He should make this clear even if he signs a temporary increase. I disagree with the administration’s position that the President can not just ignore the debt ceiling if Congress refuses to raise it. Despite what some lawyers are arguing, current federal appropriations law makes it clear that a Presidential decision to exceed the debt ceiling follows well established law and will NOT raise a significant constitutional issue. The real constitutional crisis will occur if he leads the government into default. Since it is clear that the Tea Party members of Congress will try to impeach President Obama, (see Jed Lewison here) no matter what actions he takes, he should take the action that produces the greater good and ignore the ceiling if it is not increased. Otherwise, he jeopardizes our fragile recovery and the 2014 elections for Democrats.
For more background on the issue, the Abbreviated Pundit Roundup for last Friday included another excellent article by Paul Krugman on the consequences of a debt ceiling impasse. In it, he references a WaPo article summarizing a law journal article which concludes that although it would raise serious constitutional issues, the President should ignore the debt ceiling if the ceiling is exceeded. The WaPo article can be found here. The law journal article itself can be found here.
While I agree the President can ignore the debt ceiling if Congress refuses to raise it, my concern is the way in which the legal and constitutional analysis of Presidential authority has been framed. In my experience, there is a simpler way to frame the issues that is more consistent with US law. The debt ceiling may very well raise legitimate 14th Amendment issues but I have yet to see any convincing analysis of them. For example, what is the status of a law that is currently constitutionally valid, but by its own terms, will violate the 14th Amendment if Congress does not act? Had the Administration done a better job of analyzing the legal and constitutional issues involved, they might have decided to fight the inclusion of the sequester in the 2011 debt ceiling increase and the economy would be in much better shape. We might also have a Democratic Congress, notwithstanding the gerrymandering.
If time permits me to write as many diaries as I would like, you will find this a recurring theme, the deterioration in the quality of legal reasoning by both the right and the left. That is the true constitutional crisis, the failure of the courts and the members of the bar to adequately serve their critical role in assuring the success of our Constitution. This failure parallels the problems caused by the so called "serious people" that can be found inside Washington.
The short term increase currently being considered presents the ideal opportunity to make this change to the administration’s position, which will increase the President’s leverage in future budget negotiations. My argument is below the orange scroll.
The WaPo article states:
If Congress failed to lift the debt ceiling by mid-October, President Obama would be caught in a serious constitutional dilemma.Wikipedia states something similar in its article on the debt ceiling.
I strongly disagree, although on balance, that position is more persuasivel than the administration position. However, both reduce the political options that the President has in trying to avoid the crisis and causes him to spend unnecessary political capital to deal with the matter (such as meeting yesterday with Congressional leaders despite saying he would not negotiate over the debt limit). More importantly, because of the ongoing media hyperbole and the failure of the Administration to address this, if he is forced to take action to avoid default, the financial markets will be impacted more than they would be had the administration taken steps to address market concerns about the potential for default if Congress did not act. Undoubtedly, this is what some on Wall Street are hoping for in order to profit from the resulting turmoil, such as another rapid increase in mortgage interest rates like the one earlier this year.
As I stated above, my main objection to the law journal article is not the authors’ conclusion but their failure to look at less politically sensitive arguments that lead to the same conclusion. While I agree that there are some constitutional issues involved, the primary issue is one of statutory interpretation, not constitutional law or usurpation of powers by the President. Laws get ignored every day, not because of some diabolical plot, but because someone legitimately determines that some other law has precedence.
Given the complexity of Federal statutes, there are always conflicts between various statutory provisions, sometimes within the same statute. When I served as an attorney in the US government, I frequently was called upon to prepare opinions to address conflicts in statutory provisions governing the agency’s functions. Various Supreme Court decisions have developed well established rules for how to interpret the laws and to resolve these conflicts. No one viewed these opinions as anything other than a routine legal matter, despite the fact that these opinions often led the agency to violate one Congressional mandate in order to comply with another one.
The debt ceiling conflicts with myriad other constitutional provisions, statutory provisions and court decisions governing the appropriations process. While the stakes may be much higher, I see the same rules of statutory interpretation applying to the breach of the debt ceiling. There is no need to treat this as having the significance of the legal issues that President Lincoln faced or other constitutional issues involving the growth of Presidential authority.
