Wednesday, May 03, 2023

The Fourteenth Amendment Argument is Good But Clearly Second-Best: Does That Matter?

by Neil H. Buchanan

Now that the Treasury Department has jolted the debt ceiling back into the news by announcing that the drop-dead date is much earlier than expected (June 1 instead of late Summer or early Fall), every uninformed reporter, politician, and pundit once again has an opinion about something that they in fact know little or nothing about.

Over the decade-plus that this recurring nightmare has haunted us, one of the most frustrating aspects of news coverage has been an almost willful misunderstanding of the Buchanan-Dorf "least unconstitutional" trilemma analysis -- which, to repeat once again, is based on the observation that there are NO legal avenues available for a President to pursue once the debt ceiling becomes binding, including so-called prioritization of whose obligations will be paid.  Because of that obtuseness, our argument is treated as merely one item on a laundry list of "work-arounds" that might allow a President to frustrate Congress with a clever strategy.  This puts us on the same footing as the platinum coin gambit (about which we have written extensively in the last few weeks) and other weird financial tricks, as well as the argument based on Section 4 of the Fourteenth Amendment.

That latter argument, however, at least has the advantage of being correct, which very much separates it from the coin idea and other loopy fantasies.  The problem is that it is not the best argument available, and beyond that, when people hear "constitutional argument" in this context, they automatically think: "Oh, right, that's that Fourteenth Amendment thing."

My question for today is deceptively simple: If the drop-dead date comes, and President Biden takes the path that we have long advised him to take -- declare that he cannot allow the existence of the debt ceiling to force him to violate the appropriations laws and that his Treasury Department will thus continue to issue securities in the usual way, as necessary to pay our bills in full and on time -- but he says that he is doing so because of the Fourteenth Amendment and not because he is facing a trilemma, should I or anyone care?

We are thus in the familiar realm of wondering whether justification matters, that is, whether it is acceptable to do the right thing for the wrong reason (or for not the best reason).  And not just whether it is acceptable in a moral sense but in a strategic sense.  If Biden invokes the weaker constitutional argument, would that come back to bite him (and the US and global economies)?

I ask these questions in part because I have recently noticed that this conflation of the trilemma argument with the Fourteenth Amendment argument (which I will henceforth call Amd14) affirmatively annoys me.  For example, at a recent speaking event where Professor Dorf and I were invited by a receptive audience to speak for an hour about the debt ceiling, we were somewhat blindsided when the opening question was not about the trilemma but Amd14.  The question was phrased in a way that even suggested that Amd14 has obliterated the trilemma argument in people's minds, so that it is worse than merely conflating the two.  (One might even say that we're being canceled!)  We thus had to waste about ten minutes of the talk setting everyone straight about that threshold issue.

Similarly, a reporter from a major news organization sent me an email a few days ago that included this: "We’re working on an explainer piece related to the debt ceiling, and I wanted to see if you had a few minutes to discuss how the 14th Amendment’s provision on the debt limit could come into play? Specifically, if the Biden administration were to use the clause to take action on its own to suspend or eliminate the debt limit, would anyone have standing in court to challenge that action?"  This did not even mention the trilemma, which could mean that the reporter was aware of the trilemma argument but had chosen to focus on its lesser sibling.  Even so, the standing question would be relevant for both constitutional arguments, suggesting that the reporter is simply unaware that there is a better argument out there.

This has been going on for as long as the Republicans have engaged in hostage-taking via the debt ceiling.  Back in 2012, when I was still living in Washington, DC, a producer at CNN invited me down to their studios to record an interview with one of their reporters.  That reporter had been briefed on Amd14 and was utterly flummoxed when I answered his first question by saying, "There is a more fundamental argument based on the Constitution," which I then briefly outlined.  He was so confused that, after stumbling through another question or two, it dawned on him that his questions were no longer relevant.  He then actually stopped the interview and nervously went over his notes for several minutes, then tried again to recover but failed to do so.  The piece never ran.  I do give the guy credit for noticing the problem and for pulling the plug, which is more than most reporters do in that kind of situation.

So the conflation/canceling of the trilemma argument has been going on for a long time, with no sign of letting up.  Does it matter?  All of this, after all, is before-the-fact positioning.  Professor Dorf and I have been repeating the trilemma argument for all this time because we believe that it is essential for the pundit class, politicians, reporters, and citizens more generally to understand that the conventional wisdom is wrong.  Specifically, they need to understand this before a catastrophe occurs in order to minimize the damage from that catastrophe.  What happens after the unthinkable happens?

