Biden can, and should, ignore the GOP’s debt suicide attempt

Conservative commentators have undertaken to pen apologetics for radicals. The subject? Our latest adventure in Republican-threatened financial suicide.

The results are surprising. And because these are likely the best spokespeople Republican extortionists will find, the attempted arguments call for engagement.

Take first, then, this remarkable would-be assurance: A minority of “House Republicans’ insistence on negotiations [about raising the debt ceiling] is not hostage taking,” but, “[i]t is the ordinary stuff of politics.”

It is hard to fathom how anyone not either blissfully or willfully unaware of American budgetary history since 1974, not to say contract law and the U.S. Constitution, could so much as suggest such a thing.

For one thing, threatening default upon debt incurred by your own — that is Congress’s own — already legislated current budget in order to gain leverage you don’t democratically have over next year’s budget is anything but “ordinary.” It is overtly threatening the contract rights of literally millions of innocent people, not to mention our own Constitution and prior budget legislation. And it is doing so simply to get your way when you cannot convince your congressional colleagues of the merits of your own budgetary druthers.

For another thing, this isn’t just “politics” — it is uniquely Republican fiscal kidnapping for ransom. No other party does this. And indeed none but a tiny MAGA faction of ultra-right conservatives within the House (not Senate) Republican caucus itself, to whom Speaker Kevin McCarthy (R-Calif.) apparently considers himself more beholden than he is to our constitutional republic, its laws and its contractual creditors, ever seriously do it. (Remember House Majority Leaders Newt Gingrich (R-Ga.) in 1995, or Eric Cantor (R-Va.) in 2011?)

Next consider these astonishing claims: The 14th Amendment does not, “authorize the president to borrow more money,” and its purpose is “barring the repudiation of debt, not authorizing the means of repaying debt.”

In this case, only a jaw-dropping want of awareness — again willful or otherwise — of how federal budgeting works, what the debt clause of the 14th Amendment is for and how federal debt is legally incurred, issued, managed and redeemed, could account for assertions so spit-takingly false.

Start with the debt clause. President Lincoln and Congress had to grow the national debt 80-fold to put down an insurrection by slaveholding Southern oligarchs aiming to obliterate our republic from without, when they commenced military actions against Fort Sumter and other federal facilities, one month after Lincoln took office in 1861. After that rebellion had been quashed at the unprecedented expense of both “blood and treasure,” worries grew that the same oligarchs who’d orchestrated it would now attempt to obliterate our republic from within, by defaulting on the very debt we had had to incur to put down their revolt.

Default on the national debt would have undermined the Union from within by destroying the very binding agent that our great Founder and first Treasury secretary, Alexander Hamilton, had ingeniously hit upon nearly 100 years earlier. The debt clause of the 14th Amendment was our response to the Southern oligarchs plotting, and indeed, boastfully proclaiming, even as the amendment was still being drafted, their intention to dissolve our federal Union by destroying its credit.

It is more than a little ironic, against this backdrop, that the very (ironically named) rump Republicans now holding our national debt hostage hail principally from the same Jim Crow precincts that spawned the Confederate would-be defaulters whose threats prompted the ratification of the debt clause in the first place. Those who rub shoulders with white supremacists today are no more to be honored in their attempts to force a “national divorce” than were their slave-holding forebears 150 years back.

We said that conservative claims betrayed an unawareness or willful elision of federal budgeting and debt incurring as astounding as their assaults on the 14th Amendment. How so, you might ask?

In 1974, Congress took charge of the federal budgeting process in a way it had not done before. The precipitant was “The Imperial Presidency” of Richard M. Nixon, who had developed a worrying penchant for regularly impounding — that is, refusing to spend — funds that Congress had appropriated for specifically authorized federal programs. In effect, Nixon had been flouting both Congress’s Article I “power of the purse,” of which some commentators make pointlessly heavy weather, and the Constitution’s own Article II “take care” clause, pursuant to which the president must “take care that the laws be faithfully executed.”

