It appears that another Republican-created Washington crisis is fast approaching: another replay of the previous fight over raising the limit on the government’s borrowing under the debt-ceiling statute. Readers will recall that a similar crisis did not play out well the last time, during the summer of 2011, when the USA’s credit rating was lowered because of the manner in which Republicans handled the crisis. (Credit-rating analysts do not think highly of Republicans’ taking the American economy hostage as a negotiating tactic.) The only person who seems to have benefited from the crisis was Bob Woodward, who got a good book—The Price of Politics—out of this forty-four-day debt- ceiling deadline debacle.
Now, we may be about to do it all again. This time, however, President Obama has said that he will not play the GOP’s game. Rather, on repeated occasions, he has announced that he will not negotiate with Republicans over the debt-ceiling limit. On the GOP side, meanwhile, Speaker John Boehner has declared that the House of Representatives will not raise the debt-ceiling limit without dollar-for-dollar (1:1) cuts in spending, although the GOP refuses to indicate the specific spending that they want cut. A few GOP Senators are supporting Boehner as well.
If both sides remain adamant, as they are right now, we will enter into unchartered territory.
The Impact Of Failing To Raise The Debt-Ceiling Limit
Secretary of the Treasury Tim Geithner has announced that we have already hit the current debt ceiling, but he can continue to honor the full faith and credit of the United States by shuffling funds from different accounts until sometime around Valentine’s Day (February 14, 2013), if not possibly a few weeks longer. But the latest estimated drop-dead date is the end of February, 2013.
No one knows exactly what will happen if Republicans refuse to raise the debt ceiling before then. When they last threatened to not raise it, Wall Street foresaw a “catastrophic financial crisis;” the head of the Federal Reserve, Ben Bernanke, predicted “a calamitous outcome;” and Princeton economist and New York Times columnist Paul Krugman said it would have “dire consequences” for the financial recovery—and these were the more optimistic views.
Since the super-committee created by Congress to solve the last standoff failed to work out appropriate cuts, across-the-board spending cuts of $1.2 trillion over 10 years (called “sequestration,” which contain cuts that were considered so severe that Congress would act responsibly to adjust them and specify which cuts and where) will go into effect this year. The impact of sequestration was quietly softened in the back-room deals made over the New Year’s holiday, while Congress was in session, to avoid the GOP-created crisis of the so-called “fiscal cliff,” when the automatic cuts in the defense budget were trimmed. Washington insiders, like Tom Harrison of the Center for Strategic And Budgetary Assessments, believe that this adjusted sequestration will actually become law, because no other deal will be reached.
As for the debt-ceiling limit, no one can be certain how far the Republicans will push their brinksmanship. It is well understood that the Tea Party and its radical conservatives who have infected the GOP make guessing what will occur quite unpredictable. In short, even if Minority Leader Nancy Pelosi, along with a few sane Republicans, get the House to raise the debt ceiling (as was done with the fiscal cliff), there are a few Republican wackos in the Senate who could prevent the bill they pass from becoming law.
Notwithstanding all the analysis of the problems of raising the debt ceiling in August 2011, there was virtually no examination then of the legal implication of this situation. But this dearth of legal analysis has been remedied, and if Republicans were to refuse to raise the debt ceiling, it would create a unique constitutional predicament for President Obama.
The Constitutional and Legal Problems That Will Arise If the Debt Ceiling Is Not Raised
Thankfully, Justia columnists Neil Buchanan and Michael Dorf have written an important and timely article for the October 2012 Columbia Law Review, “How To Choose The Least Unconstitutional Option: Lessons For The President (And Others) From The Debt Ceiling Standoff.” Their article examines the constitutional situation that confronted President Obama, and his options, when it appeared during the summer of 2011 when Congress threatened to refuse to raise the “debt ceiling” limits. It wasn’t pretty.
Nonetheless, here we are again. So Buchanan and Dorf have added a sidebar to their earlier work: “Nullifying the Debt Ceiling Threat Once and for All: Why the President Should Embrace the Least Unconstitutional Option.” Michael Dorf also provided an overview of their work in his January 8, 2013, Verdict column.
Given the potentially devastating world-wide economic consequences that might result from a Congress crazy enough to refuse to raise the debt limit, it seems reasonable to also wonder if that Congress would try, in addition, to impeach and remove President Obama if he broke the law in order to prevent the United States from defaulting, and avoid a financial catastrophe. Or perhaps even if he failed to act as they thought was called for.
It is doubtful that many Members of Congress have thought about the legal consequences of their actions with regard to the debt ceiling, and frankly, I hope they DO NOT read Buchanan and Dorf’s analysis. On the other hand, I do hope that the Obama White House and Justice Department will study this material carefully. (Author’s Note To Neil and Mike: Please forward copies or URLs to all the appropriate parties.)
Based on what I have read, along with conversations I have had with folks in Washington, it appears that many officials think that the President can still operate the government if the dept ceiling is not raised, by simply trimming spending. Buchanan and Dorf explain why this is not correct.
Others have suggested that the President might unilaterally impose new taxes to raise revenue. This, too, is unconstitutional.
