Tuesday, July 12, 2011

Political Timing, the Debt-Limit Debate, and Responsible Governing

-- Posted by Neil H. Buchanan

Last Thursday, in my first column for the new Verdict legal commentary site, I argued that the federal debt limit is unconstitutional. (I also published related Dorf on Law posts on Thursday and Friday.) On Friday, the editors of The New York Times effectively endorsed that position, but they also ran an op-ed by Harvard Law School Professor Laurence Tribe, who argued that President Obama should not invoke a constitutional argument to negate the debt limit. Because of the importance of this issue, the editors of Verdict allowed me to write a column critiquing Tribe's piece, which was published yesterday.

Although Tribe made several points in his piece, his central argument was not actually that the debt limit is constitutional. Instead, he argued that it would also violate the Constitution for Obama (after announcing that the debt limit was unconstitutional) to continue to issue debt, because only Congress can authorize the borrowing of funds in the name of the United States.

As I point out in my column, however, Congress has already authorized the borrowing and spending of the relevant funds. Say, for example, that this year's duly-enacted budget included a provision by which the government would spend $100 on Program X. If we were exactly $100 below the debt limit, the Program X provision would authorize the Treasury to borrow $100 and spend it on the program. If, on the other hand, we were exactly at the debt limit, the debt-limit statute would purport to override the authorization for Program X spending, because it would be illegal to borrow the $100 that would otherwise have been borrowed. If we remove the debt-limit statutory bar (because of its unconstitutionality), therefore, the $100 can be borrowed and spent under the law, just as it would have been were we sufficiently below the limit.

The problem with Tribe's argument, in other words, is that he assumes that Obama would have to declare a nonexistent ability to borrow more money, whereas in fact that authority has already been granted.

Like most legal scholars, I have a great deal of respect for Professor Tribe. Because of this, I was genuinely puzzled by his op-ed, the strongest part of which I have just described. I do not doubt that he sincerely believes the substance of his argument, and that he would continue to assert its validity against all comers. I simply think that he is clearly mistaken.

The more interesting aspect of this, I think, is that the content and timing of Tribe's op-ed were extremely fortuitous for the Obama Administration, as I will explain below.

(I should add that I have met Tribe once, about 20 years ago -- before I even knew that I would go to law school -- and I have not been in contact with him since. While my co-blogger Professor Dorf is a Tribe protege, I have received no special insights from Mike about Professor Tribe's thinking on the debt-limit issue, nor do I believe that Mike possesses any such inside knowledge.)

On Friday afternoon, Treasury announced that it had decided not to pursue the constitutional option regarding the debt limit. Even though Secretary Geithner had dangled the possibility of declaring the debt-limit statute unenforceable, Friday's announcement seemed to remove that option.

At the time, there was hope among the Obama team that they were close to a deal to raise the debt limit -- as part of a package of spending cuts that I found shocking and unacceptable, but that fit Obama's triangulation/Republican-Lite strategy perfectly. The announcement from Treasury, therefore, could be seen as an attempt by Obama to show good faith to the people across the negotiating table.

Of course, accepting the constitutionality of the debt-limit statute was sure to create consternation on the political left, especially among those who had complained bitterly about Obama's deal last December to extend all of the Bush tax cuts, as well as his agreement to enact significant spending cuts in the remainder of the current fiscal year.

Tribe's op-ed, then, came at an especially opportune moment for the White House. Arriving on people's doorsteps on Friday morning, one of the best-known liberal legal scholars in the country had written a prominent opinion piece claiming that the debt-limit law could not be avoided. Hours later, Treasury announced that they had taken a position consistent with Tribe's.

In that context, it almost did not matter how strong or weak Tribe's arguments were, only that he took the bottom-line position that there is no constitutional "silver bullet" (to quote one of his dismissive descriptions) to nullify the debt limit. The White House was thus in a position to say to its liberal allies: "Sorry, but even Larry Tribe thinks your position is wrong!"

The available evidence suggests that there was no coordination between the White House and Tribe. Indeed, Geithner is evidently unhappy with Tribe's suggestion that he (Geithner) had ever floated the idea of nullifying the debt-limit statute, casting strong doubt on any notion that the political team at White House/Treasury had worked with Tribe in advance or even knew what he was doing. There was, however, undeniable political advantage to the White House in how this played out.

In any event, things are now moving so fast that there is no way to predict whether the constitutional argument might be revived before August 2. Despite Obama's show of good faith, House Speaker Boehner backed out of the emerging deal on Saturday. Even so, Obama is currently pushing for Boehner to agree to a large-scale plan consisting mostly of spending cuts, along with a small increase in taxes. Senate Minority Leader McConnell subsequently stated that there was an unspecified plan in place to prevent default on August 2, even if there is no budget deal in place, which suggests that the constitutional argument could be unnecessary. If that does not work, Obama could simply order Treasury or the Office of Legal Counsel to declare that, after further study, they have come to believe that the debt-limit statute actually is unconstitutional. At that point, Tribe's piece will be long forgotten.

