Bob Sheak, May 14, 2023
Partisan divide
The controversy over how to deal with the debt-limit crisis grows out of long-standing conflicting policy agendas of the Republicans and Democrats, though there are areas of agreement (e.g., bipartisan support of increases in military spending). Here are some examples of the differences. Republicans favor low taxes, minimal government regulation, maximum development and use of fossil fuels, the privatization of potentially profitable government functions, and cuts in social-welfare programs. Trump’s electoral base wants unregulated gun ownership, the end of abortion, the dominance of Christian nationalism, support of white supremacy, the imposition of tight border security measures. Democrats favor progressive taxes, regulation of gun ownership and use, the support of renewable sources of energy (though Biden has supported some new fossil fuel projects), support of reproductive rights, the separation of “church” and state, fair collective bargaining rules, and funding of social welfare programs.
The current fight in the U.S. government over the national debt reflects such underlying policy differences. Republicans, led by House Speaker Kevin McCarthy want to radically reduce overall government spending by curtailing government’s ability to spend on programs they oppose, and do it in a way the benefits disproportionately the rich and powerful. It is worrisome, that McCarthy and House Republicans seem willing to allow the country to default on the debt, despite the enormous harms that such action would produce. In a word, they want an unfettered form of capitalism. Democrats want to continue supporting government agencies, and looking for ways to both pay the government’s bills while, if necessary, simultaneously raising the debt limit. At the same time, Democrats also want to reduce the national debt, but through taxing the rich and mega-corporations.
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Background on Debt Ceiling
In a January 17, 2023, article for Investopedia, Tim Smith provides some background on the U.S. debt ceiling law, an abstruse legal concept that defines “the maximum amount of money that the United States can borrow cumulatively by issuing bonds” and other securities (https://investopedia.com/terms/d/debt-ceiling.asp). The law was created “under the Second Liberty Bond Act of 1917 and is also known as the debt limit or statutory debt limit.” The justification for the law was to make the federal government fiscally responsible during WWI and thereafter.
The U.S. Treasury Department provides some information on how since 1960 Congress has raised the debt limit: “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents (https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/debt-limit#….).
Defaulting on national debt, a Republican option
Under the U.S. law, the nation would be in default if it went beyond the debt limit and failed “to pay interest payments to bondholders.” In that case, there could be catastrophic economic impacts. In default, the country’s credit rating would be lowered, the cost of servicing the debt would increase, millions of citizens would suffer economically, the economy would plummet, and the international economic position – and influence – of the U.S. would suffer.
Smith points out that, over the years, there “have been a number of showdowns
over the debt ceiling, some of which have led to government shutdowns.” The shutdowns occur when partisan conflict over budgetary agendas advanced by the major political parties is not resolved. Smith refers to examples of near-shutdowns and shutdowns.
“For example, in 1995, the Republican members of Congress, whose views were vocalized by then-House Speaker Newt Gingrich, used the threat of refusing to allow an increase in the debt ceiling to negotiate increased government spending cuts.
“Then-President Bill Clinton refused to make the cuts, which led to a shutdown of the government. The White House and Congress eventually agreed on a balanced budget with modest spending cuts and tax increases.”
“President Barack Obama faced similar issues during his two terms as president. In the 2011 debt ceiling crisis, Republicans in Congress demanded deficit reductions to approve an increase in the debt ceiling. During this time, U.S. Treasury debt was stripped of its triple-A rating by Standard & Poor’s—a rating it held for more than 70 years.
“In 2013, the government was shut down for 16 days after conservative Republicans attempted to defund the Affordable Care Act (ACA) by leveraging the debt ceiling. An agreement to suspend the debt limit was passed within a day, which was when the Treasury was estimated to run out of money.
“The debt ceiling was raised again in 2014, 2015, and early 2017. With U.S. debt exceeding $20 trillion for the first time in September 2017, then-President Donald Trump signed a bill extending the debt ceiling to Dec. 8, 2017. The ceiling was later suspended for 13 months as part of a bill enacted in February 2018. The ceiling came into effect and was increased again in March 2019 when U.S. government debt topped $22 trillion.
