This Debt-Ceiling Crisis Threatens Democracy as Well as Solvency

By David B. Rivkin Jr. and Lee A. Casey

7 December 2021 in the Wall Street Journal

Congress is about to begin another debt-ceiling fight, and it threatens the Constitution as well as America’s solvency.

Over the past two years, Uncle Sam has borrowed and spent trillions of dollars to address Covid-19. Coronavirus spending added nearly $3 trillion to the national debt this year alone—and that doesn’t count the recently passed infrastructure bill and the pending Build Back Better Act. The unprecedented growth in federal outlays has contributed to inflation, which has reached a 30-year high, and caused annual budget deficits to soar.

The government is about to reach its statutory federal borrowing limit of $28.4 billion. If Congress doesn’t increase the limit, Washington will run out of money to meet its legal obligations. Republicans and Democrats are at loggerheads over how much to spend and whether to enact what the Democrats call “transformational” legislation—measures that would reshape the American economy and increase government’s role in nearly all aspects of life.

The threat to the Constitution comes from one of the options lawmakers are considering: suspending rather than raising the statutory debt ceiling, thereby authorizing the executive branch to borrow an unlimited amount of money for a limited time. Suspending the debt ceiling would undermine the structure of American democracy—particularly when government spending obligations are in flux, and the future direction of key policies is being fiercely contested.

Senate Minority Leader Mitch McConnell has warned Democrats that if they insist on enacting major and costly policy changes on a partisan basis, they will have to increase the debt ceiling without votes from Republicans. That could be accomplished through budget reconciliation, the means by which the Democrats intend to pass the Build Back Better Act with a simple majority. But Democrats are wary of unilaterally raising the debt ceiling, which isn’t popular.

In October, facing a debt-ceiling stalemate and a possible government shutdown, Republicans reluctantly supplied the votes necessary to increase the debt ceiling by $480 billion. That was constitutionally proper, but it bought only a little time. The increase will be exhausted this month, and Mr. McConnell and Majority Leader Chuck Schumer have again started negotiations on the debt ceiling.

Congress usually raises the statutory debt ceiling to a new specific dollar amount, a core part of its constitutional power of the purse. Occasionally, however, Congress (with both parties in the majority) has “suspended” the debt ceiling. As we argued in these pages during the last debt-ceiling crisis, such delegations of power are constitutional only if, as Justice Elena Kagan put it in Gundy v. U.S. (2019), “Congress lays down by legislative act an intelligible principle to which the person or body authorized to exercise the delegated authority is directed to conform.”

The current unsettled budgetary environment makes the constitutional infirmity of suspending the debt ceiling acute. When suspensions were adopted in the past, there was at least a shared understanding between Congress and the executive about where the dollars were to go and how much spending there would be. Previous suspensions weren’t coupled with open attempts to transform the country’s economy and society—to upend the fundamental relationship of government to the governed.

Today’s spending plans are opaque and unpredictable. The estimated cost of Build Back Better alone ranges from $1.75 trillion to more than $5 trillion. That lack of clarity could also dramatically alter the terms upon which the Treasury can find willing buyers for new U.S. debt, greatly increasing debt-servicing costs. Suspending the debt ceiling in these circumstances would mean the executive branch is entirely unbound.

As another debt-ceiling cliff-hanger emerges, Democratic leaders appear committed to a suspension, which again would require Republican support. Giving bipartisan cover to another unconstitutional suspension would be disastrous. Decisions about the levels of spending, borrowing and taxation now under consideration require democratic accountability. Congress is almost evenly divided between the two major parties, a situation that counsels against transformative political and economic changes negotiated in back rooms.

If Democrats believe their programs are meritorious enough to burden the country with trillions of dollars in additional debt, they should accept the political risk of raising the debt ceiling without Republican votes. If Democrats are right, they’ll benefit and Republicans will pay the political price for intransigence. That’s how American democracy works, and why so many of the Constitution’s most fundamental provisions, such as Congress’s power of the purse, were adopted—to ensure accountability and the consent of the people.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush Administrations.

Source: https://www.wsj.com/articles/debt-ceiling-crisis-threatens-democracy-budget-limit-build-back-better-mcconnell-schumer-11638718728

Default and the Constitution: David Rivkin debunks debt ceiling myths

David Rivkin was featured on “The Journal Editorial Report” with host Paul Gigot,  the Wall Street Journal’s editorial page editor.   The video debunks a number of  myths of the impending decisions on raising the debt ceiling.  Mr. Rivkin explains how the 14th Amendment ensures that defaulting on our debt is impossible. The Wall Street Journal’s “Journal Editorial Report” is Fox News Channel feature that runs at least twice during a weekend.