Last night, Politico reported that Republicans entered today’s debt limit negotiations with the White House without any back up plan should the talks fail. “We’re putting stock in the president realizing he has to come up with a solution,” Chief Deputy Whip Peter Roskam (R-Ill.), told Politico, “We’re waiting.” That isn’t good enough.
This morning Reuters confirmed that the Obama administration is not just “waiting” to see how the debt talks pan out. “A small team of Treasury officials is discussing options to stave off default if Congress fails to raise the country’s borrowing limit by an August 2 deadline,” Reuters reports. Among those options: “The contingency discussions … are being led by Mary Miller, Assistant Secretary for Financial Markets, who is effectively custodian of the country’s public debt. Miller’s team has debated whether Obama could ignore Congress and order continued borrowing — by relying on the 14th Amendment of the U.S. Constitution — if it fails to raise the borrowing cap.”
Legal scholars have told The Washington Post that this route is unlikely since “Obama would have to do a few things before he tried to declare the debt ceiling unconstitutional” like ”use the government’s available resources to cover obligations for as long as possible” including “selling the nation’s gold.” The Post also notes that Obama would also have to assert that Social Security and Medicare payments are “public debt of the United States” in the same way that Treasury bonds are.
But this is the same president who just declared that the use of U.S. airplanes for bombing military targets in Libya were not “hostilities” under the War Powers Act. He overruled the top lawyers, his appointees, at the Pentagon and the Justice Department to do it. Does anyone really believe Obama would hesitate to overrule the debt limit in the same fashion?
Republicans need to start putting together a plan should negotiations with the White House fail. There is little they can do in court to stop Obama, but they could maximize the political difficulty of going the 14th amendment route. Without a Republican plan B, Obama could justify the 14th amendment route by saying the alternative was economic catastrophe. Republicans should cut this route off. They could draft a debt limit hike coupled with spending cuts and no tax hikes. Obama would then have to explain why he caused a constitutional crisis in order to get $3 billion in corporate jet tax revenues.