [expenditures] it has appropriated is crazy,” Clinton said during an interview Monday night with The National Memo.

    President Obama has sidestepped the question of whether he would invoke the Constitution in the event an agreement on deficit reduction is not reached, saying, “I don’t think we should even get to the constitutional issue. … The notion that the U.S. is going to default on its debt is just irresponsible.”

    But several scholars have weighed in on whether the Constitution offers a solution should Congress fail to act. Yale law professor Jack Balkin and Harvard law professor Laurence Tribe have agreed that Section 4 of the Fourteenth Amendment does not authorize the President to act, but Tribe and others have noted that Congress’s behavior in “acting in a way to call the public debt into question” may be unconstitutional, even if there is no clear remedy other than to hold Congress publicly accountable.

    In a new blog post, Ohio State University law professor Peter Shane, who specializes in executive power, calls the argument that the President has the power under the Fourteenth Amendment to raise the debt limit “implausible.” He suggests, however, that there is some statutory authority available to the President that would enable him to “provide for contingencies” by deciding for himself in what areas government spending should be deferred in order to keep needed functions operating without borrowing money.

    He concludes:

  • July 12, 2011

    Jonathan Rauch, in a guest post for The Dish by Andrew Sullivan, joins the discussion over a constitutional solution to the ongoing struggle in Washington to reach a deal to allow the nation to continue paying its debts. He writes that since conservatives are dismissively responding to “the 14th-Amendment option,” be believes there might be something to it.

    Rauch states:

    As you have probably heard, the 14th Amendment says, "The validity of the public debt of the United States...shall not be questioned." In a post-Civil War context, the amendment's framers sought to prevent some political faction—at that time, the South—from refusing to let the government repay its debts. The basic idea of not letting politics hold the debt hostage is certainly relevant to what's happening today, although obviously the situation is different. In any case, whatever the particulars of the amendment's adoption, it clearly suggests that meeting our debt obligations is a constitutional imperative, not merely a statutory one. Otherwise, of course, the amendment wouldn't be there.

    As noted in this post, leading constitutional law experts, such as Harvard’s Laurence H. Tribe and Yale’s Jack Balkin have weighed in on the 14th Amendment and the budget crisis.

    In his column for The New York Times, Tribe writes:

    The Constitution grants only Congress — not the president — the power “to borrow money on the credit of the United States.” Nothing in the 14th Amendment or in any other constitutional provision suggests that the president may usurp legislative power to prevent a violation of the Constitution. Moreover, it is well established that the president’s power drops to what Justice Robert H. Jackson called its “lowest ebb” when exercised against the express will of Congress.

    But Rauch says the “dismissers” of the 14th Amendment option are acting, well, too dismissively.  

    “When push comes to shove, therefore, and August 2 or some other drop-dead date comes around, does the 14th Amendment trump the debt-limit statute? I would think so,” Rauch writes. “At a minimum, it gives President Obama a compelling case to keep servicing the debt. After all, in the current environment, even a temporary default could have severe economic consequences. Worse, it might be one of those moments in a country's history that frame a turning point in the narrative. "Deadbeat U.S.A.!" Reversing the damage to the country's psyche and image might take years, or forever. Lemme tell you, China isn't about to default.”