by Neil H. Buchanan
What I have called the "drop-dead date" is the day on which, if Congress does not increase the debt ceiling, it will be impossible for President Obama to pay all of the nation's obligations without issuing more debt (or collecting more taxes) than Congress has authorized. That date is, strangely enough, not the date on which the country hits the statutory limit on debt. If it were that simple, the debt ceiling would have had to be increased on March 15 of this year, when a prior congressional enactment ended a temporary suspension of the debt ceiling and reset the limit at exactly the amount of debt that existed on that day.
Instead, Treasury has to guesstimate when it will have used up all of its "extraordinary measures," at which point new borrowing becomes necessary to prevent a first-ever government default. As I noted in my Dorf on Law post this past Friday, the latest guess from Treasury is November 5, which is now less than a month away and about a month earlier than the previous guess. With the latest spending bills (technically continuing resolutions) having funded the government through December 11, and Speaker Boehner leaving office on October 31, the debt ceiling is the next big budgetary/fiscal issue that Congress must address. Of course, this means that the crazies who seem to run the show in the House (and who also have significant representation in the Senate) are licking their chops to prevent the debt ceiling from being increased.
With the debt ceiling again becoming a source of public fascination-cum-revulsion, I have been having some interesting conversations, with reporters and with fellow academics, about what might happen if the debt ceiling is not increased in time to prevent the president from facing a trilemma. Two ideas in particular caught my attention during some conversations yesterday, both of which purport to make it easy for the president to justify defaulting rather than issuing enough debt to pay the nation's bills. Neither idea works, but they are interesting in their own ways.
First, the question has again arisen whether plain old-fashioned rules of statutory construction might resolve the matter. In particular, is it possible that the "last-in-time rule" could make this go away? The idea is that, if Congress has refused to increase the debt ceiling, then it will have made clear that it views the debt ceiling as a more important law than the appropriations laws, so the president would then be required to treat the debt ceiling as having modified Congress's enactments regarding appropriations.
Professor Dorf and I discussed this issue at some length in our first Columbia Law Review article in October 2012, but it certainly bears revisiting here. The last-in-time rule becomes problematic very quickly, because it is so tempting to view congressional inaction as meaningful in the analysis. That is, in the argument as I described it above, the president is apparently supposed to say, "Congress ignored my repeated requests to increase the debt ceiling, so they must really not want me to issue more debt. Now, I must start figuring out who the unlucky losers are who will not be paid."
But the action/inaction distinction is particularly important here, because in this scenario Congress also will not have changed its spending laws to avoid the trilemma, even though doing so was very much an option, and it similarly will not have changed the tax laws. By contrast, the last relevant bill that Congress will have actually passed is the continuing resolution on September 30, which requires the President to spend money on so-called discretionary programs (defense and domestic). It is true that the laws that appropriate money for non-discretionary spending (such as Social Security benefits and interest on Treasury debt) were passed earlier than the last debt ceiling law, however, so at best this becomes a rule by which the president must prioritize discretionary over non-discretionary spending.
Given that even House Republicans have recently tried to pass a law prioritizing Social Security payments and interest on the debt, it would be particularly odd to reach the conclusion that discretionary spending is sacrosanct, that the debt ceiling must be honored, and thus that the spending that Congress has seen fit to place above the vicissitudes of the annual budgeting process must be sacrificed.
I should also note a further argument from a subsequent Buchanan-Dorf article that, even if one were to somehow view Congress's inaction as having indirectly authorized the president to pick winners and losers, the non-delegation doctrine requires Congress to provide some intelligible principle to guide the president's choices. It will have provided none, however, because it is not possible to include an intelligible prioritization principle as part of a law that was never passed.
The second interesting possibility, however, suggests that Congress actually has put out enough bread crumbs to allow the executive to know how to prioritize payments during a debt ceiling crisis. This argument, which can stand on its own or work in conjunction with the previous argument, essentially says that "everyone in Washington knows" what Congress's true priorities are, and the White House would be required to follow those priorities, even though there is no written record of them.
What could this possibly mean? One suggestion is that the nation's unfortunate experiences with government shutdowns provides insight into what Congress really wants. For example, we know that the federal government does not completely shut down in those situations, because Congress has said that emergency services, border patrols, law enforcement, and so on constitute "essential functions" that must be allowed to operate even during a political food fight over spending.
Here, we are talking about laws that Congress has passed to keep the government running even in the absence of appropriated spending. The question, then, is not whether we are going to pay those people for work that they have already performed, but instead whether we want to promise them timely payment in the future for work that they will do at Congress's request. By contrast, if a president decides that the debt ceiling forces him to stiff some people and companies who are expecting to be paid for services performed in the past, he is not choosing between keeping some functions of government running while shutting others down. He is choosing which people with valid legal claims shall be told to wait.
At best, therefore, the suggestion here is that the president should figure out which obligations are owed to people who "matter less" than other people on the to-be-paid list. And the way to decide who really matters is apparently to analogize to Congress's priorities during shutdowns. Those supposed priorities, however, are notably incoherent and fluid. For example, a few days into the 2013 shutdown, then-Secretary of Defense Chuck
Hagel simply announced that all defense-related activities are
essential, and he then called all of his employees back to work. No one complained, and those workers were ultimately paid in full. In fact, all workers ended up being paid in full, because Congress later decided that government workers should not be penalized for the shutdown. So who matters less, the people who were called to work and paid, or the people who were given a paid vacation?
More to the point, this entire exercise attempts to read tea leaves about what Congress really wants, when in fact Congress has said loudly and clearly what it really wants through the appropriations laws and the continuing authority to spend money on permanent programs. We are then left to ask, "Congress said that it wants this much money spent on each of these priorities, but it really didn't mean it because it also cares about the debt ceiling. What are its real priorities?"
This merely leaves us back where we started. Professor Dorf and I have argued that Congress has the ability to undo a presidential "mistake" when he issues additional debt, that is, when the president's reading of the tea leaves leads him to issue more debt than Congress really wanted. If Congress really does not want the nominal debt to have gone up by, say, the extra $50 billion that the president might borrow in 2015 to pay all of the nation's bills in full and on time, then Congress can reduce the deficit (or increase the surplus) in 2016 to make that $50 billion of debt go away. But failing to pay people in full and on time is a bell that can not be un-rung, because of the collateral consequences of default.
Even if one were to disagree with our analysis on that particular point, however, it at least demonstrates that it is surpassingly arrogant to suggest that there is an implicit "not really" hiding in the appropriations laws but not in the debt ceiling law. We have never defaulted on our obligations, so we have no experience with Congress speaking to the question, even after the fact, of how the pain should be distributed. Argument by analogy is often useful, but this particular analogy is so inapt that it tells us nothing about the issue at hand.