Congress’s response was the Congressional Budget and Impoundment Control Act of 1974, pursuant to which Congress, with the president’s signature, legislates in detail: federal expenditures, federal taxes, and hence, federal debt issuance to cover gaps between expenditures and taxes. This, of course, means that debt obligations are fully congressionally legislated — as precisely and as fully as federal taxes and spending themselves are congressionally legislated. The federal budget, in other words, is its own ”debt ceiling” — and indeed floor.

There is, thus, simply no role, since 1974, for the old Liberty Bond Act of 1917 — the source of the ersatz debt ceiling that Republicans now routinely wield like a weapon — to play any longer. It is a children’s toy, not a real gun, and it’s high time the Senate and all reasonable Republicans in the House called the bluff.

Lest there be any doubt on this score, we suggest that conservatives note how the current incarnation of the no longer meaningful (since 1974) Liberty Bond Act of 1917 is a would-be freestanding ceiling whose disregard leaves in place all sections of Title 31 that authorize needed borrowing — per the U.S. Code Subchapter I, sections 3102 through 3106. Conservative critics are accordingly dead wrong again, be it deliberately or inadvertently, in suggesting that we and others are proposing the president borrow without congressional authority.

This takes us to the final irony in one remarkably radical apologetic. For all of the puzzling 17th-century obsession with “the Stuart Monarchy,” the “Glorious Revolution” of 1688 and the congressional “power of the purse” as a response to all that, none of it is of any relevance to the current hostage crisis. Article I, Section 8, let alone the Kings Charles and James, are simply not in dispute here.

We say it because this isn’t about “Biden versus Congress,” or even about “Biden versus the MAGA faction of the House Republican Caucus,” at all. It’s about that minority faction versus … Congress itself.

Again, the debt that our country owes has already been legislated by Congress. The moment it budgets for federal expenditures and federal taxes, Congress also budgets for U.S. Treasury issuance to cover any gaps between the two. And this includes Treasury issuances to cover past-debt redemptions as they come due — debt repayment and servicing themselves being budget line items.

We’ve no idea how conservatives miss this one — can they really be that ignorant of how Treasury redemptions, debt servicing and their place in the federal budget all work?

Why, then, do conservatives and the Republican House minority keep trying to make this about Biden? Biden, after all, is merely trying to do his constitutionally and legislatively appointed duty.

He is trying to “take care” that the congressional budget be faithfully executed as required by the aforementioned 1974 Act, by the “take care” clause and by Train v. City of New York interpreting the same. He is trying to avoid calling into question the congressionally legislated national debt as the 14th Amendment prohibits and the first default in our nation’s unblemished fiscal history would do. He is trying to avoid exercising a line-item veto — that is, ”prioritizing” repayments as some MAGA Republicans have demanded — since that would violate the “presentment clause” as interpreted by Clinton v. City of New York. And so on.

Perhaps rightwingers really have overlooked all of this. But it strikes us as equally likely that, obsessed as they seem to be with “the Stuart monarchs,” seemingly aspiring dictators and other “strong men,” they’re simply hoping that the public will think this is all about “Dark Brandon” and ”White House tyranny” rather than Capitol Hill schizophrenia, as it is.

And this they hope — notwithstanding, that it would be by ignoring our congressionally legislated debts, not by honoring them — that President Biden would be usurping Congress’s power of the purse.

Let’s cure this schizophrenia now. President Biden, Leader Charles Schumer (D-N.Y.), Minority Leader Hakeem Jeffries (D-N.Y.) and all reasonable Republicans should kindly call the MAGA conservatives’ bluff. Simply ignore the 1917 vintage debt ceiling, which is now null and void, and abide by the 1974 budget law. You will be vindicating our Constitution and preserving our constitutional republic in so doing.

Robert Hockett is the Edward Cornell Professor of Law & Public Finance at Cornell Law School and Cornell University, adjunct professor of Finance at Georgetown’s McDonough School of Business and senior counsel at Westwood Capital, LLC. He has formerly worked at the Federal Reserve Bank of New York and the International Monetary Fund.

Laurence Tribe is the Carl M. Loeb University Professor at Harvard University and professor of Constitutional Law, Emeritus, at Harvard Law School. He is the author, most recently, of “To End a Presidency: The Power of Impeachment” and has advised three presidents on constitutional issues involving the separation of powers and the 14th Amendment.