Earlier this month the USA hit the debt ceiling, and so far the Congress has refused to raise it. The only thing keeping us afloat is a bunch of fancy maneuvering by the Treasury Department, but that will apparently no longer be possible in early August.
Naturally, something has to give. Congress has required the Executive Branch to spend money in various ways–on the military, on entitlements, on corn syrup subsidies. If the budgetary apocalypse actually does come, however, it also has forbidden it a way to fund those same things. Regardless of what Obama etc. do, they’ll be violating some obligation.
But the Constitution guarantees all federal debts. Full stop. Of all the conflicting obligations involved here, it’s unclear to me how anything else could trump it, since debt service is the only one of them explicitly mandated in the Constitution.
I’m obviously missing something, but why is it even hypothetically legally possible for the USA to default? It seems to me that given debt’s ultimate priority, virtually everything else would be on the table. As messy as it’d be, Obama should be able to simply ignore the debt ceiling or redirect funds that were statutorily meant for the military or other discretionary spending.
Any of these options, needless to say, would be deeply troubling, radically empowering the executive branch and undermining fundamental parts of American government. But in disowning their own responsibilities, Congress would have effectively forced the executive branch into a corner where there are really no good answers.
Technical point: Congress hasn’t “refused to raise it” because, IIRC, there hasn’t even been a vote to raise it yet. We have no idea what Congress will or will not do at this point.
Too-late-to-edit addendum: there are certainly Congresspeople who say they won’t, and there is a non-zero number who will follow through. But the national and international markets don’t believe that number is anything to worry about at this point.
Congress exercised its power by creating a law in 1917, and followed ever since, that Congress must amend that same law periodically in order to raise the debt ceiling and authorize itself to borrow more money. In simple terms, the President and/or Congress would be in violation of law if they ignored the debt ceiling law. If your believe either could ignore the law without repercussions (whatever they may be) then you have to believe laws in general are worthless since a governing body, and those who are directed by it, can do whatever they want at any time.
Amendment 14., Clause 4.
My take is Congress is required by this amendment to authorize going into debt. Ignoring the debt ceiling law would be in violation of this Amendment clause.
To ignore the debt ceiling, however you may wish to define that, is not just an economic or political issue. It is a basic issue of legitimate governance. So August 2 comes and goes, and Congress does nothing. Business as usual? If so, then that means to me the fundamental rule of law really no longer exists. Fuck the Constitution, fuck the laws derived from it, we will do whatever we want. Why should the average citizen believe anything Congress does or does not do at that point?
At this point, why should those who hold our debt even trust us to pay them? What if those debt holders then demanded full payment? Oh, pretty please? What is to stop them from “foreclosing” to recover even some of the money owed to them? So China sells its debt for pennies on the dollar to OPEC and OPEC raise the wellhead price overnight to $1,000 a barrel to recover its purchase price, or turns off the oil spigot. Then what? Why should countries believe we would continue to abide by treaties?
Two parties can argue, debate and bitch about anything. But if one party refuses to abide by the “rules” what is to stop the other party from feeling injured and seek retribution, however they choose to define it? So the accused/convicted decides not to go to jail. Neener, neener. Since you are victim, are you going to just stand there and do nothing?
Is the political partisanship bullshit grandstanding worth all of this? Because no matter what side of the political fence you sit, the debt is the debt. It’s politically blind. So will Democratic children be denied a morning breakfast but Republican children can enjoy a full one because the latter party chose not to abide by the “rules” believing nothing will happen?