October 14, 2013
Private: The Constitutional Stakes in the Debt Ceiling Brinkmanship
Debt Ceiling, Fourteenth Amendment, Professor Peter Shane
by Peter M. Shane, Jacob E. Davis & Jacob E. Davis II Chair in Law, Moritz College of Law, Ohio State University
If you don’t think the current government shutdown and fight over the debt ceiling are a threat to constitutional government, you’re not paying attention.
In my 2009 book, Madison’s Nightmare, I described a systematic “attack on checks and balances between 1981 and 2009 [that] can very much be seen as an assault on a constitutional culture built on checks and balances norms.” Iran-Contra, the government shutdowns of 1995, the Clinton impeachment, and the efflorescence of presidential power claims under Bush 43 all exemplified that attack. Each episode was rooted in “the relentless campaign of the right wing of the Republican Party since 1981 to steer the capacities of our national government towards the fulfillment of a conservative social, economic and foreign policy agenda.”
The Republican minority in the Senate and the current GOP House majority are now intensifying that campaign. Its results portend disaster for checks and balances. Not only does the effort hurt the economy and undermine the quality of government service, but the GOP’s hostility towards interbranch accommodation positions the president so that he (or his successors) will be more likely to respond with initiatives that can only further corrode an institutional culture of self-restraint that is essential to constitutional government.
Consider, in this respect, the debt limit imbroglio. Scholars and other commentators have advanced at least five options for a presidential response should Congress not raise the debt limit.
One is the trillion-dollar coin option. The Treasury would use its facially unlimited statutory power to mint coins to create a platinum coin in a large enough denomination to avoid default and deposit it in the government’s account in the Fed. The obvious problem with this option, which the administration has already foresworn, is that the statute’s plain purpose is to authorize the minting of commemorative coins. Congress could not plausibly have intended the Treasury to use its mint authority to augment the government’s borrowing capacity. Just as bad, it might be seen as compromising the independence of the Fed, which is indispensable to its credibility.
A second is the Fourteenth Amendment option. The president would declare the debt limit statute unconstitutional and thus inoperable at the point of default because in violation of the Fourteenth Amendment command: “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.” The obvious problem here, as compelling as the historically based claim may be, is that, even if the president’s constitutional judgment is correct, it is not clear that the Fourteenth Amendment authorizes the president to create a remedy. The White House has foresworn this option also.
A third option would be some form of prioritization. The president could claim authority under the Impoundment Control Act to defer government spending other than paying off debt in such amounts as necessary to avoid further borrowing. He would presumably cite as his legal authority 2 U.S.C. sec. 684(b)(1), which authorizes deferrals to the end of the current fiscal year "to provide for contingencies." Of course, it would be odd to use the Impoundment Control Act to impose what would amount to the most ambitious presidential impoundment in history. It would be turning the Impoundment Control Act on its head.
A fourth option would be a claim of some emergency authority inherent in the Constitution’s grant of “executive power.” As suggested by Eric Posner: “[T]he president can declare an emergency and justify borrowing by citing reasons of state. . . .The president could invoke his ‘inherent’ executive powers under Article II of the Constitution (which vests the president with mostly undefined ‘executive’ powers).” Unfortunately, there would be no obvious limit to the reach of such a precedent. The argument that the Vesting Clause gives the president any robust set of unspecified domestic powers is dubious, to say the least, and Professor Posner’s suggestion could easily give root to a practice of presidential decrees utterly antithetical to a separation of powers.
Finally, the option I and others would favor – but which itself would also be audacious – is what I call the “faithful execution” option. Professors Neil Buchanan and Michael Dorf have called this the “least unconstitutional” option, but I believe it would not be unconstitutional at all – just destabilizing. Its premise is that Congress’s failure to raise the debt ceiling would leave the president with two irreconcilable demands – carry out Congress’s spending instructions as contained in current appropriations laws, but do not borrow money sufficient to carry out those instructions and repay debts already incurred. It is as if he were told to drive simultaneously no faster than 45 miles per hour and no slower than 60. The president cannot do both.
The solution under this option would be to interpret the appropriations laws as implicitly authorizing sufficient borrowing to allow the president to both carry out those laws and to repay U.S. debts on time, notwithstanding the debt limit statute. Better he ignore one instruction than many, especially since ignoring many would involve making a host of budgetary prioritization decisions that are plainly matters for Congress, not the president.
Of course, were the president to pursue this option – or any of the others – it would likely remove any incentive for Congress ever again to legislate responsibly regarding a debt ceiling. It would also no doubt fuel calls for the president’s impeachment, which is currently a right-wing fantasy looking for a plausible legal hook. And thus the decline in our pre-1981 culture of interbranch accommodation would accelerate. What one commentator has written about the trillion dollar coin option is only a slightly exaggerated assessment that applies to any unilateral presidential move to get Congress out of its hole: “It would effectively mark the demise of the three-branch system of government, by allowing the executive branch to simply steamroller the rights and privileges of the legislative branch.”
A British Prime Minister, Lord John Russell, famously observed: "Every political constitution in which different bodies share the supreme power is only enabled to exist by the forbearance of those among whom this power is distributed." Under the U.S. Constitution, the supreme power supposedly belongs to “the People,” but the absence of forbearance threatens to render them effectively powerless. If Congress does not relent, believe me, things will get worse.