Regarding Amd14 specifically, it is both wrong and politically damaging to say that the President would "invoke" the Fourteenth Amendment in order to do what he needs to do.  Relying on the trilemma argument, on the other hand, Biden would not say "I invoke the Constitution."  He would simply say that he faced nothing but unconstitutional options and that he had to choose the least bad among them.  That would make it clear that he did not go out looking for a way to nullify an otherwise-valid law by finding a superseding constitutional provision to invoke.  He had no choice but to act, and to act in the least unconstitutional way.

I continue to believe that this matters, because winning the political battles in advance should be done with the best ammunition available, and Amd14 is not it.  On its own merits, the argument has some vulnerabilities -- not weaknesses, exactly, but points that invite attack.  There is, for example, at least a minimally colorable argument that Section 4's language -- "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." -- means only that the debt cannot be repudiated, because "shall not be questioned" is otherwise too squishy to mean anything.  (Does a Republican politician violate Section 4 merely by musing out loud that it would actually be a good thing to fail to pay the debt?  Does that bring the validity of the debt into "question"?)

Similarly, there are many ways to quibble over what "public debt" means in the Section 4 context, possibly reading it so narrowly that it only means US Treasury securities and no other government obligations.

To be abundantly clear, I think those objections are wrong, the first being yet another bit of slippery-slope sophistry and the other a dishonest attempt to narrow a word's meaning for political ends.  Even so, they are not drop-dead wrong arguments (such as those invoked by platinum coin enthusiasts.)  And although the one Supreme Court case to address the underpinnings of Amd14, 1935's Perry v. United States, includes an analysis that comes down squarely in favor of the better reading of Section 4, that language was arguably dicta.  Even if we are not flying completely blind -- and even if stare decisis still means anything in a post-Roe world -- there is not much to go on in terms of the usual legal authorities.

As Professor Dorf put it recently: "[W]e would say that if Congress fails to raise the debt ceiling in time, the President would be obligated to borrow in excess of it, even if the Constitution contained nothing like Section 4 of the Fourteenth Amendment."  Even so, "although the Buchanan/Dorf approach does not in any way depend on the Fourteenth Amendment, we don't disagree with the Fourteenth Amendment argument."  I would thus be more than happy to work on an amicus brief in support of presidential action based on Amd14, if it ever came to that.  Amd14 is a perfectly good argument-in-the-alternative, and I could in good faith say that I have full confidence that it is a winning argument on its own merits.

Will it come to that?  And if it does, to re-invoke the question that motivated this column, should I or anyone care if Biden takes the right action based not on wrong arguments but on not-as-strong-as-the-strongest arguments?  If everything that I discussed above was about before-the-fact positioning, does any of it matter once we are in the after-the-fact world of a constitutional and economic crisis?

Recall that neither of us (writing jointly or separately) has ever said that there is a good outcome, if the Republicans refuse to blink.  There will be huge questions hanging over the financial markets, with legal challenges flying and House Republicans excitedly voting for articles of impeachment.  Who would not be worried not only about the new Treasury securities that were sold (almost certainly at a huge risk-adjusted discount, raising borrowing costs and thus the national debt) but also about the once-solid Treasuries that might suddenly seem risky?  And that is to say nothing of the people who are owed money by the federal govenrment in the coming days, weeks, and months, who will wonder whether Biden will be prevented by the courts from making good on those obligations.

I think that it matters a bit less to have the best argument afterward than before, simply because the President's action would create a new reality on the ground.  If necessary, he could even start to discuss Buchanan-Dorf to bolster his case during that aftermath, even though doing so might look a bit opportunistic.  Winning the politics after the drop-dead date probably does not depend on the first thing that Biden says on the morning of the Treasury's first sales of securities that exceed the debt ceiling.

And there is something to be said for taking the world as it is rather than as we wish it would be.  The political and media classes are uncomfortable with anything that seems unfamiliar, which in this case means that talking about Amd14 would be more soothing to them than talking about something that they have never heard or understood (no matter how much we have tried).  When a pundit can say, "Well, everyone's known for years that the Fourteenth Amendment option was out there," that might be better than hearing him say, "What's this new thing coming out of nowhere?"

Even so, I cannot get past the thought that the better strategy -- having already ignored the best strategy, which is to do all of this months before the drop-dead date -- is to use the strongest argument available.  A familiar argument that is easier to pick at is not going to hold up as well as an unfamiliar argument that no one has been able to beat in the twelve years that we have been making it.  (Most critics do not even try to engage on the merits.)  I concede, however, that it would be a closer call after the fact than before.