A lot of Republicans are comforting themselves over their complete rout in the debt ceiling negotiations last night with the fact that they can do this all over again when the debt ceiling has to be raised sometime next month. The thinking is, of course, that the leverage in the negotiations will shift from the Democrats to the Republicans, and Obama will be forced to give up massive cuts to entitlements like Medicare and Social Security to get the debt ceiling raised, all the goodies Obama avoided giving away in this round. It worked like a charm in the summer of 2011 to get trillions of dollars in spending cuts, so why wouldn't it work this time?
President Obama, however, has been clear that he won't play that game with him this time.
"I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up," he said. "If Congress refuses to give the U.S. government the ability to repay these bills on time, the consdequences for the global economy would be catastrophic—far worse than a fiscall cliff."This is exactly the correct sentiment by Obama, but the question on my mind is how exactly will he avoid having that debate?
Federal law requires Congress to authorize the government to borrow any money that is needed to pay for the programs that Congress has passed. And the authority to borrow that money expired two days ago. The Treasury Department has a slate of gimmicks it can use to pay its bills for the next month or two, but there's no avoiding having another nasty fight over raising the debt ceiling when those tricks run out. Congress would have to vote to raise the debt ceiling to avoid all the nasty consequences of not paying our bills you've doubtless read about in the media, from having our credit rating lowered, to not being able to cut checks for entitlements and military pay. Nobody (with the exception of some hard core libertarians who tend to have even wackier ideas and shouldn't be listened to under any circumstance) wants to see us default on the national debt.
But Congress, and specifically the House GOP, are determined not to give Obama and the Democrats a clean vote on raising the debt ceiling, much less voting yes to raising it. They'll need to save face, after allowing a vote that broke the Hastert Rule and allowed taxes on the wealthy to rise with no appreciable cuts to show for it. There is no reason to think that the attitude of the House Republicans will be any different than it was a year and a half ago - in fact, with more extreme, more entrenched Republicans from heavily gerrymandered districts in the 113th Congress, they will probably have even more resolve to make Obama pay for anything he tries to push through.
A popular solution to the dilemma is a "14th Amendment solution", invoking the clause from that amendment that says "The validity of the public debt of the United States, authorized by law...shall not be questioned. " The argument asserts that this gives the executive branch the power and duty to override Congress and take other actions to raise the debt ceiling on their own, including such exotic ideas as minting a trillion dollar coin to artifically give Treasury the funds it needs to pay its obligations indefinitely. However, Obama's Justice Department has already advised against this kind of strategy:
Obama and others in his administration have said they will not rely on the 14th Amendment. At a town hall last week, Obama said that he has “talked to my lawyers” and “they are not persuaded that that is a winning argument.”So, just as there's no realistic chance that Republicans attitude towards a clean debt ceiling increase has changed since 2011, there's also no realistic chance that the Justice Department has changed their attitude towards using the 14th Amendment as an end-around to the problem since 2011.
At his daily briefing Wednesday afternoon, White House press secretary Jay Carney knocked down any suggestion that the president would reconsider.
“Our position hasn’t changed. There are not off-ramps, there’s no way around this, there’s no escape,” Carney said. “You know, having an esoteric constitutional argument won’t reduce the fact that the borrowing authority is due to expire on August 2nd and Congress has the legal authority and only Congress has the legal authority to extend that borrowing authority.”
“The president stood here and told you,” Carney added. “We consulted to see what this was about, but this is not an option.”
In light of all this, what alternative does Obama have but to negotiate to get the debt ceiling raised? He's demonstrated that he's not willing to let the economy go down in flames to make a political point about Republican intransigence. He's not going to use the 14th Amendment to get around dealing with Congress. And he's not going to get a clean debt ceiling increase from Congress.
Unless they have some other strategy that nobody knows about, it seems like Obama has promised something he can't deliver on.