Tag Archives: 14th amendment; debt crisis

Is Obama Planning to Invoke the 14th Amendment to End the Debt Crisis?

           In an earlier post that received not a little attention, I made the case for why arguments that  Obama should invoke the 14th amendment to settle the debt impasse were not just constitutionally dubious – they were politically stupid, not least for Obama.  As the default deadline looms larger, however, the crazy talk won’t die. House Democrat James Clyburn  is the latest public figure to make the case for invoking the 14th amendment.  As the pressure to do something to settle the impasse intensifies, will Obama take the plunge?

In this guest post  cross-listed at his EducationNext website, Harvard political science Professor Paul Peterson explains why he just might:

How Obama will End the Debt Crisis on his Own Hook: The NCLB Precedent

            If the No Child Left Behind (NCLB) stalemate provides a precedent, President Obama will use an executive order to raise the debt limit, invoking the 14th Amendment as his constitutional bedrock. Though never done before, that action will, in an instant, give him the “Clean Bill” he requested from Congress—an increase in the debt limit through election day, with no cuts in spending, no nothing.

Here is the relevant clause from the 14th Amendment: The validity of the public debt of the United States, authorized by law… shall not be questioned.

            The language is ambiguous. The context for these words  refer to the immediate Civil War situation, as the amendment makes clear that the United States refuses to honor the debts of the seceding states  insists that its own debts are inviolable.  But the amendment’s language is broad enough that a president could claim those words give him authority to raise a debt ceiling by executive action. It might take the courts years to say he was wrong.

The New York Times, whose articles often reflect Obama Administration thinking, has run at least two stories suggesting that the 14th Amendment allows the president to raise the debt ceiling on his own. Already, at least one Democratic member of Congress has insisted that the president should take such action. And it should be noted, above all, that Bill Clinton has told reporters that there is no doubt in his mind that he would have invoked 14th Amendment authority had he faced this situation.

            Obama already had shown he is more than willing to use executive power when faced with opposition on Capitol Hill.  With presidential backing, Arne Duncan, Secretary of Education, has announced that states can get a waiver from NCLB requirements should they agree to  Obama Administration’s Race to the Top guidelines.  Substituting presidential preferences for explicit laws passed by Congress is an extraordinary invocation of executive power, but Duncan says it is necessary to take such actions because of the legislative stalemate.  Well, that NCLB stalemates is small potatoes compared to the debt crisis agonizing the nation today.

So if President Obama is willing to gut NCLB on his own hook, there is no reason to think that he will hold back once the debt crisis reaches its 11:59th hour.  Indeed, a plan to invoke such authority is a likely explanation of presidential actions thus far.

            So far the president has made no explicit publicly presented proposals to resolve the crisis other than calling for a “Clean Bill,”—that is, no spending cuts whatsoever—which is exactly what the executive order would achieve. At one point Obama and Speaker Boehner were alleged to have come close to a “grand bargain,” but at the last minute the president killed that supposed deal by demanding a 50 percent increase in tax revenues, an extraordinary last-minute demand that implied the president did not take the negotiations seriously. Most certainly, they brought the negotiations to an end, as Boehner no longer trusted his negotiating partner.

As strange as that perverse presidential action was, it is understandable—even predictable, if he–from the very beginning–sought a crisis that would force executive action to save the nation from bankrupty.

Nor have the president’s Democratic allies in the United States Senate shown any desire to bring the crisis to an end.  From Harry Reid, there is talk of possible legislation, but, as of now, no bill has yet been brought to the floor for action. Is this because Reid has been unable to get the super majority he needs, or is it part of the plan to create the crisis requiring the invocation of the 14th Amendment?

Assume Speaker Boehner in the House of Representatives manages to rein in the Tea Party and gets his bill through the House.  Assume the Democrats in the Senate refuse to agree to the House legislation and are unable to pass any legislation on their own. At that point, if the president wanted to solve the problem through legislative action could publicly ask the Senate Democrats to reach a compromise with Boehner.  He would very likely succeed, as their future is tied to his.

But perhaps the president wants a stalemate, so he can invoke his executive authority. At that point he says nothing other than to blame the Republicans for the crisis. Then, if the Senate does not act, the president can say he is left with no choice but to invoke the ambiguous language in the 14th Amendment.  He can issue an executive order raising  the debt ceiling—despite the fact that no president previously has ever dared to do just that.

            There is a risk.  The public could become outraged at such a usurpation of legislative power.  Certainly, the Republicans will say that he has become a modern-day Caesar, seizing the powers of the legislative branch for his own purposes.  But the president, whose poll numbers currently are falling, may gamble on the fact that such an exercise of presidential authority could solidify his image as a strong president.