Buchanan and Dorf also explain why the debt ceiling cannot be ignored under arcane words addressing the nation’s credit in the Fourteenth Amendment, and they provide serious second thoughts for those who want to bolster our Treasury to avoid the debt ceiling by relying on the language of a statute that gives the Secretary of Treasury the authority to mint ceremonial coins, and are calling for him to simply add a couple trillion dollar coins to the Treasury to cover the debt-ceiling shortfall. In short, Buchanan and Dorf have provided a real-world legal and constitutional view of the debt-ceiling issues.
President Obama’s Constitutional Trilemma
The core of the Buchanan and Dorf study, which I recommend to anyone interested in this situation, focuses on the constitutional impact on the President if Congress fails to increase the debt limit. They explain the interplay and interaction of appropriations laws (those governing spending), the tax laws (those governing revenue) and the debt-ceiling statute. The bottom line is that if the debt ceiling is not adjusted to comply with spending and tax laws, it will create “an unsolvable problem” for President Obama, who has the Constitutional duty (under Article II, Section 3) to “take Care that the Laws be faithfully executed.” The President, by oath, has pledged to honor the spending laws, the tax laws, and the debt ceiling, but when these three bodies of law are incompatible, he has no constitutional option. Buchanan and Dorf’s hypothetical illustrates the problem:
“[I]f Congress were to authorize spending that exceeds tax collections by one trillion dollars in a year, at a time when the existing federal debt is only one-half trillion dollars below its statutory ceiling, then the president could not execute all three laws as written. Faced with that impossible choice, the president risks acting unconstitutionally no matter what he might do, because he will have failed to execute at least one duly enacted law of the United States. He thus faces a ‘trilemma:’ a choice between three bad options, all of which are unconstitutional.”
If the president ignores the debt ceiling and issues new bonds to raise revenue, he has unconstitutionally usurped the exclusive power of Congress to borrow money—not to mention violated the debt ceiling law. A president cannot raise taxes without usurping the exclusive constitutional power of Congress to tax. A president cannot cut spending without violating the constitutional power of Congress to control spending. As for claims that the debt ceiling itself is unconstitutional, Buchanan and Dorf cast serious doubt on the Fourteenth Amendment arguments, while noting that the Obama White House has rejected this argument. As for minting trillion-dollar coins, while that would not be illegal, Buchanan and Dorf believe “that serious commentators would be wise to disregard” this argument, for such coins are “so cartoonish,” if not “desperate” and gimmicky that they might undermine faith in the nation’s ability to pay its debts.
Given the fact that refusal to raise the debt ceiling will give the President no constitutional or legal options, this raises the fundamental question of what should he do, and can he be impeached if he does nothing, which would violate his responsibility to faithfully execute the laws, or if he does anything, given the fact he will be violating the law, and acting in an unconstitutional manner.
The reason I hope that the Republicans in Congress never read the Buchanan and Dorf analysis is because it may give them thoughts about how to checkmate President Obama into an impeachable offense.
Can a President With No Constitutional Options Be Impeached as a Result?
My co-columnists have presented a fascinating argument for how a president might best proceed if Congress refuses to increase the debt ceiling. Drawing on a famous July 1861 speech by Abraham Lincoln to Congress—whose extra-constitutional actions during the Civil War many believe saved the Union—they outline why President Obama should choose his “least unconstitutional option,” which in this instance would be to ignore the debt-ceiling statute. Buchanan and Dorf explain why, under the circumstances, this is the least unconstitutional approach—and, as such, the most sound and reasonable course of action.
Buchanan and Dorf do not really address the issue of impeachment. Yet there is no question that President Obama would be operating outside the law, which clearly could subject him to impeachment for simply carrying out his constitutional duties, which most likely would be to try to avert a financial catastrophe. Moreover, the President would be violating the duties of his office if he failed to act, and simply did nothing.
There’s no question in my mind, particularly after witnessing at close hand what happened to former President Bill Clinton, when the radical conservative Republicans in the House impeached him. Republicans who are foolish enough to decline to raise the debt ceiling would have no problem proceeding to impeach President Obama in order to divert attention from the disaster they would create. These are people who want to destroy the federal government. Former President Gerald Ford, when serving as Minority Leader of the House of Representatives, observed that the House of Representatives can impeach a ham sandwich, just for being a ham sandwich. In short, impeachable offenses are whatever a majority of the House of Representatives declares them to be.
While impeachment in that House is easy, conviction and removal of a President in the Senate is another story. To build a defense, the Obama White House should carefully study Parts II and III of the Buchanan and Dorf October article, for if the wacko and crazy Republicans failed to raise the debt limit, and then impeach President Obama for however he responds to his trilemma, then Buchanan and Dorf,s work provide a guide. The President should also hire Buchanan and Dorf to defend his actions in the Senate, and explain why he has followed their advice and taken the least unconstitutional action to defend the Constitution itself.
But with all due respect to my columnist colleagues, I sincerely hope they’re not called upon to argue the president’s case before the U.S. Senate. Yet their mapping of this unchartered territory should be studied closely by the Obama White House, just in case.
Clearly, failure by the Republicans to raise the debt ceiling would be a wrenching headache for President Obama. But in the long term, it could bring an end to the radical conservatism of the contemporary Republican Party, because Wall Street, and other GOP money sources, will have suffered so deeply from such foolishness that I am confident these people will cut them off forever.