Rep. Louie Gohmert, known for his colorfully erroneous perceptions of basically everything in politics, over the weekend suggested that if the government defaults on its debts, it could lead to the impeachment of President Obama. He's sort of got a point — but it may be the case that preventing default would guarantee that Obama commits a high crime or misdemeanor.
One of pundits' favorite parlor games of the past few weeks has been speculating about how Obama might use non-Congressional means to either raise the debt ceiling or render it moot. After all, the potential fallout of not raising the debt ceiling is generally understood to be devastating. Gohmert's point, incompletely articulated in the video at right, is that allowing the government to default would be so damaging that the president should be held accountable. In one of her Facebook philippics, Sarah Palin fleshed out that point, such as it is.
There is no way we can default if we follow the Constitution. The Fourteenth Amendment, Section 4, requires that we service our debt first. We currently collect more than enough tax revenue to service our debt if we do that first.
As we noted on Monday, this is largely wrong. We don't have enough tax revenue to pay all of our bills on a day-to-day basis, and the critical qualifier there — "if we do that first" — suggests that the Treasury Department can prioritize its payment system. In other words, it gets some cash in, and pays the bills that most put the government at risk first. We've noted previously that the system of payments and in receipts is so complex that it would be almost impossible to implement such prioritization in any feasible way — even if the government weren't shut down and Treasury were fully staffed. But, then, this is Palin and Gohmert, so you should have consumed any and all nearby grains of salt prior to reading their arguments.
What's interesting is that, if Congress doesn't act, Obama would be put into a position where he essentially has to break a law. Earlier this month, Business Insider quoted an analyst from Morgan Stanley, who pointed out three laws that, in the aftermath of a default, couldn't all be followed. Those laws:
- The Second Liberty Bond Act of 1917 that establishes the debt ceiling;
- The Federal Reserve Act that prohibits the Fed from lending directly to the Treasury; or,
- The 14th Amendment of the Constitution that holds that the debt of the US government, lawfully issued, will not be questioned.
So those laws, in order, mandate that there is a limit on the government's ability to incur debt, prevents the Fed from helping to pay bills, and demands that all bills will be paid.
At The New Yorker, columnist Rick Hertzberg suggests that Obama use the 14th Amendment as rationale for ignoring the 1917 law.
The President is constitutionally sworn to “take Care that the Laws be faithfully executed,” but if he enforces the debt ceiling, established by one law, he cannot meet obligations that other laws command him to fulfill. Nor can he submit to blackmail, lest the Constitution be informally amended to provide that any law, duly passed by the House and the Senate and signed by the President (and, if challenged, upheld by the Supreme Court), may be effectively voided by the action of one faction of one party in one half of the national legislature. And he absolutely cannot permit default, the consequences of which would be global and catastrophic.
Hertzberg also assumes that such a move would lead to impeachment procedings — and suggests that Obama's response should be a shrug.
Saul Jackman of the Brookings Institution offers a third way: declare a state of emergency. "[I]f laws allow the president to declare a national emergency and subsequently act unilaterally (i.e., without the explicit consent of Congress) to resolve that emergency, then the next question is, what constitutes an emergency?"
[T]he President is charged constitutionally both with executing the appropriations bills authorized by Congress as well as protecting the full faith and credit of the United States. … [H]is primary constitutional responsibility is to implement the laws in such a way as to best protect the interests of the nation. And the longer this crisis plays out, the clearer it will become to all involved – especially President Obama – that a state of emergency is upon us, and that the best way he can protect the interests of our nation is to unilaterally raise the debt ceiling.
Jackman suggests that if Obama acts forcefully, "Congress will get in line." That seems very unlikely, since if Congress wanted to solve the debt ceiling crisis, it could do so in an afternoon. The idea that politics will evaporate in the aftermath of such a controversial move is rather optmistic.
There are other options: the much-beloved platinum coin, trickery with treasury bonds. The Obama administration has previously rejected any such ideas, including using the Fourteenth Amendment to supersede the Second Liberty Bond Act. The president's argument has consistently been that the debt ceiling must be raised and that Congress must do it. For those looking to hang Obama out to dry, there's clearly not much incentive to do so quickly.
This article is from the archive of our partner The Wire.