Thursday, November 13, 2014

The Debt Ceiling After the Midterms, featuring Actual Engagement With the Buchanan-Dorf Arguments

-- Posted by Neil H. Buchanan

With a few races still left to be decided, the new House of Representatives in 2015 will have 244 Republicans and 186 Democrats.  Even on the assumption that the remaining five seats all end up in the Democratic camp, and even assuming that all Democrats would vote for any increase in the debt ceiling that would be needed, and even assuming that the Republican leadership would again break the so-called Hastert Rule by allowing the House to vote on something that a majority of the Republicans oppose, that would mean that the Republicans need to come up with 27 members who would vote to increase (or suspend, or repeal) the debt ceiling.  (Let us leave aside the possibility of a filibuster by Republican senators, even though a non-published analysis that I have seen from Merrill Lynch suggests that the big players in the financial markets are worried even about that.)

At the very least, this suggests that the reassuring talk from people like soon-to-be Senate Majority Leader Mitch McConnell and House Majority Leader Kevin McCarthy about "responsible" governing could soon be ground up in the gears of base-pleasing nutcasery.  As I have noted many times, this will be their last chance to "get" Obama, and it will come to a head at least 18 months before the next election.  I am not betting on a smooth resolution to the next drop-dead date on the debt ceiling.

Which brings us back to the question that Professor Dorf and I have been asking for quite some time: On what amounts to an existential issue of policy, where are the legal scholars?  In particular, where are the legal scholars who disagree with our conclusions, and who claim that the President will have no choice but to default on the nation's obligations for the first time ever, if the Republicans refuse to increase or neutralize the debt ceiling after it reawakens on March 15, 2015?  Our analysis could be wrong, of course, but if it is, no one has offered any arguments against us in a published article (or, with the one exception to which I will turn shortly, even in the form of a work in progress).

There have been some articles that reach essentially the same bottom line that we reach.  In a Dorf on Law post several weeks ago, I briefly described a recent student note in a top law review, in which the author wended his way through various arguments relating to the federal debt ceiling.  Although I found much to compliment in that piece, I did note the surprising fact that the student editors of the law review (as well as the author himself) simply failed to engage in what I always thought was standard operating procedure: a preemption check.  The note does not cite the work that Professor Dorf and I published in Columbia Law Review over the past couple of years (the central argument of which is summarized in this Verdict column).

It turns out that the failure to do preemption checks is more widespread.  A Democratic staffer on Capitol Hill recently published an article in the Harvard Journal on Legislation, but he did not cite any of our work, either.  Like the student note that I described above, however, that article has its virtues, including a nice rendition of the history of the debt ceiling.  A student note in yet another top law review cites our work in passing, in the course of agreeing with the part of our argument regarding the 14th Amendment's Public Debt clause.  (I should note that the granddaddy of the 14th Amendment articles was published as a student note in 1997 by my now-colleague Michael Abramowicz, whose prescience in anticipating this issue is eerie.)

Lest it appear that I am obsessed with being cited, let me be absolutely clear.  The point of the scholarly enterprise is supposed to be something resembling an advocacy process.  People bring forth ideas and debate them in good faith, other people contest those ideas, and knowledge advances.  In some cases, as I discussed in my Dorf on Law post earlier this week, the result actually improves public policy.  Here, however, that has not happened.

As I noted on Tuesday, however, it is no longer accurate to say that there has been no scholarly engagement that has challenged our arguments.  In a forthcoming article in Connecticut Law Review, Professor Chad DeVeaux of Concordia University School of Law carefully analyzes the issues raised by our "trilemma" analysis and reaches a different conclusion.  Although I ultimately find his argument unsatisfying, it is a serious argument, and Professor DeVeaux's writing has forced me to hone my thinking on this in a way that advances the discussion.  The disagreements that I describe below are offered in that spirit.