“In August 2019, then-President Trump signed the Bipartisan Budget Act of 2019, which suspended the debt ceiling through July 31, 2021. The legislation also lifted spending caps on federal agency budgets, while ensuring that the government could pay its bills in the short term. Suspending the ceiling in this manner eliminated the risk of default for another two years, increasing spending to $320 billion for the 2020 and 2021 fiscal years. The debt ceiling was once again raised, to $31.4 trillion, in December 2021.” Smith writes:
“The approximate amount of the current U.S. debt ceiling, as set by congressional vote on Dec. 15, 2021, and signed into law by President Biden on Dec. 16 of the same year.45 The sum represents a $2.5 trillion increase in the ceiling.”
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The Republican agenda
House leader McCarthy is influenced by extremists in his caucus who expect him to lower government spending, with the exception of military spending, and oppose any tax increases.
Smith points out, “As part of their support to install McCarthy, conservative-faction Republicans have indicated that they would vote against raising the debt ceiling without significant federal spending reductions, setting the stage for political gridlock that could destabilize the financial system.”
McCarthy passes his first debt limit bill
Sahil Kapur reports on April 27, 2023, that “Speaker Kevin McCarthy passed his debt ceiling bill through the House on Wednesday by a wafer-thin vote of 217 to 215, with Democrats unifying to vote against it” (https://nbcnews.com/politics/congress/mccarthy-passes-debt-limit-bill-path-averting-default-uncertain-rcna81652). The title of the legislation is the “Limit, Save, Grow Act.”
According to CNN, the legislation included sizable cuts to domestic programs, sparing the Pentagon’s budget, returning funding for federal agencies to 2022 levels, while aiming to limit the growth in spending to 1% per year. The nonpartisan Congressional Budget Office said that the bill would trim government deficits by $4.8 trillion over 10 years (https://www.cnn.com/2023/04/26/politics/debt-ceiling-house-vote-negotiations/index.html).
Kapur reports: “The Democratic-controlled Senate has promised to throw McCarthy’s bill in the trash, vowing not to negotiate over paying the country’s bills. President Joe Biden has threatened to veto it. But House Republicans will now be less inclined to grant a no-strings-attached debt limit hike after they secured the votes to make an opening bid that would cut spending and roll back key parts of Biden’s agenda.
“‘Now he should sit down and negotiate,’ McCarthy, R-Calif., said Wednesday [April 26, 2023], putting the onus on Biden. ‘We are the only party to take fiscal action … that would lift the debt limit so we wouldn’t have economic damage.’
“But the White House insists there’s no deal to be made other than a simple debt limit bill without policy strings attached. Biden’s advisers see more risk in haggling over whether to pay the country’s bills than in pressuring the GOP not to use the threat of default as a bargaining chip.
“McCarthy’s bill would extend the borrowing limit by $1.5 trillion or through March 31 — whichever comes first — with trillions of dollars in spending cuts over a decade, mostly unspecified, some by killing clean energy tax credits in the Inflation Reduction Act.
“The House bill was crafted to meet a series of demands from the ultraconservative Freedom Caucus, and it was altered in the final stretch to address regional concerns from some Republicans. Republicans in swing districts, after initially hesitating, ultimately fell in line.”
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The effects of the current Republican debt-ceiling proposal
House Vote on ‘Default on America’ Act a Major Political Liability for Republicans
Patrick Gasbard and Navin Nayak report on May 3, 2023, for the Center for American Progress about the House vote on the second Republican offer to settle the debt-limit crisis on their terms. The proposed legislation is titled “Default on America”
House Republicans introduced this bill, “without any hearings, markups, or floor amendments.” Gasbard and Nayak argue that “the ‘Default on America Act’ is a gut punch to America’s middle class: It would dismantle essential investments that these families depend upon, imposing an extreme 22 percent cut in just one year and locking in deep and growing cuts for 10 years.”
