In this second of a series of columns conducting a postmortem on the debt ceiling crisis, UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf explain why the temporary resolution of the debt ceiling crisis may result in an even higher cost when the issue arises again on January 2, 2025. Professors Buchanan and Dorf argue that the debt ceiling statute can only ever operate as a source of leverage for extortionists or, if neither side blinks, as the means of inflicting terrible damage to the country.
In this first of a series of columns conducting a postmortem on the debt ceiling crisis, UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf point out that President Biden’s debt ceiling resolution appears to have won the politics of 2023 and 2024 and sidestepped another huge crisis. However, Professors Buchanan and Dorf consider whether these short-term victories will have longer-term costs that prove even more extreme.
UF Levin College of Law professor and economist Neil H. Buchanan points out that, if we reach the drop-dead date of the debt ceiling, both options available to President Joe Biden will be unprecedented, destabilizing, and risky. Professor Buchanan argues that Biden’s least bad choice in that situation is to continue to pay the nation’s bills and that doing anything else for the sake of seeming “normal” is more dangerous for the economy and the country.
Illinois Law dean Vikram David Amar comments on the debt-ceiling controversy and argues that the left would be well-advised to engage the merits of these political and constitutional questions, rather than invoking the “the other side is unfairly trying to undo things that have already been decided” argument. Dean Amar points out that in fiscal politics and constitutional law, the status quo is not nearly as easy to identify or rigid as some would suppose, and very few decisions are truly immune from reconsideration, despite the principle of stare decisis.
UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf explain the options currently available to President Biden for handling the impending debt ceiling crisis. Professors Buchanan and Dorf argue that while the best option would have been to announce from the outset that the debt ceiling is unconstitutional, the President’s current least bad option is, if the drop-dead date arrives, to continue to pay the nation’s debts notwithstanding the debt ceiling.
UF Levin College of Law professor and economist Neil H. Buchanan responds to a recent New York Times op-ed by Professor Michael McConnell that purports to defend congressional Republicans’ posture regarding the debt ceiling. Professor Buchanan argues that Professor McConnell’s entire argument is a strawman, fails to engage with the key points it purports to counter, and provides at most only the most inadequate fig leaf for Republicans’ willingness to endanger people’s livelihoods for political gain.
UF Levin College of Law Professor Neil H. Buchanan and Cornell Law Professor Michael C. Dorf point out that if Republicans insist on using the debt ceiling to hold the economy hostage, President Joe Biden will be the one to decide which debts to prioritize. Professors Buchanan and Dorf argue that although the decision of which debts to prioritize should not belong to the President, Republicans give President Biden—or his less virtuous alter-ego “Dark Brandon”—no choice but to decide which debts to pay first, at their own risk.
UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf respond to two types of pushback from proponents of schemes to circumvent the debt ceiling. Though dubious about any such proposal, Professors Buchanan and Dorf express hope that a court would disagree and find an option—such as fallback bonds—permissible, allowing the country to avoid financial catastrophe and a constitutional crisis.
UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf continue their discussion of the assortment of illegal options President Joe Biden has available to him if Republicans refuse to raise the debt ceiling. Professors Buchanan and Dorf argue that because there are no loopholes or escape hatches in the debt ceiling statute, if put into that untenable position, President Biden should minimize the damage and simply issue normal Treasury securities—the “least unconstitutional” option.
In a mix of humor and seriousness, Cornell Law professor Michael C. Dorf imagines how Tuesdays’ meeting between President Joe Biden and House Speaker Kevin McCarthy (with Senate Minority Leader Mitch McConnell) could go. Professor Dorf explores one creative way the two sides might reach a mutually agreeable resolution.
UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf provide yet another reason against the proposal that the government should mint a multi-trillion-dollar platinum coin to avoid the impending debt ceiling crisis. Professors Buchanan and Dorf point out that if trillion-dollar platinum coins are legal to avoid a debt-ceiling crisis, that would lead to the absurd result that they would always be legal as a means of substituting modern monetary theory (MMT) for the entire apparatus of public finance.
UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf explain why the so-called platinum coin option to address the looming debt ceiling crisis is not only a bad idea but also illegal. Professors Buchanan and Dorf argue that the least unconstitutional option, if Republicans insist on crashing the economy via the debt ceiling, is for the Treasury Department to do what it always does: go into the financial markets and raise funds from willing lenders.
Cornell Law professor Michael C. Dorf explains why voters should not expect Republicans to do a better job than Democrats handling inflation and the broader economy, and in fact will likely permanently weaken the U.S. economy and the U.S. as an actor on the world stage. Professor Dorf describes why the current Republicans are different from those in the past, and why they pose a unique threat of holding the entire global economy hostage unless Congress enacts and the President signs their radically conservative agenda into law.
UF Levin College of Law professor and economist Neil H. Buchanan discusses the power and limits of financial markets by looking at three examples: (1) the brief tenure of former British Prime Minister Liz Truss, (2) the markets’ lack of response to the US federal debt, and (3) the possibly cataclysmic consequences if, after the midterms, a Republican-controlled Congress refuses to increase the federal debt ceiling.
Cornell Law professor Michael C. Dorf explains why Democrats should accept without further delay Senator Mitch McConnell’s offer of a streamlined process to pass a debt ceiling increase via the reconciliation process. Professor Dorf points out that due to opposition to filibuster reform by Democratic Senators Joe Manchin and Kyrsten Sinema, this is the only way to avoid an economic catastrophe as a result of the debt ceiling crisis.
Cornell Law professor Michael C. Dorf critiques the suggestion that the Treasury might instruct the Mint to create high-value platinum coins to pay federal obligations and avert a debt ceiling crisis. Professor Dorf argues that such action risks eroding public confidence in the very idea that money has value. He recognizes that in a democracy, government should generally trust the People with the truth but says there is sometimes a need to promote a “noble lie” for the good of society.
UF Levin College of Law professor and economist Neil H. Buchanan responds to proposals that the so-called Big Coin option could alleviate the debt ceiling crisis. Professor Buchanan argues that this option, by which the Treasury would mint a platinum coin and designate its value at some arbitrarily high number to allow the government to continue paying its bills, is likely not the best solution to the contrived problem of debt ceiling.
UF Levin College of Law professor and economist Neil H. Buchanan argues that Democrats have a clear path to eliminating the debt ceiling crisis once and for all. Professor Buchanan explains that the Democrats should employ the so-called Gephardt Rule, under which the debt ceiling is increased automatically as part of every taxing and spending bill that Congress passes.
UF Levin College of Law professor and economist Neil H. Buchanan comments on the (again) impending debt ceiling crisis if Senate Republicans (again) do not adjust the federal debt ceiling by the end of this month. Professor Buchanan reiterates the reasons the debt ceiling is unconstitutional and calls upon President Biden to instruct the Treasury Department to pay all bills in full, using exactly as much borrowed money as Congress’s duly enacted laws require, and to immediately announce that he will do so.
UF Levin College of Law professor Neil H. Buchanan reflects on the evolution of America’s political right over the past decade, from his first Verdict column almost exactly ten years ago to today. Professor Buchanan points out that his first column discussed the problem of the debt-limit crisis, which he argues was a portent for Republicans’ abandonment of ideas, now turning instead to stoking cultural clashes and fomenting grievances.