Debt limit leverage benefits Obama, not tea party (take 2)
When we get to the debt limit, which I think we will, here’s what won’t happen. We won’t get a trillion dollar coin, and the Fed won’t issue premium bonds. In other words, no gimmicks. Obama will have a single choice: violate the debt limit or don’t. And he’ll choose to violate it, because the alternative is worse in every way.
Violating the debt limit means continuing to spend as directed by appropriations, and continuing to borrow as needed. It’s likely that the market would demand higher returns in these auctions, but if the auctions were really going badly, the Federal Reserve could buy a lot (or even all) of the issued securities.
Now, the GOP could likely cause court review of several aspects of this scenario. But no matter what happens, the GOP could take Obama to court. Because if he chose to honor the debt limit, Obama would necessarily violate the appropriations laws which direct the government to spend money. Congress could challenge this as well.
So either way, Obama would be forced to break the law. But it’s clear, with a little examination, that the debt limit is what should be broken.
If Obama honored the debt limit, he would be forced to decide how to spend the funds available (assuming that’s technically possible, which is in question). Now, there are good constitutional and rational reasons why interest on the debt would be the first priority. But what then? Obama would have to pick and choose which of the obligations, all duly approved by Congress, he’d fulfill, and which he wouldn’t.
The absurdity here is enormous; the tea party, which believes Obama is incompetent, untrustworthy, or worse, would apparently be okay with allowing him to make such decisions. The GOP would apparently be okay with abdicating the fundamental duty of Congress to decide how to spend money.
Which is the problem. There is no basis in law by which Obama could pick and choose among the various appropriations. No president since 1974 has had ANY flexibility in spending decisions, much less such broad power–the government must spend money as congress, with the President’s approval, designates.
For Congress to assign a prioritization role to the President would be an unprecedented shift of power to the executive branch, one that should be intolerable to the tea party (and everybody else). But their zeal has blinded them to the implications of their windmill-tilting.
I can only imagine the speech, as Obama the law professor describes the problems–practical, rational, and constitutional–that the debt limit and appropriations laws’ opposition creates. Obama would describe exactly how much power the tea party would give him; he could fund only the programs he most favors, or he could spend only in Democrats’ districts. He would lay bare the complete foolishness of the course taken by the GOP, giving all of this power to somebody they claim is a power-grubbing foreign socialist.
And he would explain that this unprecedented shift in power to the executive branch is the reason he MUST choose to ignore the debt limit. And then he would invite judicial review.
The Supreme Court would find Congress’s shirking of its responsibilities intolerable, and Scalia would likely say so. The court would avoid the constitutional questions (as is its wont) and simply rule the debt limit invalid as it conflicts with appropriations laws, which going forward will be understood to inherently authorize the government to borrow as necessary to spend. The debt limit would be wiped away, and the tea party would likely go with it, as it will be revealed to be all hat with no cattle.
And the GOP would be greatly diminished for a time, illustrating the risk of enabling radicals to hijack the party platform.
This is why Obama can say “no negotiations” and actually mean it.