“One of the first polls to test support for the bill found that upon hearing that the bill ‘would cut 22% of funding for government programs that are non-military,’ the public opposed it by 25 points, at 56 percent to 31 percent. These results came before the public learned of other cuts that the bill would enact, including to veterans’ care, health care, child care, clean energy, and much more.”
“The bill enacts a $4.3 trillion cut in investments the middle class depends upon while preserving trillions of dollars in tax loopholes and tax cuts for the wealthiest Americans.
Gasbard and Nayak offer a list of some of the effects of default. They write:
“Assuming congressional Republicans impose these drastic cuts equally across all discretionary programs other than defense, here is just a fraction of the devastation the “Default on America” Act will impose on middle-class families:
-Burdensome new red tape on Medicaid that could jeopardize health care coverage for 21 million adults
-A 22 percent cut in K-12 education investments, eliminating more than 100,000 teachers’ jobs and affecting more than 25 million children
-A 22 percent cut in veterans’ medical care—reducing capacity and resulting in 30 million fewer outpatient visits
-A 22 percent cut in public safety on many fronts:
Nearly 30,000 lost jobs among law enforcement officers
-More than 7,000 fewer rail safety inspection days and the shutting down of more than 375 air traffic control towers
-The cutting of more than 1,800 food inspectors, putting the country’s food supply at risk
-A 22 percent cut in Head Start, meaning 200,000 fewer children would be unable to get a spot in early childhood education
-A 22 percent cut in child care, meaning 180,000 fewer children would have care during the day, possibly preventing thousands of parents from going to work
-Repeal of investments in clean energy manufacturing that could risk more than 140,000 new well-paying energy jobs
-A 22 percent cut to the operational funding of the Social Security Administration, which ensures Social Security checks are the correct amount and go to the correct recipients in a timely manner
-At the same time, the bill makes it easier for big corporations and wealthy individuals to cheat or avoid paying taxes altogether, by slashing the tax enforcement budget.
Vote them out of office
Ralph Nader, a consumer advocate and the author, refers to the Republican position on the debt ceiling crisis as “sadistic” in an article for Common Dreams on May 11, 2023 (https://commondreams.org/opinion/gop-debt-limit-vs-people).
“Raising the federal debt limit over the years has secured unconditional routine Congressional passage and was endorsed by presidents Ronald Reagan and Donald Trump. After all, it allows the U.S. Treasury to pay past and existing bills, not expand future spending.
“Routine, that is, until the recent arrival of the mad-dog Republicans with their monetized brains indentured to the war-making military industrial complex and Wall Street speculators gambling with other people’s savings.”
Nader continues: “the GOP cuts represent a congealed and vicious assault against defenseless Americans. Of course, the avaricious plutocrats, with their hands deep in Uncle Sam’s pockets, have been shielded from any financial pain by the demands of these ruthless Republicans.”
“The Republican-demanded cuts totally exclude the vast, bloated military budget, which amounts to over half of the entire federal government’s operational budget, and don’t reduce the huge corporate welfare giveaways and bailouts. Republicans leave intact the huge gaping tax escapes for super-wealthy individuals and giant corporations. The latter bonanza implicitly rejects Biden’s revenue producing proposals to eliminate some of Trump’s 2017 tax cuts for the very rich like Trump’s family.
“A partial litany of the latest heartless GOP horrors that will result from the budget cuts they are anticipated to propose include:
“Reduced funding for nutrition programs for children; reduced Social Security benefits; increased processing delays from past GOP cuts in processing disability benefit decisions and retirement claims; cuts in Pell Grant award levels meant for about 6.6 million low-income college students; damage to federal child-care programs; and the potential elimination of some 170,000 Head Start program slots.
Fewer safety inspections of workplaces (by the already financially starved OSHA); fewer inspections of the railroads, and nursing homes. Tens of thousands of people could lose access to federally funded treatment for opioid addiction. Millions of people would not receive federal student loan forgiveness.