I should add that there are very good reasons for Obama to resist invoking the constitutional argument that I and others have endorsed. Even though I am fully convinced that the argument is correct, it is impossible not to be aware of the awesome political risk that Obama (one of the most risk-averse politicians I have ever seen) would be taking. Calls for impeachment would surely follow. Moreover, many timid Democrats could well abandon him, preferring to cover their own behinds by arguing that "the President must obey all of the laws, not just the ones that he likes." (Such claims would ignore that the debt-limit law, when binding, makes it impossible to follow all of the laws, but we are talking about political rhetoric here, not substance.)

Even so, there may ultimately be no choice. Maybe not on this go-round, but at some point -- possibly quite soon, depending on how high the debt limit is raised under any deal this summer -- we could be right back where we are today. It will again be called a "budget crisis," but it will, in fact, be a completely political crisis, without any basis in underlying economic reality (as opposed to, for example, a crisis driven by a financial panic). Unless we return to a situation where both parties again view the debt-limit law as something that must be increased as necessary to accommodate reality, a debt-limit-based political crisis will surely come again.

There is some irony in this. In Obama's born-again austerity rhetoric, he solemnly states that we must not continue to put off difficult choices, because kicking the can down the road is unfair to future generations. Yet he is willing to keep the debt-limit statute on the books, ready to explode at any time in the future, whenever one party is willing to hold the economy hostage to their budgetary preferences. (Actually, this need not even be tied to budgetary matters. The Republicans could demand, say, a constitutional amendment overruling Roe v. Wade as the price of raising the debt limit.)

Allowing an unconstitutional law to continue to threaten the perfect credit record of the United States, and putting future politicians in the completely avoidable position of having to deal with political crises that we could head off today, is hardly an example of responsible governance with the future in mind.


Hashim said...

Two questions (I apologize if you've answered these before):

1. Why does the debt-limit makes it impossible to follow all the laws? At most, that would be true if the Govt couldn't fund out of existing revenues the interest payment on the debt plus all other *legally-mandated* expenditures, and Congress refused to generate additional revenues through non-borrowing means (taxes, user-fees, etc.). But isn't there a large amount of *discretionary* spending authorized by Congress, funds for which the Executive Branch can divert, under the Take Care power, to legally-mandated expenditures while complying with the debt-ceiling? Plus, doesn't the Executive Branch have considerable administrative authority to raise revenues through non-borrowing means (such as by increasing the amt of regulatory penalties, user-fees, etc.)? Finally, if not all legally-mandated expenditures constitute "public debt" w/in the meaning of the 14A, then the debt-limit is simply a statutory rule of priority which trumps prior statutory expenditures; so long as constitutional "debt" is paid, there's no constitutional problem. (I realize, however, that you might disagree w/ the premise of this last point, which is independent of the two prior points.)

2. Why does a budget appropriation for a program expenditure authorize the Treasury to borrow money for the program if it turns out that, contrary to Congress' budget, there isn't sufficient money to pay for the program? I would think that appropriating existing funds is a distinct legislative act from authorizing additional borrowing, and that the former doesn't imply the power to do the latter.

egarber said...

Hi Neil,

I understand your argument that ignoring an unconstitutional law isn't tantamount to usurpation of congressional authority overall -- and that Tribe's slope might be more slippery than it needs to be.

But at the same time, it sounds like you're invoking a form of the unitary executive, because ultimately the president's judgment would determine what can be ignored. This is quite different than a scenario where the Supreme Court might rule the limit is unconstitutional; at that point, president is ignoring a law first invalidated by a separate referee. Tribe makes the point that the president -- via the Steel Seziure ruling -- acts at his lowest inherent ebb when Congress has clearly spoken in the other direction. That conclusion seems directly applicable here.

Of course, there could be another route: maybe this is a non-justiciable or political question. In that case, I guess you could say the constitution requires a political tug of war to determine the answer. Maybe Mike can chime in on that question.

Whatever the answers, this is a great debate.

Neil H. Buchanan said...

I'm going to write a related post on Friday, in which I'll try to address Hashim's excellent questions. To the extent that I fail to do so (by omission, or by providing unsatisfactory answers), please re-post them (or updated versions) on the comments board for that post.

I think the answer to egarber's comment is pretty straightforward. I do not see any similarity in my argument to the theory of the unitary executive. The President is not simply saying that he doesn't like some laws, or some aspects of some laws, that Congress has passed, thus justifying his refusal to enforce the laws.

Instead, my argument is that the debt-limit law can (under circumstances that are likely to exist on August 2) force the president to choose between two laws, both of which Congress enacted. The President's powers are not at their lowest ebb, because he is carrying out a valid law after removing the unconstitutional barrier to executing Congress's expressed will.

meads said...

Discretionary expenditures are still legally binding the term discretionary is just to distinguish them from entitlements.contractual obligations are as much public debt as the issuance of treasuries which is just another contractual obligation. Just like an individual, the fact that there is insufficient revenue does not mean you don't have to pay your contractual obligations.

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