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The Debt Ceiling and the Imperial Presidency

Russell Korobkin has a post up discussing what the Treasury Department’s ideal policy is for paying the U.S. Government’s obligations in the event that the debt ceiling isn’t raised. Personally, I find this problematic, because the Treasury Department doesn’t actually have any legal authority to prioritize payments. Felix Salmon isn’t as bothered. He relies on a GAO report from 1985 that states that in the absence of Congressional direction, the Secretary of the Treasury is empowered to prioritize payments from the government.

Personally, I think that that’s the wrong attitude. In the absence of Congressional authority to prioritize payments, I agree with the Treasury’s sotto voce assurances that it’s just going to make payments in the order they’re received. Any prioritization by Treasury seems, to me, to be a usurpation of Congressional authority by the Executive Branch. Congress made laws that appropriate funds to pay for certain programs. Any prioritization scheme amounts to the Treasury making de facto appropriations decisions.

I think this is worrisome. But on the other hand, it goes to a trend in our politics that has been escalating since the 1960s. More and more, Congress has been willing to simply forego its role in making policy to the President. This trend has only been highlighted during the Obama Administration, because Obama, more than any President in recent memory, has been deferential to Congress’ role as policymaker. We saw that in the Health Care Bill and Stimulus Packages, and we’re seeing it now in the debt ceiling fiasco. The result is an almost desperate flailing by Congress to get the President to do something. That’s a bad thing for Constitutional governance.

Hand in hand with this is that it’s been fascinating to me to see a meme spreading in the conservative sphere, claiming that Obama “has no plan” for the crisis. I find it fascinating for a couple of reasons. First off, here’s Obama’s plan right here. Second, Obama’s stated that he’d sign Reid’s plan.

Third and finally, however, there’s a lot of rhetoric in conservative circles about fidelity to the Constitution. Well, it’s clear who’s supposed to originate budget and revenue related policy: Congress. Not the President. Congress. All the Constitution allows is for the President to veto budget laws. Yes, we’ve established a tradition of the President putting forth policy, but it’s just that — a tradition. And not a healthy one.

One of the reasons that Rome went from being a Republic to an Empire is that the Senate kept abrogating its authority to Caesar. Personally, I’d prefer we not follow in Rome’s footsteps.

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About Alex Knapp
Alex Knapp writes about pretty much everything under the sun, including politics, art, religion, philosophy, sports, music, culture, and science.

Comments

  1. Well said! That giant sucking sound we hear is the leadership vacuum in Congress and in DC.

    Like or Dislike: Thumb up 1 Thumb down 0

  2. Christopher says:

    Why is it that when Obama proposes an unreasonable plan with provisions the republicans say they would never vote for (taxes-why would anyone propose higher taxes in this economy??) you look at him as reasonable, but when republicans take one small part of Obama’s plan away-taxes-suddenly they are being unreasonable? Obama’s plan would have been accepted by the republicans, Obama would have been the hero, and the crisis resolved, if only the increased taxes had been dropped. Even if you disagree, what does one have to do with the other, how does dropping the increased taxes make the spending cuts alone undoable? Yet Obama wouldn’t do that. Republican concerns are for getting the debt problem under control, and thereby continue to win the trust of voters for higher political gains in 2012. What’s Obama’s concern? Shared ‘sacrifice’! Have we ever had a president fight so hard for such a negative, dismally sounding goal?

    Like or Dislike: Thumb up 3 Thumb down 16

  3. ratufa says:

    @Christopher:

    Obama’s plan would have been accepted by the republicans

    Why do you believe that? Remember that Boehner proposed a plan that would have included spending cuts that were greater than the increase in the debt limit, no revenue increases, and also forced a second vote on the ceiling before the election. That plan was not accepted by the Republicans until it was modified to require Congressional approval for a balanced budget amendment before the second vote. If Republicans were not willing to accept Boehner’s first plan, why would they have accepted Obama’s plan?

    Like or Dislike: Thumb up 5 Thumb down 0

  4. Anonne says:

    “Shared sacrifice” is okay, if it means cutting programs that the middle class and poor rely on, but not by increasing taxes a little on the rich? Yep, we are through the looking glass and noblesse oblige is truly dead.

    It is impossible to get close to a balanced budget without increasing revenue. Taxes aren’t pleasant, but we’ve spent so many decades borrowing money to pay for all the things we have, that we have no sense of what things cost and no one is having a real discussion about what we collectively do or don’t want to pay for. Even if you grant the Republican wet dream of getting rid of the Departments of Education, Energy, and the FCC and the IRS without touching the sacred cow of defense spending, you’re still left with an enormous obligation that has to be paid for somehow.

