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Saturday, July 9, 2011

Obama Planning to Strong Arm Liberals Over Debt Talks?

It increasingly looks like President Obama intends to use the debt ceiling negotiations to force through some sort of deficit-reduction plan, and that this plan will mostly focus on reducing government spending.

For a long time I had been hoping that Obama was playing some kind of advanced 11th-Dimensional chess with Republicans for political purposes, but the Treasury Department’s recent announcement that the 14th Amendment does not provide a “silver bullet” for circumventing the debt ceiling fairly clearly indicates that Obama intends to strong-arm some kind of deal within the next few days.  And that the people he may be intending to strong-arm are liberal Democrats.

The first sentence of Section 4 of the 14th Amendment to the United State Constitutions states:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

(Most of the press reports regarding the 14th Amendment and the ongoing debt ceiling negotiations fail to include the language about “suppressing insurrection or rebellion.”  I thought I’d go ahead and include it because most people who know anything about the 14th Amendment know that it involves citizenship rights and that it was adopted immediately after the Civil War.  Including this language helps make clear why a section dealing with the federal debt would be part of an Amendment that mostly addresses the rights of people born into slavery in the United States.)

In effect, what this means is that any federal obligation – a Treasury bill or a Treasury bond, for example – must be redeemed by the federal government.  The U.S. government can no more refuse to pay the debts it has incurred than Congress can pass a law voiding those debts.  (See Perry v. United States (1935)).  As a result, there has been some argument lately that the statutorily imposed debt ceiling adopted in 1917 may be unconstitutional, or at least that its application may be unconstitutional if – as may occur in just a few weeks – it causes the United States to default on its debt obligations.

I’m no Constitutional scholar, but then I don’t intend to opine as to the constitutionality of the debt ceiling.  I do note that Laurence Tribe, who is one of the nation’s leading constitutional scholars (as well as one of President Obama’s former law professors), recently authored an op-ed in which he maintained absolutely that the 14th Amendment does not provide a constitutional “work around” of the debt ceiling.

Immediately thereafter Timothy Geithner’s Treasury Department announced that neither Geithner nor anybody else at Treasury thought the 14th Amendment could be used in this way.


Look, whether the 14th Amendment does or does not actually provide a constitutional rationale for telling the GOP to go hang now that they are playing chicken with the Full Faith and Credit of the United States is irrelevant.  So long as Obama could credibly threaten to invoke the 14th Amendment as a reason for telling the GOP that he would not cave any further to their increasing demands that entitlement spending be cut he at least had that card to play

And that could have been a very powerful card to have in his pocket.  Even if the Republicans thought he was bluffing and that he never would have dared to ignore the debt ceiling, they could never be sure.  In fact, I think they much more likely would have concluded that Obama was willing to do that – they certainly would be if they were in his shoes. 

Republicans have found the exploit in our federal government:  shamelessness.  For example, prior to the Republican Revolution of 1994 no one seriously thought the filibuster was something to be invoked whenever any substantive piece of legislation was presented; but today we routinely recite the phrase “you need 60 votes in the Senate to get anything done” without pausing to note how ridiculous this is.  Threatening to filibuster literally everything would have been considered unthinkable only a few years ago because then we all believed any party acting to deliberately obstruct government would make itself a pariah; now it is a fact of life about which we don’t even blink.

Moreover, people tend to believe that other people are just like them.  It is why liars are confounded when they meet a truly honest man.  If Obama could credibly tell the GOP that he was shameless enough to simply invoke the 14th Amendment and ignore the debt ceiling, my bet is that a lot of them would have believed him simply because it is exactly what they would have done.  And that threat would at least have provided Obama with some additional leverage over the more recalcitrant Republicans.

But on Friday Treasury General Counsel George Madison submitted a letter to the New York Times in which he explicitly stated Treasury’s position:  the debt ceiling is a binding legal constraint, and the 14th Amendment does not allow the President to disregard the statutory debt limit.  And with that, one more arrow was removed from the President’s quiver.

I cannot believe that Treasury would take such a public action without first clearing it with the President.  Geithner and Madison must have known that in making this declaration they might have been removing a lever of power that the President could have been counting on – they must have cleared this with Obama beforehand.

Which means that Obama intentionally set out weaken his own bargaining position and strengthen that of the GOP.  We are now only weeks away from the drop-dead date of August 2nd by which the debt ceiling must be raised or else the United States will go into default, with all of that default’s attendant horrors. 

The only reason I can imagine Obama would be willing to do what he just did, this close to the crisis deadline, is because Obama already has come up with a deal that he thinks is going to fly, and now he needs to make sure there is no wiggle room in which that deal could get blown up.  But if Obama already thinks he has a deal, then that means he has a deal with John Boehner and the GOP.  And that means that the people Obama thinks might squawk about and attempt to blow up whatever he is about to put forward are the liberal Democrats who – just as a f’rinstance – might not be enthused to see Medicaid, Medicare, and Social Security benefits on the chopping block. 

But the deadline is looming, and now Obama can’t rely on the 14th Amendment to avoid default.  So if he already has a deal and has intentionally painted himself into a corner without any more room to maneuver, and if the liberal Democrats aren’t willing to completely torpedo the global economy, then the liberal Dems might once again be forced to swallow something really, really nasty.

At least, that is what the situation looks more and more like to me.

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