by Michael C. Dorf
A recent Washington Post article explains that the Biden administration is quietly trying to figure out what to do in the event that Republicans don't end their filibuster and Democrats don't manage to increase, suspend, or repeal the debt ceiling through reconciliation before the government is unable to meet all of its legal commitments without exceeding its borrowing authority. With less than two weeks remaining until that doomsday deadline, the scenario planning is sensible, much in the way that it's sensible to have some sort of evacuation plan in the event of a nuclear war. Of course the evacuation plan will not avert the catastrophe but can only somewhat mitigate it. And of course the top (and second, third, and fourth through fiftieth) priority should be averting the catastrophe. Still, it would be imprudent not to prepare for the worst in case it occurs.
At the same time, as Prof Buchanan acknowledges in his latest Verdict column, the Biden administration has good reason not to explain publicly that, should Congress fail to act, the President will issue bonds in excess of the debt ceiling--even though, as Prof Buchanan and I have argued in multiple articles and columns over the last decade, that is in fact what he should do under such circumstances. A prior announcement of the intention to issue debt in excess of the ceiling could somewhat lessen the pressure on Congress, which in turn could increase the likelihood of congressional failure to act, which could itself carry very dire consequences.
Indeed, the fact that we can identify the least awful course of action for the President to choose should Congress not act does not mean that the situation would not be awful. I do not think--as I have heard some critics of the Buchanan/Dorf view say I think--that issuing debt in excess of the ceiling would be "no big deal." On the contrary, as I (somewhat inarticulately) put the point to the WaPo reporter:
The view is often misattributed to me that it would be no big deal for the president to issue debt [after a debt ceiling breach]. It would be a big deal. It would be quite terrible and very likely would spook the markets. But the question is what to do if the spending and borrowing laws are inconsistent. I’ve expressed the view that the least bad thing to do under those circumstances would be to issue debt.
Having attempted to clear up any confusion about that matter, I now want to turn to another common misunderstanding of the Buchanan/Dorf view that, if push comes to shove, issuing debt in excess of the ceiling would be "the least unconstitutional option." Critics and even many commentators who are not critical of our view sometimes describe it as urging the President to invoke the Fourteenth Amendment. That formulation betrays a fundamental misunderstanding of our position that no one who actually read our work could hold. Rather, as I shall explain, it is the people on the other side of this argument who want to invoke the Fourteenth Amendment.
In very condensed form, the Buchanan/Dorf position goes like this: Article I of the Constitution gives Congress the powers to spend, tax, and borrow. Putting aside additional revenue-affecting powers like selling federal property, we can thus schematize a debt ceiling trilemma as a circumstance in which S > T + B, where S is how much spending Congress has authorized, T is how much revenue the government takes in via Taxation, and B is how much the government is authorized to borrow. We might avert a crisis if it were possible to read the more recent laws as tacitly repealing the earlier ones, but we have a genuine crisis where it's clear that the only really plausible reading of the various statutes is that Congress has given the President inconsistent instructions, so there is no way to spend S without exceeding T in taxes and/or B in borrowing. So anything the President does -- spend less than S, tax more than T, or borrow more than B -- is unconstitutional because it usurps a power granted to Congress.
[Aside: You might think that while spending more than S is a problem, spending less than S is permissible. If so, you haven't read the Line Item Veto Act case and the Impoundment Control Act. If Congress tells the President to spend "up to" S, he can spend less than S, but if it tells him to spend S, he has to spend S or else he is usurping legislative power. Back to italics now to finish up the summary of the Buchanan/Dorf view:]
When faced with circumstances in which everything the President might do--including nothing--is unconstitutional, the President has a duty to mitigate the constitutional damage by choosing the least unconstitutional option. Here, where the violation in each case would involve usurping a power assigned to Congress, the least unconstitutional option is to borrow in excess of the debt ceiling because doing so involves no fundamentally legislative choice by the President about which spending or revenue to prioritize. If the President purports to "cut" spending, he chooses which programs to cut and by how much. Likewise, if the President imposes taxes, he decides whom to tax for what and by how much. By contrast, if the President engages in congressionally unauthorized borrowing, he borrows exactly the amount needed to make up the shortfall between congressionally authorized spending and revenues--no more and no less. Thus unauthorized borrowing is substantially less legislative and thus less unconstitutional than the other options.
Notice that Section 4 of the Fourteenth Amendment plays no part whatsoever in the foregoing argument. We reached the conclusion that borrowing in excess of the debt ceiling is the least unconstitutional (and thus least bad) option in a trilemma solely by analyzing the Constitution's Article I. It is thus completely inaccurate to attribute to Prof Buchanan and me the view that the President can or should "invoke" or even refer to the Fourteenth Amendment in responding to a trilemma (although we acknowledge that some scholars and others who reach the same bottom-line conclusion as we do get there by discussing the Fourteenth Amendment).
Interestingly, the old conventional wisdom--which treated a debt-ceiling trilemma as roughly similar to a periodic government shutdown--does seem to rely on invoking Section 4 the Fourteenth Amendment. Consider the argument (made against Prof Buchanan and me in various fora) that in the event that Congress fails to raise the debt ceiling the President ought to prioritize paying holders of U.S. bonds over paying firms and persons to whom the government has promised to pay money, such as doctors who performed services under contract through Medicare or persons eligible by law for Social Security. The argument rests on the claim (sometimes supported on historical grounds) that failure to spend money Congress has appropriated for Social Security or other spending other than repaying lenders would not "question" "[t]he public debt of the United States."
In our first law review article on the debt ceiling, Prof Buchanan and I argued that such a narrow reading of the Fourteenth Amendment's Section 4 runs away from the broad view articulated by the Supreme Court in the one case to construe the clause, Perry v. United States (1935). I continue to think our reading is better--that financiers should not be prioritized over federal contractors or persons on disability--but even if we're wrong and our critics are right, their position does not at all address the trilemma. At most what they have shown is that if the President decides to prioritize paying bondholders while stiffing Social Security recipients, he will not thereby violate the Fourteenth Amendment. But he will still violate the Impoundment Control Act and with it the assignment to Congress by Article I of the power to spend.
Put differently, it is our critics who want the President to have a de facto line item veto. They, not we, seek to "invoke" the Fourteenth Amendment in a debt ceiling crisis. Even then, their approach does not remotely address the fundamental separation-of-powers problem.