“The GOP demands budget cuts to the health and safety agencies that protect the American people, including the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), the Federal Aviation Administration’s (FAA) air traffic control system, the National Highway Traffic Safety Administration’s (NHTSA) programs for auto safety, and the Federal Emergency Management’s (FEMA) emergency rescue programs.”
“There is another way for the Democrats to defeat the extortion effort by the GOP’s dangerous extremists who are playing hostage with American lives and livelihoods. Focus intensely on six or seven Republicans in the House who either are in Districts won by Biden or have expressed saner views on this gridlock. Focus also on those House Republican members who are retiring. All that Democrats need is a switch of six votes to get the increase in the debt limit approved, leaving the GOP to wallow in its unprecedented viciousness.”
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Debt Default Would “Cripple” U.S. Economy, New Analysis Warns
Jim Tankersley reports on a “new analysis” by the chief economist of Moody’s Analytics, Mark Zandi, on how a debt default would cripple U.S. economy (https://nytimes.com/2023/03/07/us-politics/debt-default-economy.html).
“The U.S. economy could quickly shed a million jobs and fall into recession if lawmakers fail to raise the nation’s borrowing limit before the federal government exhausts its ability to pay its bills on time, the chief economist of Moody’s Analytics, Mark Zandi, warned a Senate panel on Tuesday.
“The damage could spiral to seven million jobs lost and a 2008-style financial crisis in the event of a prolonged breach of the debt limit, in which House Republicans refuse for months to join Democrats in voting to raise the cap, Mr. Zandi and his colleagues Cristian deRitis and Bernard Yaros wrote in an analysis prepared for the Senate Banking Committee’s Subcommittee on Economic Policy.”
“‘The only real option,’ Mr. Zandi said in an interview before his testimony, ‘is for lawmakers to come to terms and increase the debt limit in a timely way. Any other scenario results in significant economic damage.’ At the same time, Zandi
“said he favored eliminating the statutory debt limit entirely to end the threats that a potential default posed to the economy. ‘I just think you want to break that cycle once and for all as best you can, because it’s very counterproductive,’ he said.”
Zandi considers a number of scenarios on how the impasse over the debt ceiling may be resolved.
“In one, Mr. Biden acts to circumvent the debt limit without the help of Congress, inviting a constitutional challenge but potentially minimizing the harm to the economy. White House aides have said repeatedly that Mr. Biden will not pursue that route.” (This is about the President’s possible use of Title Section 4 of the 14th Amendment to avert default, an option greatly opposed by Republicans, which is discussed in a later section).
“In a scenario where lawmakers’ inaction forced the Treasury Department to miss some required payments in order to make others, the analysis predicted a swift backlash from financial markets, akin to the stock plunge in 2008 when Congress at first voted down a program to shore up Wall Street banks as a global financial crisis set in. If, as in 2008, Congress reacted by quickly raising the debt limit, the lingering damage would be enough to cause a mild recession and nearly one million job losses.
“If lawmakers ignored the market warnings and went months without raising the limit, the analysis concluded, “the blow to the economy would be cataclysmic.” Federal spending would plunge, a deep recession would set in and the unemployment rate would spike to more than 8 percent from 3.4 percent.
“But if Mr. Biden were to accept Republicans’ budget blueprint, the analysis found, the resulting drop in federal spending on health care, education and other domestic programs would lead to a recession and widespread job loss. Low-income Americans would most likely bear a disproportionate brunt of the economic pain, it concluded.”
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Can the debt ceiling law be by-passed or ignored?
The option of the 14th Amendment?
Laurence H. Tribe, a university professor emeritus at Harvard and an author, most recently, of “To End a Presidency: The Power of Impeachment,” advances a legal option to avoiding a debt-ceiling crisis (https://nytimes.com/2023/05/07/opinion/debt-limit.html).
“At this moment, at the White House as well as the Departments of Treasury and Justice, officials are debating a legal theory that previous presidents and any number of legal experts — including me — ruled out in 2011, when the Obama administration confronted a default.
