If Barack Obama turns out to be a one-term president, historians may mark the summer of 2011 as the moment his failure became inevitable. At that point, the new right-wing Republican House majority declared the national debt hostage and demanded Obama's surrender to them on all points of domestic policy. When the debt-ceiling statute required authorization of a new federal borrowing limit, they refused to vote on the measure without massive cuts in federal spending and no increase in federal revenue. The crisis was averted by the appointment of an idiotic congressional "supercommittee" that was supposed to identify future cuts, matched with a set of "automatic" cuts that were to take effect if the "supercommittee" failed to come up with a compromise aimed at reducing federal debt. Not surprisingly, the "supercommittee"-perhaps better known as the "Clark Kent committee"-was unable to produce a compromise.
The debt showdown, which paralyzed Washington for much of spring and early summer, severely shook investors' confidence in the creditworthiness of the United States, which had been unquestioned since at least the time of Andrew Jackson. It led Standard & Poor's to issue a first-ever downgrade of the nation's credit rating. A few days ago, Wharton economists Betsey Stevenson and Justin Wolfers documented in Bloomberg the way the showdown also slowed, and almost reversed, the nascent recovery by crippling consumer confidence as well:
Confidence began falling right around May 11, when Boehner first announced he would not support increasing the debt limit. It went into freefall as the political stalemate worsened through July. Over the entire episode, confidence declined more than it did following the collapse of Lehman Brothers Holdings Inc. in 2008. After July 31, when the deal to break the impasse was announced, consumer confidence stabilized and began a long, slow climb that brought it back to its starting point almost a year later.
Almost as damaging, however, was the perception of Obama that emerged from the crisis-that of a weak leader who sought to compromise with his mortal enemies, whined when he was "left at the altar" by John Boehner (note to presidential speechwriters: ixnay on the marital etaphorsmay), and was unable to bring his enemies to heel. Of all the costly sins a President can commit, weakness is the one the public finds hardest to forgive.
In April 2011, when the crisis was only a cloud on the horizon, I modestly proposed a means of escape for the president if negotiations failed: drawing on the language of Section Four of the Fourteenth Amendment ("The validity of the public debt of the United States, authorized by law, ... shall not be questioned"), he could simply declare the debt ceiling unconstitutional to the extent that it required even temporary default ("questioning") on the national debt. Using the inherent powers of the presidency, he could order the Treasury to keep repaying all lawful debts and funding all appropriated programs, even if that required borrowing additional funds. The question is unprecedented, and involves difficult issues of constitutional interpretation, but there was both text and case law to provide support for this reading of Section Four of the amendment.
Within a few weeks, the "Section Four" option was all over the media (I'm not the only person who can read an amendment; they're all there, in the text, but kinda at the bottom). Then the president ended its 15 minutes by announcing on July 22 that "there is a provision in our Constitution that speaks to making sure that the United States meets its obligations and there have been some suggestions that a president could use that language to basically ignore that debt ceiling rule, which is a statutory rule. I have talked to my lawyers, they are not persuaded that that is a winning argument."
Had Obama simply remained silent on the issue, the unspoken threat might have backed Boehner and McConnell down before the impasse wrecked the economy (and perhaps his presidency). They could not have known whether Obama was bluffing, and they could not have known what would happen if they called his bluff. They would have had to gamble: Invoking the Fourteenth Amendment might have produced a public backlash, but it might also have cast the congressional Republicans as not only intransigent but also powerless. The moment reminded me of the 1969 comedy Take the Money and Run, in which criminal klutz Virgil Starkwell, played by Woody Allen, nearly breaks out of prison by brandishing a gun-shaped bar of soap dyed black with shoe polish. Unfortunately, a sudden rain shower leaves Starkwell holding only a handful of black bubbles. A president shouldn't negotiate with Congress by saying, "Don't worry, my gun is made of soap."
The debt limit will apparently become a crisis again sometime after the election. Boehner two weeks ago announced his plan to demand another round of cuts when the current ceiling is reached at the end of the year. (I suspect this manufactured crisis will only happen if Obama is re-elected; if Mitt Romney wins the election, Republicans will suddenly find economic recovery an important value after all.)
Obama should begin now to prepare for the predicted crisis. And if there is any way to climb down from the inane "my attorney Bernie says I can't" comment, he should find it. I called the U.S. Department of Justice to ask whether the Office of Legal Counsel has issued, or is preparing, a formal opinion on the President's possible power under Section Four; the DOJ's spokesman did not return my call.
I believe that the administration stepped away from Section Four because they thought the politics of debt were so poisonous. At a congressional hearing on the debt ceiling, Representative Barney Frank attacked the Section Four idea because "the anger in the country, the political bitterness and the vitriol, would be amplified enormously and you'd let people off the hook for their irresponsibility." (When one witness pointed me out as a scholar who believed the President could invoke Section Four, Frank said, "There are people who believe Elvis is alive too." For the record, I think Elvis is at least gravely unwell.)
The political calculation may have been right, but that doesn't mean that an implied threat to use Section Four would have been bad politics if it had produced a better deal. At any rate this issue now transcends Obama's political interest. Another debt crisis might send the economy (even the world economy) back into free fall. Obama has a responsibility to avoid this, regardless of the political optics; and as I read the Fourteenth Amendment, he is bound by the President's duty to "take care that the laws be faithfully executed."
If Section Four enters the national dialogue again, we will hear many voices expressing shock-shock!-at the prospect of such presidential mischief. Some scholars and commentators sincerely believe that invoking the Fourteenth Amendment would violate the Constitution; I tip my hat to them-both because the question is a difficult one and because good manners require courtesy, even when others do not extend the same courtesy to my side of the argument.
But most of the outrage should be viewed skeptically. To understand why, imagine that Mitt Romney is elected in November, and that in 2013, Harry Reid tries to filibuster a new debt-ceiling increase, devastating the economy of which Romney is now the steward. How long would it take Romney to invoke Section Four? How much of the shock would turn to awe at this great man's leadership?
