Bad Things Didn't Happen, so We Were Never in Danger

by Neil H. Buchanan

"Obama Signs 2-Year Budget, Debt Deal Before Default Deadline," reports the Associated Press, with the debt ceiling suspended again, this time until March 15, 2017.  Thus ends the latest debt ceiling drama, most of which took place behind closed doors.  For all practical purposes, this means that the debt ceiling will be out of the news for the next 16 months or so, which means that Professor Dorf and I can get back to writing about the many other issues that we care about.  This must be viewed as a blessing for all involved.

Before leaving this issue behind, however, a few points are worth considering, in the nature of a post mortem.  My new Verdict column today asks and answers a pointed question: "Who Is the Biggest Loser in the Budget Deal? President Hillary Clinton."  The column makes the point that the debt ceiling statute is going to come back less than two months into the next president's first term, with a budget already in place that will run for an additional six-plus months (through the end of September 2017).  This means that the next president will almost immediately need to ask Congress to increase the debt ceiling, in order to avoid a trilemma.  And if the new President is Hillary Clinton (a very high-likelihood outcome) and at least one house of Congress is still controlled by Republicans (a near certainty), then the budget-related confrontations that we have seen for the past four-and-a-half years will soon look like child's play.  Congratulations on your big win, Madam President!

Was it impossible to fix the debt ceiling permanently?  As I noted in a Dorf on Law post on October 22, Professor Dorf and I recently penned a joint op-ed that we have been shopping to major newspapers.  The op-ed suggested a legislative fix that could, in some ways, be even better than an actual repeal of the debt ceiling law.  When we first submitted the piece, however, the debt ceiling crisis was very immediate: What will John Boehner do in order to prevent default before November 3?  Our op-ed offered one possibility, but we were more interested in a long-term fix.  Therefore, when the budget deal was announced last week, we updated the intro to the piece and tried again.

I confess that I was not optimistic, because of our political system's short attention span.  I found myself imagining op-ed page editors saying, "Oh, that's sooooo five minutes ago!"  Of course, most of the time, an op-ed rejection is either passive ("If you have not heard back from us in x days, you may assume that we have chosen not to run your submission") or minimalist ("Thank you, but no").  Much to my amazement, we received an actual explanation from one of the top newspapers.  It reads: "It's a good piece, but the timing is bad. Though [you] make a strong case, the fact is that we easily avoided a debt ceiling crisis this time, and so the need to talk about outside-the-box solutions is moot, for now."

Yes, we "easily avoided a debt ceiling crisis this time."  It merely required the man third in line to the presidency, a 65-year-old man in good health who had no plans to retire anytime soon, to resign from his dream job and leave Congress after 25 years.  It only required the people who negotiated the deal to act in secret, lest their negotiations be torpedoed by the people who drove the Speaker from office.  It simply required nearly all Democrats to join with a minority of the majority party to pass legislation that pushes the problem less than two years down the road.  That was easy!

I tried to capture the logical fallacy embodied by that statement in the title of this blog post: "Bad Things Didn't Happen, so We Were Never in Danger."  This cognitive problem is actually somewhat common.  One of my professors in graduate school gave frequent lectures in which he argued that unemployment is really not a big deal, because (at the time) the average spell of unemployment was something like five months.  Therefore, he argued, unemployment cannot be all that damaging to people, because they get jobs before long, anyway.  That it is (with the rarest of exceptions) impossible during a spell of unemployment to know when it will end, however, means that even periods of joblessness that turn out to be mercifully short can still be devastating while they are happening.  Even so, people like my former professor can blithely say, after the fact: "Hey, you got another job after five months.  What were you so worried about?"

Similarly, after we emerged from the scariest moments of the 2008 financial crisis, there was immediate revisionism on the right.  The bailouts by Congress and the Fed were quickly derided as overreactions, unnecessary and counterproductive, because there was obviously never much of a problem in the first place.  In real time, most everyone who was paying attention was worried about the financial system imploding in a way not seen since the early 1930's.  But that did not happen, so apparently it never could have happened.  Brilliant.

It is true that there might not be another go-round on the debt ceiling in 2017 or later.  A Republican could win the presidency in 2016.  (Shudder.)  Or maybe the people whom John McCain called "wackadoos" -- the Tea Partiers -- will have been marginalized, or they will choose not to take the economy hostage again.  I doubt it, but it is possible.  But what if we are right back into this nonsense in the Spring and Summer of 2017?

The first thing to note is that nearly all of the relevant political actors will need to learn or re-learn the basics about the debt ceiling all over again.  By nature, congressional staffers need to have the same short-term mindset that was betrayed by that op-ed editor ("Problem solved, time to move forward to the next immediate crisis").  Most of them are generalists, and there is significant turnover in those jobs.  Each time the debt ceiling has returned as an issue after the first big crisis in 2011, Professor Dorf and I have found ourselves starting over in our efforts to explain even the most basic ideas to political players and the press.  And I am talking about really basic stuff, like the difference between a shutdown and a default.

The re-learning process is time-consuming, and it makes it all the more of a shame that two men who are headed out the door -- Obama and Boehner -- thought that they were being statesmanlike by simply making it someone else's problem in the very near future.

In a Dorf on Law post last Tuesday, I described an interview with a reporter who asked some especially good questions about the debt ceiling, and I expanded on some issues that he had raised about financial markets.  That reporter also asked me about the possibility of pursuing a judicial solution.  In my October 22 post (which I noted above), I said that the case-or-controversy requirement ultimately means that "the only way to reach a judicial resolution is actually to experience the worst outcome that the debt ceiling law's existence makes possible."  Strictly speaking, that assertion is incorrect, but in a way that might not matter.

It is true, of course, that there are situations in which parties can go to court and receive injunctive relief before the fact, to prevent "the worst outcome" from happening.  But as I explained to that reporter, it is exquisitely difficult to get the timing of such a lawsuit exactly right.  Indeed, one could describe the problem as being the judicial equivalent of the op-ed timing problem that I described above: By the time anyone could describe the issue as being pressing enough to matter, there might not be enough time to craft anything but a short-term political solution, leaving the courts powerless to act.

Some people have, in fact, put serious thought and effort into finding potential plaintiffs who could be viewed as facing imminent injury, but trying to figure out when to file the suit, and then getting fast-track consideration from the courts, is nearly impossible.

Of course, even if a court were to grant standing and to view the issue as ripe but not moot, the court would then have to agree to hear the case on the merits and then to craft a judicial resolution.  The possibility of finding a judge (and then an appellate panel) who will not view this as a Political Question and who will then order the President to pay the nation's bills, even if doing so requires issuing debt in excess of the debt ceiling, can politely be described as "freakin' remote."

That is why Professor Dorf and I have addressed our writings almost exclusively to the Executive Branch, because that is the branch of government that would have to decide which laws to uphold when it is not possible to uphold them all.  Former President Bill Clinton claimed in 2011 that he would invoke the Constitution, continue to issue debt, and "force the courts to stop me."  After the fact, the courts might actually sort things out, but only if the president forces the issue at the relevant time.  Fortunately, the next president might know Mr. Clinton well enough to turn to him for advice; and if she does, there might be a real resolution in 2017.