The U.S. does it if they’ve been elected to Congress
While President Joe Biden and Speaker Kevin McCarthy do the debt-ceiling two-step, Treasury Secretary Janet Yellen cautions that the government is “highly likely” to run out of money as early as June 1, reports Axios:
- As the debt ceiling X-date approaches, Treasury is monitoring inflows and outflows to provide a more precise estimate of when the U.S. will run out of money.
- “[W]e have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June,” Yellen warned in a letter to McCarthy on Monday.
- “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
MAGA Republicans holding McCarthy’s short leash demand cuts to the federal budget, or else. Or else they’ll set fire to the country they failed to on Jan. 6 and likely revoke his speakership, Politico suggests, because “any single disgruntled member [is] empowered to orce a vote on ousting him.”
The American Prospect sees the debt limit as an unconstitutional congressional veto on the Executive branch’s responsibility to authority to fulfill existing U.S. obligations:
The Constitution gives Congress the power to make contracts. It does not give Congress the power to renege on these contracts. Once Congress has committed the United States to perform a promise, the president’s duty to “take Care that the Laws be faithfully executed” requires the executive branch to perform. If performance requires payment and Congress has appropriated the funds, Treasury is bound to pay. If Congress does not raise enough revenue to pay for appropriated commitments, then the president’s only choice is to borrow to fill the gap. Each time Congress authorizes a contract and appropriates funds to perform it, it necessarily authorizes borrowing to the extent that Treasury funds fall short.
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Taken literally, the debt limit would allow Congress to exercise a constitutional power with one hand (debt contract) and undercut it with the other (borrowing cap). During the last major constitutional challenge to federal debt in 1935, the Supreme Court made clear in Perry v. United States that Congress could not use its constitutional powers at cross-purposes: “The powers conferred upon the Congress are harmonious … Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.”
That assumes that MAGA Republicans who were prepared to overturn the results of the last presidential elections respect such constitutional guardrails.
The 14th Amendment, passed by Congress in 1866 and ratified by the states in 1868, shields the new borrowing. The section dealing with debt responded to threats of political sabotage attending the readmission of Confederate states. It renounced Confederate debts as “illegal and void,” and in parallel precluded challenges to federal debts, including Union war debts and pensions, using a formula understood at the time to make legal issues non-contestable: “The validity of the public debt of the United States, authorized by law … shall not be questioned.” This sentence, known as the Public Debt Clause, bound future Congresses, future presidents, and, importantly, future courts to uphold the credit of the nation. Borrowing over the debt limit to perform existing federal obligations is authorized by law and deemed valid under the 14th Amendment.
Still, an otherwise by-the guardrails president is reluctant to authorize new borrowing or nullify some debt himself even if existing debt is guaranteed under the 14th. “The problem is it would have to be litigated,” Biden said over the weekend.
“Treasury can prioritize paying interest on Treasury bonds or retiring debt principal when it comes due,” the Wall Street Journal’s editorial board insists. “Treasury has more than enough cash to do this” without authorizing new borrowing. Read: Shut down parts of the government — shut down federal contracts, stop sending out Social Security checks, etc. — to cover creditors. In past partial shutdowns, “the world hasn’t ended.” But if the political fallout lands more on Biden than on Republicans, it wouldn’t hurt the Journal’s feelings. Or Republicans’. But then, they are slow learners.
America does not negotiate with terrorists. Unless, of course, they’ve been elected to Congress.