“The theory builds on Section 4 of the 14th Amendment to argue that Congress, without realizing it, set itself on a path that would violate the Constitution when, in 1917, it capped the size of the federal debt. Over the years, Congress has raised the debt ceiling scores of times, most recently two years ago, when it set the cap at $31.4 trillion. We hit that amount on Jan. 19 and are being told that the ‘extraordinary measures’ Treasury has available to get around it are about to run out. When that happens, all hell will break loose.
“Taking advantage of that prospect, congressional Republicans are threatening to do nothing unless the administration agrees to slash lots of government programs that their party has had in its sights. If the president caves in to their demands, they will agree to raise the cap — until this crisis occurs again. Then, they will surely pursue the same game of chicken or, maybe more accurately, Russian roulette. It’s a complicated situation, but a solution is staring us in the face,” according to Tribe.
“Section 4 of the 14th Amendment says the ‘validity’ of the public debt ‘shall not be questioned’ — ever. Proponents of the unconstitutionality argument say that when Congress enacted the debt limit, effectively forcing the United States to stop borrowing to honor its debts when that limit was reached, it built a violation of that constitutional command into our fiscal structure, and that as a result, that limit and all that followed are invalid.
Tribe continues: “I’ve never agreed with that argument. It raises thorny questions about the appropriate way to interpret the text: Does Section 4, read properly, prohibit anything beyond putting the federal government into default? If so, which actions does it forbid? And, most important, could this interpretation open the door for dangerous presidential overreach, if Section 4 empowers the president single-handedly to declare laws he dislikes unconstitutional?”
“The question isn’t whether the president can tear up the debt limit statute to ensure that the Treasury Department can continue paying bills submitted by veterans’ hospitals or military contractors or even pension funds that purchased government bonds.
“The question isn’t whether the president can in effect become a one-person Supreme Court, striking down laws passed by Congress.
“The right question is whether Congress — after passing the spending bills that created these debts in the first place — can invoke an arbitrary dollar limit to force the president and his administration to do its bidding.
“There is only one right answer to that question, and it is no.
“And there is only one person with the power to give Congress that answer: the president of the United States. As a practical matter, what that means is this: Mr. Biden must tell Congress in no uncertain terms — and as soon as possible, before it’s too late to avert a financial crisis — that the United States will pay all its bills as they come due, even if the Treasury Department must borrow more than Congress has said it can.
“The president should remind Congress and the nation, “I’m bound by my oath to preserve and protect the Constitution to prevent the country from defaulting on its debts for the first time in our entire history.” Above all, the president should say with clarity, ‘My duty faithfully to execute the laws extends to all the spending laws Congress has enacted, laws that bind whoever sits in this office — laws that Congress enacted without worrying about the statute capping the amount we can borrow.’”
“By taking that position, the president would not be usurping Congress’s lawmaking power or its power of the purse. Nor would he be usurping the Supreme Court’s power to “say what the law is,” as Chief Justice John Marshall once put it. Mr. Biden would simply be doing his duty to ‘take care that the laws be faithfully executed’ even if doing so leaves one law — the borrowing limit first enacted in 1917 — temporarily on the cutting room floor.”
“For a president to pick the lesser of two evils when no other option exists is the essence of constitutional leadership, not the action of a tyrant. And there is no doubt that ignoring the debt ceiling until Congress either raises or abolishes it is a lesser evil than leaving those with lawful claims against the Treasury out in the cold.”
“In any event, Section 4 prohibits the president from permanently stiffing our creditors — even those required to wait their turn after the Treasury runs dry. So even if Speaker Kevin McCarthy and those pulling his strings succeed in making some of those creditors wait, it wouldn’t eliminate our debts; it would merely replace them with i.o.u.s. And that’s just debt in another form.”
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Jessica Corbett also reports on May 8, 2023, for Common Dreams on the option of the President invoking the 14th Amendment Common Dreams
(https://commondreams.org/news/14th-amendment-biden-debt-ceiling). Here’s some of what she writes.
