Does Obama Actually Have a Debt-Ceiling Plan, or Is He Bluffing?

Fourteenth Amendment, trillion-dollar coin, "inherent authority" -- like Melville's Captain Ahab, a president must play the cards he's dealt, and no others.


In Melville's Moby Dick, the whaling ship Pequod crosses the equator on its quest for the White Whale, and in that instant, Captain Ahab smashes his quadrant to the deck and crushes it underfoot.  

No more careful navigation. It is, we understand, Moby Dick or die.

As we hurtle toward the new debt-limit crisis, President Obama has done much the same. He says he won't negotiate spending cuts with a gun to his head. He's also said that he won't invoke § 4 of the Fourteenth Amendment, with its provision that "the public debt of the United States . . . shall not be questioned," to give him authority to continue borrowing once the debt limit has been reached. The Senate Democratic leadership Friday urged him to prepare to raise the ceiling unilaterally; so far, he has remained mum. 

Yet Obama, to all appearances, is the calmest man in this overheated capital as the doomsday clock counts down toward a first-ever U.S. default, and the almost certain global depression that would follow.  

Either Obama believes that the Republicans will, at the last moment, do the right thing, or he has a plan.

Having written exhaustively about the so-called "Fourteenth Amendment option" (see here, here, here, and here), I don't want to belabor that possibility further. Suffice it to say that when I started writing about it, few people in D.C. seemed to know that there was a § 4 of the Fourteenth Amendment; now the possibility is discussed routinely in the media. The provision doesn't by its words give any power to the president; it simply prohibits any default on the debt, however slight. I and others argued then that this kind of ambiguous language has supported presidential power grabs before, and that such a power grab might seem preferable to default.

But Obama has said unequivocally, in 2011 and again after the election, that he will not invoke § 4. In part that may be because he believes -- like his old law school mentor, Laurence Tribe -- that the provision doesn't give him the power.

But people who know the administration's thinking far better than I have suggested that § 4 is also off the table because securities markets would not be willing to accept U.S. bonds issued after it is invoked, knowing that a court challenge would be waiting for any debt incurred on a president's authority alone. And, in addition, they say, the politics are bad: Republicans would love to believe that Obama will solve the crisis, and take the blame for the national debt, without their having to lift a finger.

That leaves two possibilities. One, as noted above, is that the Republicans will, at the last minute, do the right thing. Each of us must form our own estimate of how likely this is; mine echoes something said by George Orwell in 1945: "There are . . . eighty ways in the English and American languages of expressing incredulity -- for example, garn, come off it, you bet, sez you, oh yeah, not half, less of it or and the pudding. But I think and then you wake up is the exactly suitable answer."

The other is that the moment will come when the last accounting trick is played and the president has to do the job he is hired to do: prevent disaster when no one else can be bothered. Lately the public dialogue has shifted from the Fourteenth Amendment to the Trillion-Dollar Coin scam, in which the Treasury mints platinum coins enough to cover the government's obligations and then writes checks based on the money they represent.  

If the Fourteenth Amendment option was strained, the TDC is almost insane in its origin. It draws from a statute designed to allow the Treasury to mint and sell commemorative coins of platinum; no one seriously contends that its drafters considered the possibility of a coin capable of paying off the national debt. Curiously, it has split the legal world along different lines: Obama so far has not ruled it out. Laurence Tribe, who flatly rejected the Fourteenth Amendment option, smiles benignly on the coin; Eric Posner, the most hawkish of presidential power hawks, had previously argued that Obama could pierce the debt ceiling on his "inherent" authority, without even invoking the Fourteenth Amendment, but now claims that the coin option would be impeachable.  

Neither or these two expedients is really a satisfactory solution to the problem, because the problem is this: Can we run a country without a functioning legislature? Congress, by its dysfunction (Senate) and obduracy (House) is systematically abdicating its constitutional role. 

Invoking § 4 might be a violation of the Constitution; minting a TDC would be a silly trick. But Congress is refusing to be Congress is an even greater violation of our fundamental law; it threatens fatal damage to our system.

The moment may be coming when wishing and faith do not suffice. Those are the moments when presidents earn their pay. If that requires reversing course on the Fourteenth Amendment, so be it; if it impels a stupid coin trick, then so it does; and if it imposes a political cost on the president, then he must pay it.

After Ahab smashes the Pequod's quadrant, second-mate Stubb muses to himself, "Well, well; I heard Ahab mutter, 'Here some one thrusts these cards into these old hands of mine; swears that I must play by them, and no others.' And damn me, Ahab, but thou actest right; live in the game, and die in it!"