Why Obama won’t use the “Constitutional Option” for the Debt Ceiling

Talks over increasing the nation’s debt limit have gotten shaky over the past week. Faced with Republican demands for $2 trillion in spending cuts and absolutely no tax increases before Republicans will agree to raise the debt limit, many liberals, law professors, and even a top Democratic senator have begun popularizing the notion that the debt limit is unconstitutional. They argue that President Obama can just ignore this man-made crisis and continue to pay for the US’s fiscal obligations without a raise in the debt ceiling. Their rationale comes from section 4 of the fourteenth amendment, which reads:

 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. (emphasis mine)

It would seem that they have a good case. Our country has legally incurred a large amount of public debt and by not raising the debt ceiling, Congress would be saying that it never intends to repay its legally incurred debts. That seems to be the exact action this amendment was designed to prevent. Also, it is unlikely that anyone would have the standing to sue the treasury in court for ignoring the debt limit.

This seems to be the easy way for Obama to both get out of dealing with an increasingly implacable and uncompromising GOP and to save the economy from a near-certain economic implosion. So why did he appear to rule it out yesterday?

Any expert who seriously discusses the US  budget agrees: the debt ceiling must absolutely be raised. If not, the economy will go into a tailspin and innocent people will suffer as they lose their jobs, Social Security checks and medical coverage. The only problem is polls show that raising the debt ceiling is unpopular. Even when pollsters include the caveat that failing to raise the debt ceiling would be severely damaging to the economy, a plurality still opposes the increase.

Even if the debt limit is unconstitutional, Obama would pay a huge political price for unilaterally declaring it so. Sure, by doing so he would save the economy from a catastrophic collapse (assuming no agreement on debt is made by Aug 2), but he would pay a large political price for getting rid of the debt limit. His numbers on his handling of the debt are already very low and this would just add fuel to Republicans claims that he is a high-spending politician who is out of touch with the American public.

But what about the fact that getting rid of the debt limit would save the economy from a double-dip recession? Wouldn’t Obama be rewarded for protecting the economy from foolhardy and crazed Republicans who would do anything to prevent a tax increase on the richest Americans? In a word, no.

If there is anything Obama has learned in the past 2 and a half years, its that you can’t campaign on what might have been. Republicans can hammer Obama on the economy and his stimulus bill even though independent experts agree that things would have been much worse without Obama’s actions to prop up the economy. We might have had unemployment at 12% without the stimulus, but might-haves don’t run in elections. The banking system might have completely collapsed without TARP, but the fact that we could be in a full-blown depression right now doesn’t make people feel any better about the bailouts. People vote off their current situation and their current impressions. Might-haves or near misses will rarely impact the electorate’s votes.

So, for Obama to get any credit for saving the economy from ruin, or to pin any blame on the Republicans for leading the economy to the abyss, the country actually has to cross the threshold of a default and begin to feel the pain of a government working with only half of its limbs. Otherwise, Obama will be the bad guy. The Obama team seems to see these dynamics at work, and because they seem to be unwilling to let the country default in order to score political points, Obama has offered the Republicans a deal that’s 83% spending cuts and 17% tax hikes. Or in other words, its a plan that’s 83% what Republicans want and 17%  what Democrats would prefer.

Obama has bent over backwards to give Republicans a dream-like deal because he A) does not want the country to default on its debt and B) knows that he can gain nothing from declaring the debt limit unconstitutional. Obama seems to have decided that it would be better to give  the Republicans almost everything they want, rather than to take either of the other two options open to him.

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  1. You’re fundamentally wrong in the basis of your post. Obama won’t use the “constitutional option” because he can’t; the Executive has no say in budgetary matters beyond putting in their funding requests.

    Indeed, any opinion of a POTUS on the federal budget is exactly that, an opinion. He can negotiate; he can use the bully pulpit; he can rant or whine however he likes to, but he doesn’t actually get a say in the matter at the end of the day.

  2. The President declares that he will “preserve, protect and defend the Constitution of the United States.” If Congress passes a law that is unconstitutional (the debt ceiling might fit this description), then the President has the right, and indeed the duty to disobey that unconstitutional law. In this case, that would mean issuing more debt because a “debt limit” is unconstitutional.

    Understand that this isn’t a budgetary debate, per se. A budget has already been passed which spends more than it takes in. A debt limit increase just lets the Treasury (part of the executive branch) issue debt to cover the obligations that Congress has already legally approved. You can read more here:
    http://www.theatlanticwire.com/politics/2011/06/debt-ceiling-unconstitutional/39408/

  3. The debt ceiling is law; the POTUS is required to enforce the laws set forth by Congress. Willfully going against that is itself unconstitutional and an impeachable offense.

    He could fail to defend the law on constitutional grounds if it were challenged in court, but he couldn’t legally sweep it aside.

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