Professor DeVeaux builds his analysis upon the famous Youngstown Steel Seizure Case, in which Justice Jackson laid out the "three zones" of presidential power.  Professor DeVeaux's argument leads him to identify a fourth zone of power, which he says Congress would inadvertently create if it legislated a trilemma and thus gave the President no good options. As he summarizes his point in his abstract: "By commanding the president to implement particular programs, while denying him the funds necessary to pay for those endeavors, Congress tacitly afforded the president the discretion to take any of the three corrective actions suggested above" (emphasis added).

It is essential to understand that Professor DeVeaux reaches this conclusion reluctantly.  He clearly wishes that Congress would not create a trilemma, because Congress is shooting itself in the constitutional foot in doing so.  He thus clearly differs from Professor Eric Posner, who is generally so eager to expand executive power that he gleefully grabbed onto the debt ceiling analysis as an excuse to say that all bets are off.  If Congress gives the President no good options, Posner says, then the President can do whatever he wants.  (Again, this is Posner's general view about executive power, not just in the context of the debt ceiling.)  Professor DeVeaux does not engage in opportunistic pretzel logic but instead soberly asks a neutral question about whether there are limits on Presidents who face trilemmas.

But Justice Jackson's analysis does not get us to where we need to go.  The key is his claim that "only Congress itself can prevent power from slipping through its fingers."  That is unsatisfying in this context for two reasons.  First, it is vague.  It might simply mean that Congress possesses the power to guarantee that the President has no wiggle room, and if Congress gives him an excuse to take unilateral action, then Congress has no one to blame but itself.  Only it can "prevent power from slipping through its fingers," because only Congress can pass the laws in a way that avoids trilemmas.

That, however, does not mean that Justice Jackson would say that the President has no constitutional responsibilities of his own, even after Congress has blown it.  The motivating idea behind the Buchanan-Dorf analysis has always been that the separation of powers limits the President, requiring him to choose the "least unconstitutional option," which means that -- even if Congress has done a stupid thing -- the President is required to stanch the bleeding, not open more veins to allow the patient to bleed out.  Congress could (and should) have made it unnecessary for the President to decide how to act responsibly, but its failure to do so is not, even under Justice Jackson's formulation, carte blanche for executive discretionary actions.

More fundamentally, the second reason that Justice Jackson's formulation is not controlling here is that, even if Professor DeVeaux's reading of it were accurate, it has been overruled.  As Professor Dorf and I have discussed in our articles, the Line-Item Veto case (Clinton v. City of New York) stands for the proposition that Congress not only cannot accidentally give away its authority under the Constitution, but it cannot even choose to give it away.  If Justice Jackson really meant that Congress can, through inaction, alter the balance of powers among the branches of government, he was wrong (and his successors have said so).

In the end, then, Professor DeVeaux's analysis is not really wrong, but incomplete.  He provides a different way to think about what we have called the trilemma, using a major Supreme Court case to tease out some important issues.  Having concluded that Justice Jackson's analysis provides no further guidance, he stops too soon, saying only that the President would have unfettered authority to choose his course of action.  That would only be true if there were no further reasons to believe that the Constitution limits the powers of the President.  But there are.

Again, however, this is "good stuff," as the saying goes.  I learned a lot from Professor DeVeaux's paper.  Even though our ultimate conclusion is not undermined, the paper reminds us why separation of powers principles are so essential to guiding our analysis.

20 comments:

David Ricardo said...

What about the situation where the Congress passes a "conditional' debt ceiling increase, that is where the President is presented a bill that raises the debt ceiling subject to certain conditions (repealing part of ACA, reducing corporate tax rates etc).

Does the Dorf/Buchanan analysis allow the President to veto such a bill and then unilaterally act to ignore the debt ceiling and avoid default?

Neil H. Buchanan said...

Yes, it does. Especially if a President's prior decisions are part of what put him into a trilemma, he must still do the least unconstitutional thing. Exceeding the debt ceiling is less unconstitutional than re-prioritizing Congress's enacted spending and taxing policies, because it involves the least amount of legislative-like action (and because it is more easily reversible by Congress in the future).

