House Republicans show no sign of releasing the hostages, continuing their threat to try to force the United States into defaulting on its obligations for the first time in history. We hope that President Joe Biden will continue to treat the debt ceiling as non-negotiable, in particular because losing his nerve now would only encourage a repeat of this mess in the very near future, with Republicans inevitably expanding their demands in each successive manufactured crisis.
If Republicans refuse to see reason, the least-bad possible outcome—among a range of outcomes that would all be rightly described as constitutional and economic crises of epic proportions—would be for President Biden to follow the advice that we have been offering since he was Barack Obama’s vice president: continue to pay the bills in full and on time, borrowing from the Federal Reserve or in the private bond markets the amounts necessary to cover the country’s obligations.
Although we have offered our analysis countless times, we have not often emphasized a key point about our advice: What we are telling the President to do is exactly what Treasury would be doing on any normal day. When the debt ceiling does not purport to limit borrowing, after all, the Treasury Department simply goes about its business as it always does. The only thing that would make continuing to do so in any way controversial is the utterly arbitrary and completely unnecessary statute that purports to limit debt.
And to take it all to the next level of absurdity, the debt ceiling cannot even stop the debt from rising—not if we use magic platinum coins or consol bonds, and not if we stiff people who are legally owed money by the federal government. Borrowing in the standard way would increase debt, but so would any of the proposed workarounds. We face a wholly contrived crisis that cannot even achieve what Republicans claim they want to achieve. They are engaged in empty virtue signaling, and they are willing to tank the Constitution and the global economy along the way.
Today, however, we want to look at the conventional wisdom, which holds that the President could not possibly follow the Buchanan-Dorf advice but must stop borrowing what is needed to pay the bills, leaving some unlucky people with promises that they might get their money “when the crisis is resolved,” or something vague like that. These people did not sign up to be the country’s new creditors, but they would be forced to wait, even if they will not be able to pay their own bills if the money to which they are entitled does not arrive when the law requires it to arrive.
But who would those people be? How would they be chosen to join the unlucky group of involuntary creditors. Chosen by whom? The answer to that last question should terrify Republicans, because it is none other than Joe Biden himself. Today, therefore, we ask: What if President Joseph R. Biden, Jr., ignores us and starts to stiff people, but the person who makes the decisions is not good old Uncle Joe but … Dark Brandon?
The Dark Brandon Phenomenon Comes to Government Budgeting
For those readers who might be even less clued into popular culture than we are, Dark Brandon is an online meme that originated as a mashup of a misheard expletive and the Trump-adjacent neo-Nazi aesthetic but was ironically repurposed by Joe Biden’s supporters to do what was seemingly impossible: the meme made an octogenarian with halting speech and bad Dad jokes into a cool guy in aviator shades. Joe Biden’s alter ego is, to use slightly saltier language than we usually use (in public), a badass!
Why does that matter here? The dry version of the budgeting story, which we have been exploring in our academic and online writing for over twelve years, is that refusing to pay the bills gives the President too much power. We often refer to setting spending and taxing levels as “quintessentially legislative in nature,” because doing so involves tradeoffs and balancing acts that are the result of budget negotiations. The result of that process is enacted into law, and as the leader of the executive branch, the President’s duty is to carry out that law. Were he ever to substitute his judgment for the legislative branch’s decisions, he would be seizing power that is not his.
As a result, not paying the bills is a much worse violation of the separation of powers than continuing to borrow as much as is needed to pay those bills. If Congress wants to undo the resulting debt, it can do so in subsequent years. For Biden to borrow the money to keep paying the bills is—and we intend it to be—the most prudent, modest, judicious exercise of minimal power possible.
It should, therefore, be unacceptable for anyone to say that one party in Congress can refuse to change the debt ceiling law in a way that gives the President more power, to change people’s lives and change the country’s priorities without input from the people’s representatives. Far from engaging in a “power grab,” for the President to refuse to take on such powers would be an act of statesmanship and fealty to the founding principles of the country.
Having the President—any President—usurp the power of the purse should thus be unthinkable, no matter which political party is in power. But particularly in the context of current American politics, why in the world would Republicans want to give Biden such unimaginable power?
Or again, why would they ever give Dark Brandon that power? Republicans and their apologists are mostly saying that Biden should negotiate a “compromise” between partial and utter capitulation to their unreasonable demands without mentioning a Plan B. However, they do appear to have one that involves the President not paying all of the nation’s bills. Oddly, though, here is what they are not saying: that the President should simply pay all bills when they come due so long as there is money and delay payment on whatever bills come in after that; as additional revenue from taxes and other sources arrives, the administration would pay the most overdue bills first, sinking further behind each day but employing a relatively mechanical chronological method to decide who gets paid. Instead, Republicans apparently want Biden to “prioritize,” protecting certain categories of payees (such as bondholders) at the expense of others.
As it happens, it might not even be possible to prioritize payments in that way, because of how payments and revenues are timed. But what if it were? Who gets to do the prioritizing? Again, why not Dark Brandon?
