Congress doesn’t establish yearly or aggregate revenues in law. It establishes tax policy, and the actual revenues are functions of that policy, but there is no process by which Congress approves estimates of tax revenue into law.
The closest Congress comes to such a thing is the annual budget resolution, which estimates revenues, and provides for spending caps in order to move the budget process forward. That document isn’t law, and with increasing frequency it sometimes doesn’t even get to a final vote in Congress.
The idea that Congress has a process to establish in law the estimates of revenues and also provides for all expenditures simply isn’t the case. If there is no law which provides for a shortfall between revenues and expenditures, there’s simply no way that Congress implies its approval of issuance of debt… Unless Congress actually votes to authorize that debt be issued.
One poster on the previous page mentioned the “Gerhardt rule,” which is actually the Gephardt rule. The Gephardt rule didn’t automatically pass a law to authorize new debt if the revenues and expenditures didn’t match. It said that if the House of Representatives passed a budget resolution (which is not law!) that assumed "x’ revenues and “y” debt would be needed to fund “z” spending, then a bill would automatically pass the House of Representatives to authorize “y” debt. I think it’s a relatively commonsense rule.
However… the Senate never had such a rule, and any bill generated by this process was subject to debate, amendment, and a vote in the Senate before the bill could be sent to the White House. So, the Gephardt Rule applied to only one of two houses of Congress, and simply didn’t function the way that some people think it did.
“The validity of the public debt of the United States, authorized by law . . . shall not be questioned.” The “as authorized by law” part must be read with Art I Sec 8, which requires Congress to approve debt. If debt were somehow to be issued without an act of Congress, it would not be valid.
Before the debt limit, Congress authorized the issuance of debt for specific purposes, similar to how state and local governments issue debt for a highway or a school. Between 1920 and World War II, Congress seemed to get tired of issuing debt to finance particular activities (like wars and stuff) and just decided to go with an aggregate debt limit.
Every year Congress passes a defense authorization act, which establishes in law the limit of the number of troops in each of the armed services and each of the reserves. So, bad example.
If I commit myself to spending $x, I have by that very act committed myself to actually raising the funds. There aren’t two things here. There’s only one thing. Congress is pretending it can do the former without doing the latter, but that’s just self-contradictory. They may as well pass a bill to require equilateral triangles have only right angles.
If government revenues are estimated to be, say, $5 dollars, and expenditures are approved at a level of $7 dollars, did Congress just imply that the Treasury could raise taxes by $2?
Why can’t the Executive Branch decide that it would rather raise taxes to close the $2 gap?
Congress is totally silent on where the $2 comes from. If the President can assume that it means issuance of debt, why can’t he assume that it means the authority to raise taxes?
At the risk of appearing to be somewhat dim, WTF does that mean, “shall not be questioned”? But it is being “questioned”, isn’t it? I dread following a legal mind down a semantic rabbit hole, but what? Huh?
It seems to me that once the ceiling is hit all bets are off. The executive could stop paying whichever bills it feels like, could authorize more debt, could just strike up the printing press, or could try to raise more tax revenue. We’re in no-mans-land - one branch has been derelict in the execution of its responsibilities. It is, to me, a full-fledged Constitutional Crisis - one that the judicial branch would probably eventually have to resolve.
Personally I’d just stop paying SS benefits to districts whose Representative voted against raising the ceiling - that should get things fixed pretty quickly.
Namely, Newt Gingrich and his disciples who haven’t been run out of Congress yet. “Starve the Beast” is an attempt to do exactly that–to smash the present economic order in the USA.
If I were President, I would totally start dictating the budget by fiat at that point. If Congress would prove incompetent to raise revenue, then I’d just start calling myself Consul of the People and do it myself. I don’t think Obama will do this, though.
It’s a dangerous game they’re playing. If Obama weren’t so respectful of Congress, Congress could find itself irrelevant in a hurry.
I suggested this once, probably on this board. I was *sneered *at.
Apparently the right wing play these games because they know they won’t suffer for it. They’ll draw their entitlements while trying to mess up the budget so much that the next guy gets less.
That’s like saying Congress doesn’t make laws; the National Archivist does, because he causes the laws to be published in the Federal Register, or saying Congress doesn’t authorize the spending of money, the Treasury Department does, because they print the checks.
Obviously that’s wrong. Congress and Congress alone can borrow money on the credit of the United States, just as Congress and Congress alone can authorize the United States to spend money. When the Treasury spends money, it does so at Congress’ behest; when the Treasury borrows money, it also does so at Congress’ behest.
So when Congress authorizes spending, but not borrowing, what should happen? Who decides what gets paid and what doesn’t (since obviously revenues can fund some portion of Congressionally-mandated spending)?