Remember, the only thing the President would be allowed to do under our analysis is to execute the taxing and spending laws that Congress passed. Nothing more nor less. Treating the debt ceiling as unconstitutional does not give him the ability to "spend whatever he wants," or any of the other nonsense that the Republicans claim.

A conclusion contrary to ours would allow a President to veto a "clean" debt ceiling increase, simply to give himself the equivalent of a line-item veto.

García said...

This whole discussion about the "trilemma" and the obligation of the President to adopt the "least unconstitutional option" reminds me of a constitutional question that arose in my country (Spain).
On February 23, 1981, a group of military men stormed Parliament in the middle of a session and kidnapped all MPs and the Cabinet, including the Prime Minister.
During the standoff, the rest of constitutional authorities (basically, the King and the executive officers without Cabinet rank) realised that they had almost no power to respond to the situation: the control of the Armed Forces and of the civil administration is vested by the Constitution in the Cabinet. And since the Cabinet had been kidnapped, it could not exercise its constitutional powers. Thus, the Army and the civil administration had no head. This created a vacuum that led to many military and civil officials to question who was in charge.
Before the situation slipped toward anarchy, the King and a group of high ranking civil servants created a commission that started to exercise de facto the powers of the Cabinet. Happily, the coup failed and the situation returned to constitutional normality.
The legal consensus in Spain is that in such a situation of crisis, the formal usurpation of powers by the commission was justified, because officials had faced a dilemma (either do nothing because they had no constitutional power and let the coup succeed, or unconstitutionally usurp a power that they did not have) that only had unconstitutional solutions. The King and the civil officials had chosen the least unconstitutional option, which was the one that led to restoration of constitutional normality.

David Ricardo said...

Thanks Mr. Buchanan, but if the President is presented with a conditional debt ceiling increase bill and his choices are to (1) sign the bill, (2) veto the bill and allow default or (3) veto the bill and ignore the debt ceiling and to continue to pay the debts as they come do, spend what Congress has authorized and appropriated and to issue new debt as needed then why isn't he required to sign the bill as the least un-constitutional action?

Doesn't the President in this situation create the trilemma by his veto, as the trilemma would not exist if he signed the bill?

And no, I don't know the answer.

egarber said...

Is it possible that the judiciary might actually be the proper body to resolve such a dilemma? One branch sues the other**, and the court decides via statutory interpretation what has to give as a "remedy"? Not that a court would go anywhere near it of course. :)

** Or maybe a citizen with standing.

Michael C. Dorf said...

Great comments all around. Garcia's point is especially interesting and, I think, underscores the importance of our view on policy grounds. We don't deny that there may be emergencies in which unconstitutional action is justified. But we think that even in such circumstances, it's important to minimize the distance one travels from the Constitution's constraints.

egarber said...

Also, does any spending legislation explicitly qualify itself -- i.e., you're authorized to spend this amount, subject to the statutory debt limit? And if not, what purpose does the debt limit serve in the first place? I guess that's one of the overall points in the debate: it is sort of meaningless.

Joe said...

Jan. 2015-Jan. 2017

interesting times

García said...

Giving this issue further thought, I think that, perhaps, the need to choose the least unconstitutional option in the face of only unconstitutional courses of action could be said to be a part of constitutional theory more generally (and not just in the United States).

For instance, the Constitution of Ukraine guarantees in arts. 70 and 71 that all Ukrainian citizens have the right to vote and that suffrage in elections shall be universal. Art. 76 establishes that the parliamentary term lasts for four years; art. 77 indicates that legislative elections shall be held the last Sunday of March of the fourth year of the term. Art. 103 provides for similar rules for presidential elections (but the presidential term is of five years).

What should Ukrainian officials do when the constitutional date of legislative of presidential elections approaches and a part of the territory of the state is not under the state’s effective control? They could either hold the elections even though not all Ukrainian citizens living in the legal territory of the state will be able to vote (and thus, the elections will not be universal), or they could postpone the votes until the situation is resolved (thus, violating the constitutional duration of the legislative and presidential terms).

