'Til Debt Do Us Part
Early in 2023, ersatz Speaker of the House Kevin McCarthy decided to stake his political future on an extortion scheme to extract budget and appropriation concessions that he could not achieve legislatively from the Biden Administration in exchange for an increase to the debt limit. President Joe Biden, knowledgeable of the differences between budgets, appropriations, and debt, as well as the role of Congress in each, insisted that the debt limit be raised without conditions. The budget and appropriations process would be separate and likely contentious, but proper nonetheless. Neither of them have moved much from their original positions as time has marched on, and we are now staring over the edge of a fiscal cliff.
McCarthy’s calculus may have cost him an opportunity to demonstrate his worthiness of the position he holds. His intransigence, indeed, his escalatory language, is making it nearly impossible for the two sides to agree on a plan to avert this self-made disaster. He could have taken advantage of Biden’s agreement to meet several weeks ago to discuss the situation, characterized it as a negotiation, and left it at that. Up to that point, Biden had said he wouldn’t talk about the budget until the Republicans presented a plan, and McCarthy finally presented something of a framework for one. Instead, McCarthy has continued to ratchet up the rhetoric to the point where he’s backed himself into a corner that Biden should be only too happy to leave him in.
It didn’t have to be this way. Most sensible people, regardless of party, can agree that our increasing national debt is unsustainable. We can probably agree that we should balance the budget (perhaps with exceptions for extraordinary circumstances). But what we can’t agree on is how to balance the budget and bring down the debt. The only means we have to balance the budget are to reduce expenses or increase revenues. Therein lies the problem. Aside from rooting out waste, fraud, and abuse, which in themselves would have a huge impact, reducing expenses requires reducing or eliminating programs that are supported by Democrats while increasing revenues requires increasing or adding taxes that are vehemently opposed by Republicans.
The budget process itself implicitly includes an adjustment to the debt limit. Having a specific debt limit authorized by Congress keeps it in front of us, so we don’t lose track of the tab we’re running. But approval of the budget renders the debt limit useless as a management tool, and makes it an impediment to fiscal stability. When approval of an increase to the debt limit is used by one party who cannot achieve its ends legitimately thru legislation to demand concessions from the other, it’s extortion. Dancing up to the line is to be expected in politics, but crossing it is unacceptable. Even dancing up to the line, as Republicans did in 2011, has dire consequences as we witnessed with the effects on our credit rating, the stock market, and our global standing.
Secretary of the Treasury Janet Yellen has recently revised her estimate of D-Day (when we hit the debt limit) to June 1. This has increased both the urgency of resolving what has become an impasse, and the dangers of careless missteps. The stakes are extremely high, and with a careless bully on one side and a seasoned institutionalist on the other, my support is for the latter.
I see one of several outcomes over the next couple of weeks, each with their own risks and consequences. They are variations of four themes: 1) Biden caves and agrees to specific concessions in exchange for a debt ceiling increase; 2) McCarthy caves and agrees to a debt ceiling increase in exchange for a promise to negotiate future concessions; 3) a debt ceiling vote is allowed thru a discharge petition; and 4) the debt ceiling is eliminated. At this point, I don’t see either of the first two as likely, since they are win-lose and the loser would be hamstrung indefinitely. While the third option remains a possibility, it requires several Republicans to join with Democrats in a mission that will likely incur the wrath of their fellow members. That leaves us with the fourth theme, elimination of the debt ceiling.
There have been many opinions written about the 14th Amendment to the Constitution, which says, in part, “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.” There is context, of course, and it may limit the applicability of this specific passage to the current dilemma. But it’s one significant argument in favor of abolishing the limit. Robert Hockett, a distinguished professor of Law at Cornell University, supports the abolition of the limit under the 14th Amendment with additional compelling reasoning. Much of his treatise, published in Forbes on May 11, 2023, relates to the construction of the law and supersedence of old antiquated law by new currently relevant law.
Invoking the 14th Amendment, supported by the arguments advanced by Hockett, may be risky, since it would almost certainly be challenged by Republicans in court. Such a challenge might advance quickly to the Supreme Court, which itself is behaving questionably these days. Nevertheless, the legal questions seem fairly clear, especially as Hockett has outlined them. The spectacle of challenging the US’s obligation to pay its bills may be enough to dissuade some Republicans from pushing back, and the Supremes, bruised by their own controversies over ethics and abandonment of settled law, may be reticent to take responsibility for the final nudge at the cliff’s edge.
While invoking the 14th Amendment carries risk, and while it may be an imperfect solution by itself, with support from additional arguments and advocacy by able litigators, it may be enough to finally put an end to this chicanery and remove an easily abused tool from a toolbox that should be filled with articles of good faith and compromise. That may be a risk worth taking.