Yahoo Sports Biden, Don’t Celebrate Debt Ceiling Deal. Instead, Take It to Court
President Biden has taken a victory lap, praising the debt ceiling deal that helped avert the wholly manufactured crisis of a potential default. But this is no moment to celebrate. Instead, this is a moment to sue.
Biden rightfully acknowledged the debt ceiling is likely unconstitutional in the lead-up to this deal. And he was right that litigation in the days leading up to the so-called “X Date” (when the U.S. couldn’t pay its bills) would only destabilize debt markets, causing exactly the same sort of harm as default. But with this deal done, we have years until the debt comes up again, and we have to sue.
Biden’s Debt Ceiling Waffling Proves He’s No FDR
Biden is temperamentally opposed to these sorts of tactics. He loves the chance to hold up the bipartisan work of Congress he served in for so long. But the truth is that this deal isn’t just a mountainous monument to mediocrity, it isn’t just going to push millions of Americans into destitution and bankruptcy. It’s a ticking time bomb for the economy.
Biden claimed in his first Oval Office address that he’s “never been more optimistic about America’s future,” but that’s hard to square with the reality of what we just went through. No American is better off because the GOP house built an economic weapon of mass destruction, and no one is truly secure when we only delayed the possibility of financial Armageddon for two years. The President may believe that “the only way American democracy can function is through compromise and consensus,” but compromise built on extortion is hardly good-faith consensus.
Progressive Democrats certainly haven’t celebrated. House Progressive Caucus Chairwoman, Rep. Pramila Jayapal, D-Wash., said in a statement that the deal “sets a very dangerous precedent—that Republicans can ignore the rule of law, ignore our obligation to pay our debts, and ignore the needs of our constituents, all to advance their political priorities.” Progressive standard bearer Rep. Alexandria Ocasio-Cortez, D-N.Y., told Roll Call, “You are cutting food assistance, you are pushing through a disastrous pipeline, you are causing harm to the environment and you’re holding the entire U.S. economy hostage at the same time.”
Biden is right to note that “Default would…have destroyed our nation’s credit rating,” but not even this 11th hour compromise is enough to undo the harm even the threat of a default has done. Fitch, one of the major credit ratings agencies, continues to warn investors that U.S. treasuries may not be as secure as they once were, noting that “there has been a steady deterioration in governance over the last 15 years.”
So now that we have two years of breathing room, the task is clear. Rather than simply sitting on the sidelines until the next crisis, Biden must act and challenge the debt ceiling in the courts. Suing this year would have sown chaos, but litigating the question when there’s time to get a decision before the next debt ceiling renewal is the only way to disarm the fiscal weapon the GOP has aimed at the heart of the global financial system. And it’s not a far-fetched option. This is an option Biden opened the door to last month, saying that he hoped after a deal was signed, he’d “find a rationale to take it to the courts to see whether or not the 14th Amendment is, in fact, something that would be able to stop it,”
The argument against the debt ceiling is strong, even before this hyper-partisan judiciary. First, there is the simple text of the 14th Amendment, which was enacted in the aftermath of the Civil War. The amendment categorically states that “the validity of the public debt of the United States…shall not be questioned.” Not only is it unconstitutional for Treasury officials to not pay the debt, it’s unconstitutional for debt ceiling legislation to even call our debt into question by raising the specter of a default.
Beyond the 14th Amendment is the simple absurdity of the debt ceiling itself. Every year, Congress passes legislation to tell the Treasury how much to spend and setting out how much taxes it can collect. When the budget requires more spending than tax revenues, it legally requires the Treasury to fill the gap by borrowing. But when that borrowing exceeds the debt ceiling, the law is an unconstitutional Catch-22.
Effectively, Congress is telling Treasury officials that they both must borrow and cannot borrow more money. Such a measure isn’t just bad lawmaking, it’s not just terrible economics, it’s also patently unenforceable. But we can’t wait until the next debt ceiling debate to challenge the ceiling in court; Biden must order the Justice department to sue now. If we don’t act quickly, debt ceiling litigation will never be resolved before the next debate, and the litigation will spook, rather than reassure borrowers.
So, what will we do if Biden sues and the debt ceiling is struck down? How will we stop the alarming spike in the national debt? We’ll do it the same way every other government on the planet does: through the budget process. The problem with the U.S deficit isn’t that the debt ceiling is too low, it’s that we appropriate far more money each year than we raise in taxes. The solution will require hard choices, cutting seemingly untouchable forms of spending, raising tax rates, or both.
But right now, neither of these urgent tasks is seen as remotely viable. Not only is the GOP House allergic to the thought of raising revenues, it even went as far as to defund the tax police with crippling cuts to the IRS as part of the debt deal. And the massive military budget only continues to grow. With those limits, the debt ceiling is simply fiscal responsibility theater, a show to take the moral high ground on public spending—all while being unwilling to address the true drivers of our debt. In a future without debt ceiling theatrics, we’ll still have a long way to go to improve fiscal policy, but we might actually focus on the choices that really matter.
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