            There is nothing in Obama’s presidential history that suggests that he is unwilling to make such a gamble.  Remember stimulus, remember Obamacare, remember the election of 2010.  In each and every case, Obama went “all in.”  He is not a compromiser; he plays his hand carefully but he is not afraid of trying to run the table.

            I am not saying this will happen. But if Obama’s handling of the NCLB stalemate provides any precedent, then debt limit lifting by executive action is as likely as any other outcome the prognosticators are forecasting.

Invoking the 14th Amendment: How Not To Solve the Debt Crisis

As the (purported) August deadline for raising the debt ceiling inches closer, with no sign of a budget deal between House Republicans and the President, pundits this past week began proposing a way to avoid a budget crisis (see also here) : invoke Section 4 of the 14th amendment to the Constitution.  Section 4 begins: “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, should not be questioned.”  The idea, as pushed by Katrina vanden Heuvel, Garret Epps, Bruce Bartlett and others, is that by invoking the 14th amendment, President Obama simply negates the need for Congress to vote on raising the debt limit, since under the Constitution the government is obligated to pay its debts, congressional approval or not.  Under this plan, he orders Treasury Secretary Tim Geithner to continue borrowing money to pay the government’s debts.   If the House Republicans resist, Obama can simply point to the Constitution and say that the action was necessary to prevent the nation from enduring the calamity that would occur if it defaulted on its debt.

The idea, to be succinct, is stupid.

Admittedly, I’m not a constitutional scholar.  But I do find the argument constitutionally dubious.  The clause was originally intended to reassure lenders that the U.S. government would pay the debts it incurred during the Civil War.  It may be true, however, as advocates of this approach suggest, that the Supreme Court has expanded its reading of the clause to assert that all debts incurred by the federal government are legally binding.  Fair enough. But if we read the 14th amendment in its entirety (take note, students – always read the entire article!), it concludes with this clause:  “Section 5.  The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.”

That’s Congress – not the President or his cabinet members – that is assigned the job of enforcing this clause.  And, historically, it has done so by passing a statute setting a ceiling on how much debt the federal government can incur.  That action is entirely consistent with its authority, as stipulated by the Constitution (see Article I, section 7 in particular) to control the federal government’s purse strings – authority it has zealously safeguarded against presidential encroachment since the nation’s inception.  Consistent with that authority, all previous presidents have recognized the validity of Congress’ setting a debt ceiling.  So, if Obama takes this route and invokes section 4, he not only breaks with the precedent established by previous presidents, he also runs the risk of provoking a constitutional crisis by appearing to encroach on Congress’ fiscal powers.

But even if we grant that there may some constitutional leeway here allowing Obama to act, there is a more fundamental reason why he should avoid this route by all means possible: it is bad politics in the broadest sense of the word.  The Framers created a system of shared (not separated) powers to prevent exactly the type of unilateral action vanden Heuvel, Epps and Bartlett are advocating.  Instead, by forcing the President, House and Senate – each of which caters to a different constituency – to interact in the legislative arena, policy differences are forced into the open.  The idea was to highlight disagreements, stimulate debate and resolve those differences through bargaining and compromise.  In short, if the system works as intended, we should see precisely the type of debate over raising the debt ceiling that is going on now.  Short-circuiting that debate by executive fiat is not only bad politics for Obama – it’s bad for the nation.  Of course, in the current media environment, all sorts of doom-and-gloom prognostications are aired.  All the better to raise ratings, sell advertising and stir debate.  But if you look beneath the bleatings of the punditocracy, what you see in the debate over raising the debt ceiling is a more fundamental discussion about what government does, and how we should pay for it.  This is a debate worth having, and it almost certainly will end in compromise, with Republicans conceding to raise revenue through closing various tax loopholes and Democrats agreeing to spending cuts.  Of course, it makes no sense for either side to signal their willingness to compromise until they have to.  Indeed, the history of the legislative process tells us that Congress does not legislate until the political costs of not doing so are greater.  If the sky-is-falling crowd is correct, neither side wins by allowing the U.S. to default on its debt.  So some type of agreement will be reached – if the constitutional-based system of separated institutions sharing powers is allowed to work as the Framers intended.

Could I be wrong? In this intensely polarized environment, in which elected officials of both parties pay increasing attention to the ideological extremists who fund them, aided and abetted by a media that thrives on controversy, don’t we run the risk that they would rather drive the government car over the cliff in a deadly game of budgetary chicken instead of compromising?   Certainly that’s possible.  It may be that some parties truly believe that defaulting on the debt does not pose as big a danger as the sky-is-falling crowd suggests.  Keep in mind, however, that making extreme statements is all part of the gamesmanship central to the bargaining process.  I’m not willing to discard two centuries of evidence suggesting that legislative compromise occurs only when the alternative is politically unacceptable to all parties involved on the basis of media hype and loose talk.

In the meantime, invoking the 14th amendment is a bad idea – for Obama, for Congress, but most importantly, for us.