-- Posted by Neil H. Buchanan
When Congress returns from recess after Labor Day, the news will be completely dominated by talk of budget brinksmanship, continuing resolutions, default, and other insanity. In my Verdict column today, I try to explain the debt ceiling in the current budgetary and legislative context.
Regular readers of Dorf on Law will hardly be surprised that I re-explain the trilemma. (A quick example for first-time readers: a trilemma is the impossible situation in which a President is supposed to spend $1000 and collect $800 in tax revenues, but is limited by the debt ceinling to borrowing no more than $50. He will have to break at least one law, no matter what.) I spend surprisingly little time, under the circumstances, discussing the argument that Professor Dorf and I have made, that the President's constitutional obligation is to violate the debt ceiling law, not the spending or taxing laws.
The bigger point of the column is to point out that the Democrats have still bought into the idea that there is only thing that the President can do in a trilemma (violate the spending laws), and that they do not understand that this would (a) be illegal, and therefore (b) give House Republicans the grounds that they have desperately been searching for, on which to impeach the President. The Republicans are trying their damnedest to set an impeachment trap (although the timing, as I describe below, is conspiring against them), and the only thing that Obama has done is to repeat that he will not negotiate over the debt ceiling.
Notably, neither the White House nor the Democratic leadership in Congress has come up with any strategy -- even a completely defensive one, much less an affirmative vision -- with which to win over the public. Are there any Democratic Senators or Representatives who are spending the recess selling the Democrats' budget strategy to their constituents? No, because there is no strategy. This bodes ill for the coming negotiations.
Although I have not worked them into a broader narrative, I will add some thoughts here on four related issues:
(1) As noted above, the timing of all of this is not going the Republicans' way. That is, they really were hoping to put the President into an impeachment trap before the current fiscal year ended on September 30. That would have allowed them to have the full-on donnybrook that they seek, without having to worry about actually doing the legislating that they are supposed to be doing (keeping the government fully operational). But when the economy turned out to be slightly stronger than expected (increasing tax revenues), and the sequestration-related spending cuts were not canceled, what might have been a July or August trilemma became a post-September 30 trilemma. Bummer for the Republicans, who then had to face the prospect of a plain ol' government shutdown, rather than an exciting new default. (Some right-wing think tanks dutifully weighed in with the news that the Republicans did not "lose" the 1995-96 shutdowns, contrary to popular opinion. "Come on, guys. Let's drive off that cliff again!!")
At one point, it even looked like the debt ceiling would not become binding until well into November, which might have served the Republicans well. They could then have passed annual spending bills (or, more likely, continuing resolutions) that would have set up a trilemma, with the trilemma date far enough into the future that everyone would be willing to say, "Well, we have enough time to deal with the debt ceiling later." Later, when the trilemma loomed, Obama would have no leverage.
Earlier this week, however, Treasury announced that the drop-dead date is mid-October, only two weeks after the end of the fiscal year. I opine in my column that two weeks is too short even by Washington standards to pretend that the debt ceiling can be dealt with separately from the spending and taxing laws. It is extremely difficult to imagine everyone agreeing on a trilemma-creating budget deal on October 1 that does not include an adjustment to the debt ceiling that will be needed only two weeks later.
I wonder, however, whether I am right about that. We know that two months is long enough for people in Washington to think that they can deal with a problem, because that was the amount of time they gave themselves with the January 1 "fiscal cliff" deal to respond to sequestration. When March 1 came along, they still could not accomplish anything. One would hope that this experience would make these guys less likely to make the same mistake, and certainly not when we are dealing with weeks instead of months. As I have been thinking about it, however, I admit that it is actually not at all difficult to picture a scene on, say, October 3, with Obama and Boehner agreeing to a continuing resolution that ends a short government shutdown, and agreeing to "get right to work" on the debt ceiling. This will be a good test to see just how clueless Obama is. If he somehow fails to combine the spending bills and the debt ceiling increase in one deal ... yikes.
(2) It is worth emphasizing that the Republicans have finally expanded their range of demands in budget negotiations, as I have predicted they would. They are now demanding repeal of the ACA, even though doing so would actually increase long-term deficits. Although many prominent Republicans are scoffing at their colleagues about the prospects for repealing the ACA, the larger point is that the conversation has now expanded from "spending cuts in exchange for debt ceiling increases" to "not even a budget, much less a debt ceiling increase, unless we get something else we really want, whether it's about the budget or not." Even if it does not work this time, we can look forward to a broader range of demands. In my column today, I mention repealing Roe, voter suppression, and anti-environmental laws. The list of possiblities, however, is limited only by the craziness of the party's base.
(3) As I have often pointed out, however, it is not only the Republican base that has gone crazy. Even people in leadership positions are espousing positions that are insane. Interestingly, even when a prominent Republican seems to understand an important point, it does not carry over to debt ceiling discussions. For example, the Republican chair of the Joint Economic Committee recently wrote a letter to the Times, arguing in favor of a balanced-budget amendment. No surprise there. Yet, in arguing that such an amendment must exclude interest on the debt, he wrote: "No Congress can control interest spending, which is a result of previous
spending decisions and the Federal Reserve’s monetary policy."
Quite true. Now, the point this guy really wanted to make was that he wanted to prevent a balanced-budget amendment from giving the Fed a reason to keep interest rates low, which the true believers are certain will lead to hyper-inflation any day now. Even so, the growth of debt -- and thus the necessity of increasing the debt ceiling -- is also "a result of previous spending decisions." Is the chairman thus a heretic in his party, refusing to use the debt ceiling as a political weapon? Maybe, but almost certainly not. During the first debt ceiling crisis, in mid-2011, he said that "unless there are serious, meaningful, trillion dollars of cuts
in reform to the budget, we’re not going to raise this debt ceiling.” On the other hand, earlier this year, he said: "America will pay its debt and will not default. There’s no question about that." The problem is that these people think that the only meaning of "default" is not paying bondholders (which is the basis of their "prioritization" strategy). So, even though paying the government's obligations under the law is "a result of previous spending decisions," apparently only some previous spending decisions need to be honored.
(4) Even though the higher-ups in the Republicans are hardly a model of sanity, the back-benchers still provide the best value for your entertainment dollar. A Republican House member from Florida argued earlier this month that the country's credit rating "would do better" if we refused to pay our creditors on time. Go read his comments here. This is seriously delusional stuff! What I like best about the quote, however, is that after he has tied himself up in knots talking about things that he clearly does not understand, it suddenly occurs to him to blurt out a safe talking point: "We don't have a money problem, we have a spending problem." Sadly, he did not even get the talking point right. The Republicans are supposed to say that we do not have a revenue problem, we have a spending problem. Either way, it is certainly a money problem. The one thing I thought Republicans could do was stay on script.
This is, of course, anything but funny. The next month (and probably much longer than that) will show just how far Republicans are willing to push the debt ceiling craziness. Do not expect a happy ending.