    As Paul Krugman said, “the conclusion is inescapable: Republicans have a mandate to repeal the laws of arithmetic.”

    Like or Dislike: Thumb up 7 Thumb down 0

  5. Christopher says:

    @Anonne:

    “It is impossible to get close to a balanced budget without increasing revenue”? Huh?!? It looks like you are the one who needs a lesson in the laws of arithmetic. We need spending reform, that’s all. Significantly less growth in the federal budget.
    And why is it that liberals like you, Anonne, always want to paint repubs as big slashers? When was the last time we slashed anything? When was the last time we proposed any major earth-shattering destruction of programs? When was the last time we were against ever-increasing budgets?
    We are not against government, not even the IRS. We are against insane-size deficits, unrestricted debt increases, and presidents with no success in healing the economy-not matter who got us here in the first place.
    Republican’s plan? Slow down government growth, ease government regulations to spur business activity and hiring, bring down the size of government, and reform entitlements. We’ve show a clear, concise plan about how we would like to do that. What has Obama done? What is his specific plan to improve the economy? Whatever it is, we know it isn’t shovel ready.

    Like or Dislike: Thumb up 2 Thumb down 13

  6. ponce says:

    This is all kinda pointless.

    We’re approaching the point where decent government employees are just going to have to do what is best for America and then we’ll see if the wingnut-controlled Supreme Court tries to overrule them.

    And none of the right-wing justices really seem up for a fight like this.

    Like or Dislike: Thumb up 2 Thumb down 2

  7. ratufa says:

    @Christopher:

    Republican’s plan? Slow down government growth, ease government regulations to spur business activity and hiring, bring down the size of government, and reform entitlements. We’ve show a clear, concise plan about how we would like to do that.

    What clear, concise plan are you referring to?

    Like or Dislike: Thumb up 5 Thumb down 1

  8. steve says:

    @Christopher: Actually, the plan is to cut taxes for the highest income group. This, at a time when revenues are way down. Spending cuts plus tax cuts at the top mean that the group which benefited the most under the prior administration will continue to benefit the most. That course gave us a very weak recovery and a banking crisis.

    Steve

    Like or Dislike: Thumb up 4 Thumb down 1

  9. Anonne says:

    @Christopher:

    And why is it that liberals like you, Anonne, always want to paint repubs as big slashers? When was the last time we slashed anything? When was the last time we proposed any major earth-shattering destruction of programs? When was the last time we were against ever-increasing budgets?

    You’re good for the lulz, Christopher. Why, there hasn’t been any such slashing because the so-called fiscally responsible Republicans have been increasing spending every time they get in power! Hello, Medicare Part D, the great pander to seniors! Hello, not one but TWO unfunded wars!

    How, exactly, would YOU balance the budget? What would you cut? Be specific. Vague rants against “spending” and “deficits” don’t mean booboo unless you back it up with something concrete.

    We are not against government, not even the IRS. We are against insane-size deficits, unrestricted debt increases, and presidents with no success in healing the economy-not matter who got us here in the first place.

    If you accept that we need a certain amount of regulation and a social safety net (the thing the middle class relies on), what are you going to cut that is meaningful? Oh, let me guess. Fraud, waste and abuse. And foreign aid. And maybe a little defense, if we’re lucky? Well, reality check: that ain’t gonna cut it! Pun intended. You still will need more revenue, because demographics demand it – the baby boomers are starting to retire and social safety net spending will go up as a matter of course, especially if the economy stays down. The only massive increase in spending under Obama has been to the safety net and aid to states, so that we could save jobs.

    Republican’s plan? Slow down government growth, ease government regulations to spur business activity and hiring, bring down the size of government, and reform entitlements. We’ve show a clear, concise plan about how we would like to do that. What has Obama done? What is his specific plan to improve the economy? Whatever it is, we know it isn’t shovel ready.

    LOL. The Republicans’ plan is to make our country dumber, let infrastructure crumble, let corporations run roughshod over workers and consumers, decrease research and development, and give the wealthy a tax break so that everyone else can live hand to mouth in old and not-so-oldage. This is a recipe for bloody revolution.

    They make no distinction between investment spending and other spending, because any “spending” is anathema to them. To spend is to tax. That is basic math. Get some.

    Like or Dislike: Thumb up 5 Thumb down 0

  10. Hey Norm says:

    You’re worried about Executive power…wait until Obama invokes the 14th Amendment.