It seems to me that if and when that happens the executive does what it thinks is best and trusts the voters to determine if it chose the right path. If that includes issuing more debt so be it.
The bottom line is that the Constitution doesn’t prohibit any branch of government from doing things that are outrageously stupid. One can’t substitute the courts and the Executive Branch to correct the poor judgment of the voters for electing ridiculously incompetent people into office. If the government wants to ruin the US economy by defaulting on the debt/raising tax rates sky-high/raising the minimum wage to $150 an hour/eliminating all labor and environmental laws, the Constitution isn’t a prohibition on dumb.
If the government ran out of money and couldn’t issue more debt, I think the government would have to adopt well-understood principles of fiscal law to deal with the issue. Just like the Executive Branch can’t impound funds intentionally (i.e., refuse to give any money to a military base within a congressional opponent’s district), the law isn’t so stupid as to require the expenditure of funds when reasonable factors arise (i.e., if there’s a major flood and it simply isn’t possible to build a new highway there, nobody is going to be punished if the funds aren’t spent).
That means the Executive Branch would have great latitude in picking what gets funded if the debt limit were reached and the treasury was running dry, but it couldn’t do so in an arbitrary or punitive way; and when the money runs out, there’s just no damn money to spend. That’s not the President’s job to fix. As a worker for Uncle Sam, I’d fully expect to be furloughed in that case, just like if Congress can’t get its act together to pass an annual budget that includes my salary.
This is where people are confused. Congress in recent history has decided in such situations that they are going to have a statutory “pre-approval” for debt, so the default assumption is when revenues are not sufficiently raised to cover budgeted expenditures, the President has what is functionally a line of credit that Congress has already approved. Thus, Congress is not giving up either its power to control spending or its power to approve debts, it has functionally pre-approved the debt and left it up to the President and his Treasury Secretary to decide when to actually take on that debt.
What people who think the President should just be allowed to raise the debt ceiling are proposing is a situation where, when the mismatch between spending and revenue exceeds the pre-approved “line of credit” amount that Congress had deliberated on and approved, the President should simply be allowed to raise his line of credit as much as he feels is necessary essentially ad infinitum. I don’t think it wholly unreasonable to speculate that maybe that isn’t the best idea.
In practice, most of the time when we hit the debt ceiling what should be done is we take out more debt, so we should just raise the ceiling. But there are good reasons to have a pre-approved ceiling that isn’t 50 quadrillion dollars. By doing it this way Congress maintains its power to make decisions about the debt, one of its core Constitutional functions. Congress will almost always approve the debt ceiling increase, but that doesn’t mean they shouldn’t be involved in approving it.
It’s also not nearly so asinine as people point out. Lots of things can happen to expected revenues to cause a much larger actual budget shortfall than is expected, so it isn’t really accurate to say congress is just trying to have a “fuck you” button. When Congress knows it is simply going to approve the debt ceiling increase, and is fighting over it just to cause trouble for the President, then yes it is being used as a giant fuck you button, but that does not mean it is intrinsically a giant fuck you button. It is not beyond the realm of possibility that depending on various conditions in which revenues are just not coming in how they need to, Congress may look at unexpectedly quick drying up of available credit merits some investigation and perhaps increased revenue measures instead of just increased debt. Likely they’ll never do that, but it’s Congress that gets to make that decision, not the President.
I’m not familiar with any declaration of war or “authorization for use of military force” resolution in Congress that has ever failed to pass, but that doesn’t mean we make that an automatic thing the executive can just use unilaterally, either.
The other is not. This is why I raised the difference between “committed” and “obligated” funds. Congress can simultaneously pass a budget that spends $1000 more than it takes in, and refuse to borrow more than $500. That doesn’t violate any natural laws or mathematical postulates. It’s not even contradictory – just foolish. I
So the Executive must spend the money that Congress has told it to because Congress and not the Executive makes spending decisions, and it must only raise the taxes that Congress has told it to because Congress and not the Executive is authorized to levy taxes, and it must not issue debt that the Congress hasn’t authorized because only Congress has the authority to authorize debt.
That’s what you’re saying? Because it can’t do all three at the moment as they are in contradiction.
Or are you saying that the Executive can pick and choose which legislation it should follow, but when it picks and chooses it should do so only in a fashion you approve of?
It shouldn’t seem that way to you, because the Constitution does not permit that to happen. The executive cannot resolve the problem that way – instead, he must spend less than what Congress has authorized him to spend.
There is no clause in the Constitution that allows the executive to simply do what he thinks is best, even if it runs afoul of the Constitution. I’m sure you can see why such a clause would be problematic.
So now issuing a contract obligating payments of revenues isn’t incurring debt? Only T-bills should properly be thought of as debt, not accounts payable?
Because that’s what you’re asserting, and I’m pretty sure my accountant is going to disagree with you.