The Trump transition has been much like the Trump campaign. It is never quite clear what is going on within the chaotic blur, mostly because it is never clear what Trump himself is really thinking.
With such uncertainty, however, should come at least a sliver of hope. After all, given that Trump has not committed to anything, and given that he continues to change his stated views on an almost daily basis, he could ultimately (maybe even quite accidentally) find his way toward a good policy or two. Yet there has never been any doubt that he is always choosing between bad and worse policies.
Making all of this even more difficult to follow is the daily drama that Republicans are living. The party is still largely represented in Congress by people who either opposed Trump openly or merely offered “I support my party’s candidate, no matter who it is” evasions during the general election. Republican factions are now fighting it out to determine who is really in charge.
More importantly, various groups of Republicans are all trying to see which of their policies Trump will support. Gut the ethics laws? Trump is not actually against it, but he is willing to humiliate Republicans by saying that they should have higher priorities. This increases the risk level for Republicans who might have the temerity to do something without clearing it with their leader.
The Return of Debt Ceiling Insanity?
Despite all of this, the one thing that I was absolutely sure I would never have to write about again is the debt ceiling. When Hillary Clinton lost the Electoral College vote, I assumed that our long national debt-ceiling nightmare was over, because Republicans would not want to put their president in the position of facing a global debt crisis. But perhaps I was being too optimistic.
In a way, I should not complain. The debt ceiling has been very good to me professionally. I published a book of essays on that topic in 2013, and Michael Dorf and I have co-authored a series of law review articles in which we explored the ramifications of congressional Republicans’ hostage-taking actions regarding the debt ceiling since 2011.
Even so, the debt ceiling should never have been a big deal in the first place. As I have explained multiple times, that statute is unconstitutional for several reasons. More to the point, however, brinkmanship regarding the debt ceiling is economically reckless and potentially catastrophic. It should never have been used as a political bargaining chip.
And why would Republicans make Trump’s life more difficult by not raising the debt ceiling? After all, their strategy was created entirely to make Barack Obama’s life miserable. They wanted to force him to agree to further spending cuts, outside of the normal budget process. Putting him in a constitutional bind was an added bonus.
Similarly, it was entirely predictable that Republicans would have continued to use the debt ceiling as a cudgel against a President Hillary Clinton. They would have gladly tormented her by creating a political crisis that could have destroyed the global economy.
Again, why would they do the same thing to Trump? The short answer is that Republicans will probably figure out a way to avoid the kind of disaster that I am going to describe below. In part, this is a matter of being afraid of Trump’s Twitter-wrath. It might also be that the slightly more sane voices in the party could finally convince the congressional extremists not to strap on the fiscal explosives once again.
But the simple fact is that there are still a lot of true believers in the Republican caucus, people who are political animals but who see the whole notion of compromising their principles as an abject moral failure. And as incoherent as it is, Republicans’ hatred of government spending and borrowing is a bedrock element of their policy views.
Under such circumstances, and given the economic realities that the country faces, it is thus still possible that a group of Republican hyper-extremists will use the debt ceiling in a way that would force Trump to make some fateful choices.
The Ugly Politics of Blind Ideology and Payback
During the Obama years, Republicans were united in their opposition to everything that the Administration proposed. Once Republicans took over the majority in the House after the 2010 midterm elections, they used various parliamentary maneuvers to make sure that even popular and necessary legislation would not pass.
The debt ceiling law is inherently flawed in a number of ways, but one of its worst aspects is that it requires Congress to vote to increase the debt ceiling even when debt is rising for perfectly understandable reasons (such as a global crisis like the Great Recession). The process of voting to increase the debt ceiling is unpredictable, and in practice it has resulted in the need to increase the debt ceiling every year or so. This necessity creates leverage for a determined group of ideologues.
Because Democrats in the House were willing to vote to increase the debt ceiling in order to avoid a disaster, it has only been necessary to find two or three dozen Republicans at various times to pass a debt ceiling increase. Even that proved to be difficult, however, because so many Republicans were on the record as saying that they would never vote to increase the debt ceiling. Those Republicans who had not vowed to do so were still reluctant, moreover, because they feared losing their seats to primary challengers.
Even so, the more responsible members of the House leadership only had to “top up” the Democrats’ votes with just enough Republican votes to pass the necessary legislation. A bit of arm-twisting (as well as the help of a few retiring congressmen) was ultimately enough to avoid disaster each time the issue arose.
What now? The debt ceiling is going to be reached early this year. (For technical reasons, the drop-dead date cannot be known with certainly, but it will be sometime after March 15 and probably before June 1.) The spending and taxing bills that Congress has already enacted guarantee that we will need to borrow more money in order to meet our obligations.
A vote to increase the debt ceiling will thus be necessary quite soon. How will that vote work?