    Like or Dislike: Thumb up 4 Thumb down 0

  11. JohnMcC says:

    Mr Norm, you have it exactly correct. By not simply passing the legislation that would allow the Treasury to finance the expenses that the Congress has committed the nation to, the Repub TParty faction is twisting the Constitution. In effect, they are giving the Administration and Treasury a line item veto.

    And Mr Christopher is a dolt pretending to be a naif. He ignores the simple fact that the reason that the Treasury sells bonds is in order to pay for programs that the Congress has already required the gov’t to fund. If they were serious about cutting programs, well…they had their chance to show it.

    Anyone who fails to see the difference should lose his keyboard license.

    Like or Dislike: Thumb up 4 Thumb down 0

  12. @Christopher:

    Why is it that when Obama proposes an unreasonable plan with provisions the republicans say they would never vote for (taxes-why would anyone propose higher taxes in this economy??) you look at him as reasonable, but when republicans take one small part of Obama’s plan away-taxes-suddenly they are being unreasonable?

    Because the Republicans DID say they would vote for it. The Republican’s original proposal was 85% cuts, 15% tax increases. At each step along the way, the Republicans have set conditions on a deal, which the Democrats have agreed to, and then the Republicans suddenly changed their mind and wanted a completely new deal. Lather, rinse, repeat.

    They’ve become John Travolta’s character from A Civil Action, who is only willing to accept a result if it’s one the other side won’t agree to.

    Like or Dislike: Thumb up 2 Thumb down 0

  13. anjin-san says:

    When was the last time we proposed any major earth-shattering destruction of programs?

    Well, the Ryan plan’s proposal to decimate Medicare was fairly recent…

    Like or Dislike: Thumb up 2 Thumb down 0

  14. jukeboxgrad says:

    Christopher:

    “It is impossible to get close to a balanced budget without increasing revenue”? Huh?!? It looks like you are the one who needs a lesson in the laws of arithmetic. We need spending reform, that’s all. … Republican’s plan? Slow down government growth, ease government regulations to spur business activity and hiring, bring down the size of government, and reform entitlements. We’ve show a clear, concise plan about how we would like to do that.

    You seem to be talking about the Ryan plan, and you also seem to know very little about it. You are claiming we can “get close to a balanced budget without increasing revenue,” because “we need spending reform, that’s all.”

    When you say we can “get close to a balanced budget without increasing revenue,” do you mean anytime soon? Or do you mean after most of us are dead? Because the Ryan plan fails to produce a balanced budget for 50 years. Did you even know that?

    You seem to think that having a balanced budget is important, but it also seems OK with you to wait 50 years before we have one. How does that make sense?

    Like or Dislike: Thumb up 2 Thumb down 0

  15. Pete says:

    @anjin-san:

    When was the last time we proposed any major earth-shattering destruction of programs?

    Actually, we don’t have to; they are on their way to self destruction.

    Like or Dislike: Thumb up 0 Thumb down 1

  16. Pete says:

    @jukeboxgrad: All of you who rail for increased taxes best be aware that taxing the rich 100% will make no difference in balancing the budget because they will simply find ways to avoid taxation. Next, it is the middle class that produces the bulk of our income taxes and since our economy is deflating, there is little or no work; hence no income to produce taxes. You all seem to think the economy will recover like past recoveries but it will not. We are in for a long painful period of economic adjustment as the acute distortions of years of government sponsored corporatism works itself out of the system. This silly argument about revenues versus expenses is like pissing in the wind.

    Like or Dislike: Thumb up 1 Thumb down 1

  17. jan says:

    @Christopher:

    Why is it that when Obama proposes an unreasonable plan with provisions the republicans say they would never vote for (taxes-why would anyone propose higher taxes in this economy??) you look at him as reasonable, but when republicans take one small part of Obama’s plan away-taxes-suddenly they are being unreasonable? Obama’s plan would have been accepted by the republicans, Obama would have been the hero, and the crisis resolved, if only the increased taxes had been dropped. Even if you disagree, what does one have to do with the other, how does dropping the increased taxes make the spending cuts alone undoable? Yet Obama wouldn’t do that. Republican concerns are for getting the debt problem under control, and thereby continue to win the trust of voters for higher political gains in 2012. What’s Obama’s concern? Shared ‘sacrifice’! Have we ever had a president fight so hard for such a negative, dismally sounding goal?

    Like or Dislike: Thumb up 0 Thumb down 4

  18. Anonne says:

    @Pete: No one rational is suggesting that we tax the rich anywhere near 100% at any margin. But the right wing lunatics treat any increase at all as if it was 100% at some margin, with the old socialism canard.