“White House officials said this weekend that Mr. Biden has been publicly and privately adamant that he will not bargain with Republicans over raising the limit. ‘Let’s get it straight: They’re trying to hold the debt hostage to get us to agree to some draconian cuts, magnificently difficult and damaging cuts,’ Mr. Biden told a meeting of cabinet members and other economic officials on Friday [May 5, 2023].
“Citing three unnamed sources with knowledge of internal conversations, The Washington Post reported Monday that White House officials see unilateral actions—from invoking the 14th Amendment to minting a platinum coin worth $1 trillion—as ‘risky choices that could cause lasting economic damage’ but also ‘do not want to take the proposals completely off the table.’”
“The National Association of Government Employees (NAGE), which represents about 75,000 federal employees, cited the 14th Amendment in a federal lawsuit filed Monday that seeks to have the debt limit law declared unconstitutional.
“NAGE’s complaint, which names Biden and Yellen as defendants, argues the debt limit statute ‘is unconstitutional because it puts the president in a quandary to exercise discretion to continue borrowing to pay for the programs which Congress has heretofore duly authorized and for which Congress has appropriated funds or to stop borrowing and to determine which of these programs the president, and not the Congress, will suspend, curtail, or cancel altogether.’”
“The filing adds that NAGE ‘seeks to protect all its members from additional extraordinary measures as well as major spending-related actions that will necessarily be taken without approval of Congress and that result in layoffs, furloughs, requirements for unpaid work, and loss of funding of the pensions and retirement plans of its members.’”
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Tal Axelrod reports for ABC News on May 7, 2023, concerning the risk of a constitutional crisis from using the 14th Amendment to solve the debt-ceiling crisis
(https://abcnews.go.com/Politics/14th-amendment-solve-debt-crisis-good-option/story?id=99140989). Axelrod’s report focuses on an interview Treasury Secretary Janet Yellen gave on ABC News’ George Stephanopoulos program, “This Week.”
“Treasury Secretary Janet Yellen on Sunday said invoking the 14th Amendment to get around the debt ceiling and continue borrowing money to pay the nation’s bills would risk a ‘constitutional crisis,’ downplaying the idea that the amendment would simply solve the looming problem — but she avoided ruling it out entirely.
“Yellen said on ‘This Week’ that the only way for the U.S. to avoid an unprecedented default as soon as next month is for Congress to pass legislation doing so, even as the White House and congressional Democrats appear to be in a stalemate with Republicans over GOP demands to tie steep spending cuts to raising or suspending the debt ceiling.
“Amid that debate, President Joe Biden said on Friday, of trying to use the 14th Amendment as a solution: ‘I’ve not gotten there yet.’
“But it didn’t seem like he took it off the table. So, is it still a possibility?” Stephanopoulos asked Yellen on Sunday.
“‘Our priority is to make sure that Congress does its job,’ she said. ‘There is no way to protect our financial system in our economy other than Congress doing its job and raising the debt ceiling and enabling us to pay our bills. And we should not get to the point where we need to consider whether the president can go on issuing debt. This would be a constitutional crisis.’
“Stephanopoulos followed up: ‘Is that a hard and fast position that the president will under no circumstances invoke the 14th Amendment?’
“All I want to say is that it’s Congress’ job to do this. If they fail to do it, we will have an economic and financial catastrophe that will be of our own making, and there is no action that President Biden and the U.S. Treasury can take to prevent that catastrophe,” Yellen replied, later saying, “I don’t want to consider emergency options.”
“The treasury secretary echoed the president’s position: that the debt ceiling should not be used as leverage as part of Republicans’ negotiations with the White House over the budget.”
“Yellen reiterated that she expects the Treasury Department to no longer be able to pay all of its obligations as soon as June 1, a timeline that has jumpstarted negotiations in Washington.