I think the obvious answer is that the least unconstitutional option is to hold the elections in the part of the territory that the state does control, because otherwise the link between the government and the governed would dilute over time and Ukraine would stop being a democracy. As a matter of fact, this seems to have been the path followed by Ukrainian authorities in the face of this dilemma.

It may very well be that your doctrinal development is the appropriate way of approaching constitutional crises in general.

Michael C. Dorf said...

Garcia: That's a really helpful example! If you wish to remain anonymous for the public but are willing to let me know who you are in real life so I can credit you if I end up returning to this example, please email me privately.

Paul Scott said...

David,
Separation of powers runs in both directions. That failure to sign a bill would result in a "trilema" cannot itself be used to force the avoidance of that trilema. To do so would allow Congress to make laws without the involvement of the executive (or without a super-majority of both houses).

Relating back to the comments of doing the least harm to the constitutional structure, we cannot conclude that putting the executive in a trilema is an acceptable means for Congress to circumvent the constitutional requirement that the President sign a bill into law (or that a super-majority of Congress do so over the President's objections).

Neil H. Buchanan said...

This really has been a great set of comments. Thanks to everyone. Garcia's examples from Spain and Ukraine are fascinating, and they do support our general approach. Indeed, in our first, long law review article, we explicitly said that, even if someone were to disagree with us about how to respond to a debt ceiling crisis, we were trying to articulate a set of general principles that would apply to other constitutional crises. We mention Lincoln's "all laws but one" comment, and Garcia's examples fit that idea perfectly.

Neil H. Buchanan said...

Re the follow-up question from David Ricardo, I agree with Paul Scott's answer. In addition, the way DR phrased the question has me thinking about "blame" and other matters re the debt ceiling. I plan to devote my next post (scheduled for Tuesday, 11/19) to a discussion of those ideas.

Also, in response to egarber's second comment, Mike and I discuss the severability of the debt ceiling from general borrowing authority in our third article. (Short answer: It's severable.) Explicitly self-limiting spending provisions could work, so long as they provide clear articulations of Congress's orders re what not to spend, which essentially would mean that there was no trilemma, as egarber surmised.

We have not said much about justiciability, because we've been focusing on the President's duties, but there are people who believe that the courts could act. Prof. Adam Rosenzweig at WashU Law has a nice piece in Constitutional Commentary that I plan to discuss on the blog soon.

Joe said...

That "pretzel logic" post has some spam comments.

David Ricardo said...

Okay, I came to the same conclusion as Mr. Scott and Mr. Buchanan in a slightly differently nuanced manner. The Congress could not deny the President his constitutionally given right to veto by presenting him with a situation in which if he did veto the result would be either severe economic distress or a violation of his constitutional responsibilities, even if the one he violated was the least un-constitutional. So no, he is not obligated to sign a conditional debt increase bill to avoid the trilemma.

So I think we all look forward to Mr. Buchanan’s discourse on blame, since the most likely scenario is that the President will be presented with a ‘conditional’ debt ceiling increase bill, one that raises the debt ceiling but contains other provisions inimical to the President’s agenda. For Republicans the debt ceiling is not about the level of debt, or federal spending, or deficits or anything related to fiscal issues. It is all about politics and given that a clean debt ceiling cannot pass and that not passing any debt ceiling at all would place the blame on Republicans a conditional bill seems at this time what is going to happen.

Your turn coming up Mr. Obama (although one wonders if he and his advisors even know they are playing the game).

Joe said...

"his constitutionally given right to veto by presenting him with a situation in which if he did veto the result would be either severe economic distress"

What is "severe economic distress"? Some think that was met by budgets in recent years. Sounds like the open-ended Eric Posner sort of thing Prof. Buchanan opposes.

The issue here is not "severe economic distress" but a trilemma where actually fulfilling each constitutional need (executing the law and dealing with the 14A provision in question) requires at least one breach.

If Congress' spending provisions can be executed w/o breaching the 14A but the result is severe economic distress (whatever this entails), I didn't get that the two here want to put their plan in practice.

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