    I think we can agree that it will be a long and painful recovery, because we are not committed to creating jobs in any meaningful way and “shared sacrifice” only means in practice that the social safety net gets cut so the very well off can hoard a few more dollars, and we continue to reduce essential services that fall into discretionary spending.

    The lessons of the past go unlearned.

    The “silly argument about revenues versus expenses ” is the heart of the budgeting process. I don’t know how Republicans garnered a reputation for fiscal responsibility, because they cut revenues while increasing spending every time they are in power.

    Like or Dislike: Thumb up 2 Thumb down 0

  19. jukeboxgrad says:

    they cut revenues while increasing spending every time they are in power.

    Conservatives are definitely in favor of small government, except when they’re running the government.

    Like or Dislike: Thumb up 3 Thumb down 0

  20. Ben Wolf says:

    I’m kind of surprised anyone is actually bothering to engage Christopher’s argument. “Taxes are unreasonable because taxes are unreasonable” is called a tautology, and it means he’s an uneducated moron. Leave it at that.

    Like or Dislike: Thumb up 1 Thumb down 0

  21. Chas says:

    This is the 1860s war starting up all over again…..(not a civil war as the southern people did not want DC and its corrupt regime) We will see the states of this country begin to exercise their Constitutional right of secession and this country will be broken up into peices. Just like the 1860s, the individually formed nation(s) will be fought against by the existing tyrannical government due their no longer financial support! (which was the real reason for this war and not the ‘whitewashed one of slavery) Was the Confederate States of America wrong? ABSOLUTELY NOT!!! Just because a nation is physically overpowered does not make them wrong……it only means they were physically overpowered! And the rights that the southern people fought for then are the same rights of the Declaration of Independance and Constitution that the SAME government is trampling under its feet today!

    Like or Dislike: Thumb up 0 Thumb down 8

  22. Glen Tomkins says:

    “I agree with the Treasury’s sotto voce assurances that it’s just going to make payments in the order they’re received.”

    Well, gee, who or what determines in what order Treasury receives its requests for payment. I’m a military retiree, and if it takes me being at Treasury’s mailbox every morning to fetch their mail for them so that I can put the request for my monthly check on top, well, Treasury has a new volunteer mail flunky.

    The point is that the idea that Treasury can prioritize payments involves you in a reductio ad absurdam if you actually imagine how it will happen.

    You’re absolutely right, Treasury lacks any authority whatsoever to fail to pay each and every spending obligation, because each and every one of them was established by law. The adminstration is not allowed to impound appropriated money, and there’s no exception for impounding in order to make it possible to pay some other obligation. Spending obligations are made by law, and can only be unmade by law.

    So what do we do if there’s no money in the treasury because the ceiling law says Treasury can’t borrow any more, but it needs to to meet all those spending obligations? Well, the debt ceiling law cannot be interpreted to say that, to say that Treasury can stop borrowing anywhere shy of borrowing all it needs to borrow to meet all obligations.

    Even SCOTUS must find some interpretation of existing statutes that lets them all stand, that doesn’t require that one be struck down, before it can do that, nullify one statute because it supposedly creates a legal contradiction. Treasury is legally bound to find some interpretation of all statutes potentially bearing on its actions that lets them all stand, that lets it comply with all of them.

    In this case, the only way to do that is to interpet the debt ceiling in the ceiling law as being an internal control meant to apply only to Congress. Until a century ago, bond issues were approved individually by Congress. When it started delegating to Treasury the authority, and repsonsibility, to borrow to meet obligations, it was thought prudent to put in place a mechanism to force Congress to revisit the size of the national debt from time to time, a necessity that had been present before every time each bond issue had to be approved individually. Nobody ever thought the ceiling had force beyond the halls of Congress, any force other than to force a vote by Congress, until the clown car stopped at the Capitol to disgorge the Teahadists.

    Treasury will have no choice whenever the debt hits the ceiling but to interpret the laws governing it in this common sense and traditional way: that it must pay all legally obligated spending, period, and that therefore it must treat the ceiling in the debt ceiling law as not applying to Treasury, that it must use the authority delegated it by Congress to borrow as much as needed to meet all obligations, and treat that as the debt ceiling that applies to it. No other interpretation will allow all the laws bearing on Treasury to stand, and Treasury is not free to pick and choose what laws stand and which fall. The ceiling in the debt ceiling law is Congress’s internal business, and has no intended application outside of Congress.

    Like or Dislike: Thumb up 1 Thumb down 0

  23. Bill H. says:

    Takes me back to the Henry Paulson “financial Armageddon” days when Congress was standing around saying, “well, we’re waiting for the president to send us a bill.” I thought at the time it was pretty pathetic that they could not write their own bill.