Admittedly, we are amused by this prospect, but the point is deadly serious. The prioritizer-in-chief could say something like this: “You know what, Jack, I’ve spent my whole life trying to be nice to my political adversaries, respecting the limits on all politicians’ power, including the President’s. But now, those ingrates on the Republican side have handed me the keys to the country’s Corvette, and I’m gonna take it for a ride!”
What Would Aggressive Prioritizing Look Like?
Consider the breadth of the choices at Dark Brandon’s fingertips. Although Republicans would scream bloody murder if military projects went unpaid, the fact is that the Pentagon on a regular basis asks for less money than Congress ultimately gives it, forcing the military to build weapons it does not need. Dark Brandon could say: “No more of that malarkey! I listen to my generals, not to some Congressnobody who just wants to waste everyone’s money.”
How about agribusiness subsidies, corporate welfare, public spending on overpriced pharmaceuticals—or congressional salaries? Dark Brandon might even look into the Tax Code and cancel things like the carried interest loophole, which allows hedge fund managers to pay less than their fair share in taxes. And although it would be unconstitutional to deliberately aim at red states or the districts of particularly disfavored members of Congress (good luck, northwest Georgia), as Dark Brandon starts to feel his oats, he might even hint that he was shading his decisions in a politically punitive way. Without ever admitting it, of course, but with a knowing wink.
Despite the White House’s playful embrace of the Dark Brandon meme, we have no reason to think that President Biden would ever do any of those aggressive things. The problem, however, is that Republicans are going to think that he is prioritizing for partisan gain even when he shows restraint. Given their recent obsessions, they might even try to claim that the spending cuts are all being hidden on Hunter Biden’s laptop.
Although Republicans would be delusional in saying so, the problem is real: once the appropriations and tax laws have taken effect, the President has no business prioritizing anything. The President’s choices if he prioritizes would and should be second-guessed. Even if the President wanted to stay in his lane, Congress would have forced him to swerve.
The Supreme Court Could Not Solve This Problem
What about the Supreme Court? Again, as a matter of apolitical priors, no one on the Court should want to give a President the ability to become a super-legislature and rewrite the laws. But given that six of the nine current Justices owe their seats to a highly partisan selection process, it is imaginable that they might take a case and order the President to prioritize spending. Even that, however, would not help Republicans.
Let us imagine that the White House follows the Buchanan-Dorf plan and tells the Treasury to keep calm and carry on. Republicans immediately run to a friendly federal district court (almost certainly in Texas), receive a ruling that the President has violated the law (which would be true, as far as it goes, given that he will face a trilemma). The Fifth Circuit summarily affirms, and the case goes to the high Court. Given how much faster markets move than litigation does, it would almost certainly be moot by then, but stay with us.
The Court, having blown past standing issues, the political question doctrine, and every other limitation that should have kept them out of the fray, decides to say that the President can no longer issue new Treasury securities. That merely puts the President back into the same trilemma, because the other two options are still illegal. The Court’s imprudent Republican-appointed majority thus must say that the right way to resolve the trilemma is for the President to stiff some people. Who should those people be?
Certainly, even the Court’s most arrogant members (and there are plenty of them) would not themselves want to take on the role of prioritizing the nation’s bills. They lack the resources and the knowledge, even if they would not admit the latter out loud. They might invoke some broad categories, but that would be the most that they could do. They would thus be left to say something like this:
We hold that the President must pay in full all military-related bills, all principal and interest on the debt as it comes due, all Social Security payments, and all judicial salaries. He must then decide among the remaining bills which to pay in full, which to pay in part, and which not to pay until the crisis is over and full funding is restored.
It is true that the Court could instead issue a ruling requiring the President to do the opposite of prioritizing, paying bills in the order in which they are due. As we noted above, that might in fact be the only practical way for Treasury to make less than full payments, but the Court could (assuming it ever dives into all of this) explicitly limit the President’s power and thus send Dark Brandon packing.
Indeed, the Court would be all but required to order that payments be made on a first-come-first-served basis until the cash runs out, because Congress has not delegated to the President the authority to prioritize payments nor ever offered anything resembling an intelligible principle by which to guide the exercise of such a delegation of power to the President. The Court could not order prioritization without violating two principles of administrative law that the conservative supermajority has lately extolled: the major questions doctrine and the nondelegation doctrine. At most, then, the Court could limit the President only by making the process mechanical.
Yet a first-come-first-served order would create the precise situation that Republicans claim to be trying to avoid. Based on a very narrow reading of the Fourteenth Amendment, they are the ones who have said that the President must make full and timely payments to the holders of Treasury bonds—including, oddly enough, all of the foreign holders of bonds, including the Chinese government—and to stop making payments to, say, hospitals serving elderly patients covered by Medicare.
Because so much of the current situation is a matter of posturing and bluffing, however, the immediate question is how President Biden can get Republicans to back down. He might do the trick by putting on his sunglasses, smiling into the camera, and saying, “Republicans want to give me the power to do things my way? Bring it on!”
