Home Budget, Economy How Pres. Obama Should Deal with the Debt-Ceiling Round 2

How Pres. Obama Should Deal with the Debt-Ceiling Round 2


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Last week I submitted this piece to the Washington Post articulating the strategy I think President Obama should use in dealing with the problem of the debt-ceiling and the Republicans. In the days since, it has become clear that — although the President has made many of the same rhetorical points that I recommended — he will not be taking the approach I proposed.  Overtaken by events, this piece will therefor not be appearing in the Post.

But I’d like to share it here with you anyway. Time will tell how well the President’s decision on strategy works out.

Republicans in Congress are once again poised to damage their country with a threat to default on the nation’s debt. It’s time for President Obama to neutralize this threat with one of his own.

First, President Obama could remind Americans of some basic points about the debt ceiling:

• The debt ceiling isn’t about spending. The money has already been spent (by Congress). This is about paying our bills.

• Responsible people — and responsible nations — pay their bills.

• The United States benefits from an impeccable record for paying its bills. That’s why the U.S. can borrow at low interest rates.

• If Republicans carried out their threat and made us default on our credit, they would seriously damage America’s financial standing, thereby costing American taxpayers billions of dollars. That irresponsibility could also damage the world economy and plunge us back into recession – adding to the federal deficit, which they claim to care about.

• Last time Republicans used the debt ceiling to extort concessions, the mere threat damaged our economic recovery.

Having given the facts, the President could say:

“Congress has exercised its power on the debt ceiling over eighty times in recent generations, but never until last year had any Congress seriously balked at raising the debt ceiling. The power not to pay our bills, which Republicans in Congress have insisted on keeping, can be exercised only in ways that damage the nation.

“In addition, today’s congressional Republicans can put a president in an impossible situation — required to pay out money to execute laws duly passed by Congress but forbidden to spend that same money because that would require borrowing beyond the current debt limit. One way or another, the president would be acting illegally.

“There’s something wrong about a power that cannot be used without damaging the nation and that compels the president to act illegally.

“When Republicans threaten to drive the nation into default, unless their demands are met, they compel us to make one of two terrible choices:

“We can give in to blackmail, which we as a nation say should never be done. (The U.S. has always declared that we don’t negotiate with terrorists. And isn’t this political terrorism?)

“Or we can refuse to meet the blackmailers’ demands and wait to see whether the hostage-takers kill the hostage.

“Policy by extortion is not how a healthy democracy operates. A great nation cannot chart a proper course if its political leaders are forced to choose either to give in to blackmail or to expose the nation to the real harm the blackmailer is threatening to inflict.

“This abuse of the debt ceiling process has led thoughtful people to re-examine its legality, and fortunately, a strong case can be made that this whole debt-ceiling arrangement is unconstitutional.”

Here the president could summarize an argument articulated by various constitutional authorities: A clause in the 14th Amendment (“The validity of the public debt of the United States, … shall not be questioned”) can be construed to mean that Congress is forbidden from doing what the Republicans are threatening to do. If the U.S. is constitutionally required to make good on its debt obligations, then Congress cannot, legally, force the nation into default.

Finally, the president could make his counter-threat.

“I have said that I will not negotiate about the debt ceiling. I will not allow the debt ceiling issue to be used to extort concessions that could not be won by legitimate political means. Let me now underscore my determination not to allow such blackmail to become a plague on our political system.

“I declare that if Congress fails to raise the debt ceiling to pay for bills already incurred, I will declare Congress’ claimed debt ceiling powers to be unconstitutional and will simply pay the bills, as the 14th Amendment arguably requires that I do.

“I do not welcome a constitutional clash. Because Congress had always acted responsibly, the current arrangement — whether constitutional or not — has worked, and there’s been no reason to challenge it. But a new and destructive practice has been inaugurated by congressional Republicans. It is my responsibility to use every constitutional power available to me to protect the nation.

“Congress can raise the debt limit, or I will act. If the Republicans want to take the matter to the Supreme Court, I will be glad for the opportunity to argue that the Constitution does not give Congress the power to destroy the good faith and credit of the United States but rather gives me the power to protect it.”

The advantages of this strategy for President Obama — making this counter-threat rather than either acquiescing to the status quo or taking unilateral action — are two-fold. It would make the Republicans the ones responsible for precipitating a constitutional showdown, should there be one. And it would focus Americans’ attention on the destructive nature of the power the Republicans are claiming and threatening to exercise.

President Obama has a winning hand. America needs him to play it.

Andy Schmookler, formerly a candidate for Congress in Virginia, is the author of The Parable of the Tribes: The Problem of Power in Social Evolution.  


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