The basic conflict in question is that unless the debt ceiling is raised, its limit will soon conflict with requirements under various other appropriations laws mandating that the President spend money appropriated by Congress. Three key principles of statutory interpretation apply here. First, if at all possible, interpret each statutory provision in a way that reconciles the conflicts and gives meaning to both. Second, assume (perhaps unrealistically) that Congress was fully cognizant of all other existing law in enacting the later provisions. Finally, if the provisions cannot be reconciled, determine their precedence based on which of the provisions was enacted last and which is the more “specific.” Generally, but not always, the rules of statutory interpretation hold that if the competing provisions can not be reconciled, the last takes precedence over the first and the more specific language takes precedence over the more general language. As discussed below, the appropriations statutes clearly take precedence over the debt ceiling law and the President would be acting in accordance with well established principles of law by ignoring the debt ceiling.
Looking at the first principle of statutory interpretation, clearly if the debt ceiling is exceeded, the various appropriations statutes are in conflict with the debt ceiling without any rational way to reconcile them. It is therefore necessary to determine which takes precedent. Without going into too much detail, the stronger argument is that the appropriations statutes are both later in time and the more specific. Therefore, they take precedence over the debt ceiling and must be complied with, even if it means that the debt ceiling is breached. The key points here are the Nixon administration impoundments, the Impoundment Control Act and the 1995 SCOTUS ruling on the line item veto. The Act and the SCOTUS decision make the expenditure of duly appropriated funds by the President mandatory. The debt ceiling law was first enacted in 1917. The legal mandates on the President to spend all duly appropriated funds occurred after that and therefore take precedence over the debt ceiling. By the same token, the appropriations laws are the more detailed laws and so here again take precedence.
The President had a duty to notify Congress of the potential conflict and did so. It was then up to Congress to rectify the potential conflict. Once it became clear that Congress was considering allowing the conflict to occur by not raising the debt ceiling, the President should have informed Congress that should a conflict arise because of the failure of Congress to act, then he would have no choice under the Supreme Court ruling but continue to expend duly authorized appropriations.
There are two other provisions of law which I believe to be relevant. The first is what appropriations law says about the President’s authority to spend money in the absence of an appropriation and the second is the 14th Amendment provision discussed in the law journal article.
It is well established and accepted law that the President can employ personal services in the absence of an appropriation to avoid the suspension of government functions that would “imminently threaten the safety of human life or the protection of property.” A relevant Justice Department opinion on this authority can be found here.
While arguably not directly on point, this is an important factor worth considering. I would argue that Congress, in granting the President this extraordinary emergency authority, indicated its intent that any Presidential actions to respond these emergency circumstances takes priority over even its authority to control the budget. This includes the debt ceiling. Note that this authority grants the power to expend funds to protect not only human life but property of the United States. One could make all kinds of arguments about what is property, but as a practical matter, there is no more valuable US government asset than its ability to borrow money and issue debt instruments. In fact, in terms of its importance to the world economy, there is probably no other single asset in the world that comes close to its value. Failure to protect this asset will cost the US taxpayer trillions in the long run. This would be a violation of the intent of the Anti-Deficiency Act which was enacted to prevent the President to taking actions that would have the effect of coercing Congress to pass additional appropriations.
The final issue is the 14th Amendment which provides in pertinent part:
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.
The law journal article discusses the one SCOTUS decision that addressed the meaning of this provision in a 1935 case concerning changes to the terms of Federal debt (that was decided on other grounds). The court said that:
Nor can we perceive any reason for not considering the expression “the validity of the public debt” as embracing whatever concerns the integrity of the public obligations.Thus we have a SCOTUS decision directly on point that says the President cannot refuse to spend duly authorized appropriations and a SCOTUS decision that went out of its way to make clear that the 14th amendment prohibits anything that threatens the integrity of the public debt. It seems to me to be very clear that the debt ceiling has pretty much been rendered moot by these two decisions and must be ignored if Congress does not raise the ceiling.
The President should have obtained an opinion from the Department of Justice supporitng his authority to ignore the debt ceiling in order to spend duly appropriated funds and issued an Executive Order to the Secretary of the Treasury that, should the debt ceiling in 31 USC 3101 be exceeded, the Secretary is authorized and directed to continue to issue such debt instruments as necessary to meet all existing debt obligations, duly authorized appropriation expenditures and any measures necessary to reverse any previous extraordinary measures taken to avoid a breach.
If you hung in there this long, thanks for reading. Unfortunately, it takes me a lot longer to write a short article than a long one.