“‘This would be really the first time in the history of America that we would fail to make payments that are due,’ Yellen said. ‘And whether it’s defaulting on interest payments that are due on the debt or payments due for Social Security recipients or to Medicare providers, we would simply not have enough cash to meet all of our obligations. And it’s widely agreed that financial and economic chaos would ensue.’”
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Another approach: Finding the Public Debt law to be unconstitutional
Everett Wohlers, a retired attorney with extensive government experience, explores legal questions and offers a “solution” on the debt ceiling crisis (https://commondreams.org/opinion/legal-answer-to-debt-ceiling-crisis). Wohlers’ article was published on May 10, 2023. He proposes that the Attorney General prepare a legal finding “that the Public Debt Limit law is violative of the Constitution,” finding that would eliminate the debt limit.
It would up to the Office of Legal Counsel (OLC) in the Department of Justice (DOJ). “The OLC provides legal opinions of the Attorney General when requested by the President or the heads of executive branch agencies as provided in 28 U.S. Code §§ 511 and 512.” Under this authority, the “OLC can and does render opinions that find laws adopted by Congress to be unconstitutional and, therefore, unenforceable. One such opinion, rendered on July 8, 2021, found the provision in 42 U.S.C. § 902(a)(3) that prevented the President from removing the Commissioner of Social Security to be unconstitutional and, therefore, unenforceable. There is no reason that the same approach cannot be used with regard to the Public Debt Limit law.
“In light of the stated intent of the Speaker and his caucus in the House to allow the debt limit to be exceeded by the public debt if they do not get unreasonable concessions from the administration, thereby putting the public debt in question and perhaps outright default or repudiation, the President or the Secretary of the Treasury can request an opinion from the OLC pursuant to 28 U.S. Code § 511 or § 512, respectively, concerning the constitutionality of the Public Debt Limit law, 31 U.S. Code § 3101. As the discussion above has established, that opinion would confirm that the Public Debt Limit law is unconstitutional under one or more of the three provisions of the Constitution. The Department of the Treasury can then, in full confidence, continue to honor the public debt without regard to the Public Debt Limit law.
Therefore: “To eliminate the threat to the economy posed by a potential default on the public debt by breach of the public debt limit, either the President or Secretary of the Treasury Yellen should, without delay, request an opinion from the OLC. The law is so straightforward that an opinion finding the Public Debt Limit law to be unconstitutional and, therefore, inoperable could be issued in short order, before Treasury’s extraordinary measures can no longer prevent the debt limit from being breached.”
The problem with Wohlers’ proposal is that it does not address the issue of the ever-rising national debt. At some point, the fiscal and monetary policies of the federal government must curtail the debt from continually rising.
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Concluding thoughts
The rising national debt is a problem and the current debt limit crisis must be addressed immediately to avoid an economic catastrophe domestically and internationally. In the debate with Republicans over how to respond to the debt-limit crisis, President Biden and congressional Democrats should do their best in working to resolve the crisis to minimize spending cuts and emphasize tax increases or the revocation on Trump’s massive tax cut while he was President.
The longer-term solution is to refashion the budget, something that can only be accomplished by electing majorities of progressive Democrats to the presidency and to both branches of the U.S. Congress.
They can support budgets and policies that directly affect the nation’s debt, that is, to cut military spending and increase tax rates for the rich and powerful.
Additionally, they can advance budgets that ensure the basic needs of all citizens and residents are met, that constitutional protections of citizens are not eviscerated but strengthened, that opportunities are supported for employment, health care, quality education, and that support is given to policies that foster more equality in income and wealth distributions.
There are also trends in global warming and nuclear weapons proliferation that need to be addressed. Global warming can be curtailed and hopefully reversed by phasing out of fossil fuels in all spheres of life.
The current conflict over whether to raise the national debt limit must be resolved if other pressing problems are to be solved and economic, political, and social chaos are to be avoided. Unfortunately, the Republicans in Washington appear willing to have chaos if they don’t get their own way.
Vital issues - challenging pol and econ power 