    Like or Dislike: Thumb up 3 Thumb down 0

  24. Barry says:

    Alex Knapp: “One of the reasons that Rome went from being a Republic to an Empire is that the Senate kept abrogating its authority to Caesar. Personally, I’d prefer we not follow in Rome’s footsteps. ”

    You might want to read up on the first century BC and see what actually happened. IMHO, the major fact was that various people won wars and had armies personally loyal to them, which they repeated used to take Rome and butcher their enemies. I don’t think that the Senate was any thing to write home about in a good way, but Julius Ceasar’s coup was the third, at least.

    Like or Dislike: Thumb up 0 Thumb down 0

  25. Barry says:

    @Pete: Pete says:

    “@jukeboxgrad: All of you who rail for increased taxes best be aware that taxing the rich 100% will make no difference in balancing the budget because they will simply find ways to avoid taxation.”

    Yes, the standard lie of the right – ‘raising taxes won’t help, because the rich will just avoid them’. Simultaneously fight like h*ll to keep taxes on the rich low, in spit of the asserted ability of the rich to avoid them.

    Like or Dislike: Thumb up 1 Thumb down 0

  26. Ben Wolf says:

    @Chas: You need to stop drinking.

    Like or Dislike: Thumb up 0 Thumb down 0

  27. Boyd says:

    Sorry for the late response, but I was out getting married over the weekend.

    I usually skip over Alex’s posts because he twists and distorts reality to conform with his reality-defying viewpoints, but this time it’s an out-and-out misrepresentation. There are stronger, likely more accurate, terms to describe it, but I’ll restrain myself.

    Precisely:

    Hand in hand with this is that it’s been fascinating to me to see a meme spreading in the conservative sphere, claiming that Obama “has no plan” for the crisis. I find it fascinating for a couple of reasons. First off, here’s Obama’s plan right here.

    The complaint about not having a plan for the crisis has to do with responding to reality, not the President’s dreamland about what he’d do if he had his way regarding the budget, written back in April. The crisis would not have been solved by Obama’s rainbow-farting unicorns described at the link.

    The criticism Alex “responds” to addresses the administration not having a plan for how to deal with the Treasury running out of cash and borrowing authority, and needing to have a plan on how to spend current revenues after the borrowing limit is reached. Alex is not a stupid man, and is well aware that his retort responds to a straw man of his own making rather than the actual criticism. It’s much easier to win the argument when you get to choose your opponent’s arguments.

    All this is not to say I’m one of the guys saying that there wouldn’t be any big consequences for not raising the debt limit. It just sticks in my craw every time Alex and others misrepresent their opponents so they can feed their egos and create more “evidence” of how smart they are.

    Like or Dislike: Thumb up 0 Thumb down 0

  28. Alex Knapp says:

    I usually skip over Alex’s posts because he twists and distorts reality to conform with his reality-defying viewpoints

    [citation needed]

    The complaint about not having a plan for the crisis has to do with responding to reality, not the President’s dreamland about what he’d do if he had his way regarding the budget, written back in April. The crisis would not have been solved by Obama’s rainbow-farting unicorns described at the link.

    Does the President’s plan reduce the deficit? Yes. Does it reduce it by more than the competing Republican plans? Yes. Did the President offer his support for other plans in the legislature, such as the Reid Plan and the Gang of Six Plan, as of the time of the writing of this post? Yes.

    I don’t think I get your point.

    The criticism Alex “responds” to addresses the administration not having a plan for how to deal with the Treasury running out of cash and borrowing authority, and needing to have a plan on how to spend current revenues after the borrowing limit is reached.

    No, I was responding to the specific criticism I’d seen in the Twitterverse from conservatives that the President had not offered a deficit reduction plan. Moreover, I’m pointing out that the Treasury has no legal authority to prioritize payments, and therefore members of Congress assuming that it can would be a huge abrogation of power to the Executive, which I oppose, because I think Congress, not the President, should lead on domestic policy.

    Alex is not a stupid man, and is well aware that his retort responds to a straw man of his own making rather than the actual criticism. It’s much easier to win the argument when you get to choose your opponent’s arguments.

    Again, I was responding to the specific criticism that the President had offered no deficit reduction plan, which a number of conservative pundits had complained about, and which had no basis in reality.

    All this is not to say I’m one of the guys saying that there wouldn’t be any big consequences for not raising the debt limit. It just sticks in my craw every time Alex and others misrepresent their opponents so they can feed their egos and create more “evidence” of how smart they are.

    Your criticism makes no sense.

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