The Democrats certainly have every reason to enjoy the payback of karma. Why should they support Trump as he tries to avoid the fate that the Republicans threatened to inflict on Obama? They will surely want to force Republicans finally to show that they can be grownups and take responsibility by taking votes that are easy to demagogue. (“He voted to increase the debt ceiling. He hates our children and grandchildren!”)
In a column last month, I briefly mentioned the possibility that the Democrats could use a debt-ceiling fight to extract some concessions from Trump. But it is possible that they will conclude that they cannot trust Trump’s promises, such that they would opt out of negotiations and leave the problem to be dealt with by Republicans.
If the Democrats refuse to play ball, the numbers become stark for the Republicans. In a 435-seat house, a bill needs 218 votes to pass. Currently, there are 241 Republicans and 194 Democrats in the House. The Senate is split 52-48, but I will focus here on the House, because of various differences in the cultures and rules of the two chambers.
If as few as twenty-four House Republicans joined all of the Democrats to oppose a debt ceiling increase, therefore, the bill would fail. With more than two dozen House members committed to the archconservative Freedom Caucus, this becomes a very real possibility.
Again, it is possible that the Republicans could find a way to line up 218 votes to avoid a disaster. Trump chose as his budget director a congressman with a record of opposing increases in the debt ceiling. Maybe he will convince enough of his extremist brethren to go along.
This game might become even easier if Republicans amp up the imaginary accounting that allows them to hide the consequences of their actions. Off-budget spending, “magic asterisks,” and all the rest are now staples of budget gimmickry. Perhaps there is a way to borrow in excess of the debt ceiling but to do so in a way that Republicans can deny that they are making it happen.
If no deal can be reached, however, Trump will have to make a decision. It is possible that he will bring back his ideas from the primary campaign to repudiate the debt of the United States, which caused more than a bit of a stir. But with Wall Street now so well represented in Trump’s incipient administration (no draining the swamp there!), the financiers might talk him out of such craziness.
Decisive Action During a Debt Ceiling Crisis
As I noted above, the debt ceiling statute is unconstitutional for a variety of reasons. This means that any president who is faced with a Congress that refuses to increase the debt ceiling can and should simply say something like this: “It is not the president’s responsibility to obey unconstitutional laws. Therefore, no matter whether or not Congress increases the debt ceiling, I will obey my oath of office and pay the nation’s bills in full and on time.”
Despite entreaties from people like Professor Dorf and me, the Obama Administration convinced itself that it could not risk taking such an action. Ever cautious, Obama simply refused to say what he would do if Republicans were so irresponsible as to block an increase in the debt ceiling. While they fulminated, he would wait them out.
No one has ever used the word “cautious” in describing Donald Trump. If someone tells him that Congress is trying to put him in a bind, forcing him either to take the heat of defaulting on the nation’s bills or to ignore a law that is being held hostage by ideologues, it seems safe to bet that Trump will tell the debt-ceiling absolutists to take a hike.
And this is where I could actually see myself agreeing with Donald Trump. As the president, he will have the same responsibilities that President Obama had, which in this case means making the tough decision to tell the country that the debt ceiling law is null and void.
What would happen next? This is another area where Trump’s impetuousness could actually be an asset. Trump could simply announce, as soon as the issue arises, that the debt ceiling is a dead letter and that he will therefore instruct his Treasury Department to move forward with standard operating procedures to finance the nation’s expenditures as they come due.
By contrast, President Obama’s stare-down strategy all but guaranteed that negotiations would go down to the last second. Republicans would posture, waiting to see if Obama would blink (as he had in 2011), and only at the last second would they come up with the votes necessary to save the world.
As I wrote many times during those crises, the better strategy would have been for Obama to tell people (including the people in the financial markets) as far in advance as possible that the debt ceiling is not part of the story anymore. When bills come due, they will be paid, even if that requires borrowing above the arbitrary limit imposed by that ill-considered law.
This advance notice would give everyone the opportunity to engage in a low-stakes freakout, working through the various stages of grief until they reach acceptance. It would soon become clear that Trump would not be impeached over this issue and that Trump simply did not care about the criticism.
Once everyone realized that Republicans would have no choice but to increase the debt ceiling—or, even better, to repeal it or to make necessary increases an automatic part of every spending bill—there would be no drop-dead date and no crisis.
To be very clear, I am very unhappy about Trump’s impending presidency, as my columns over the past few months have made abundantly clear. There are plenty of things that he is likely to do that will make impeachment a necessity, although I have little hope that there are enough Republicans who have the principles and courage to make that happen.
It is also true, however, that Trump could make the right choice every now and then. What makes the decision to ignore the debt ceiling seem different is that so many people think that that statute imposes an actual limit on debt. It does not, and it only makes it possible for motivated ideologues in Congress to destroy the nation’s creditworthiness—and, oh by the way, the global economy.
If Trump is faced with a debt ceiling fight, therefore, I will be the first to say that he would be justified to pay the nation’s bills in full and on time, and to borrow the money necessary to obey his constitutional duties.