The Debt-Ceiling Problem, and How to Perpetuate It

As you probably noticed, we recently had another political crisis over the debt ceiling. When the government is spending more money than it takes in, it has to borrow the difference to pay the bills. By law, there's a limit to how much it can borrow. Since total government debt has been growing over time (except for a few years in the Clinton Administration) we periodically bump up against the limit and have to raise it to be able to pay the bills. The recent kerfuffle was over a Republican threat to refuse to raise the debt ceiling, thereby leaving us unable to pay the bills, unless various unrelated political demands were met.

The debt ceiling is in fact completely pointless, because it has no effect on what the government spends, only on whether it has enough cash on hand to pay the bills for what it spends. It's become the subject of two major political crises over the last two years. Can't we do something about it?

Now Eric Posner, a University of Chicago law professor, has written a column for Slate in which he suggests a solution to the debt ceiling problem: amend the Constitution.

[I]t would be easy enough to propose a constitutional amendment providing that “the president shall have the power to enforce Section 4 of the 14th Amendment.” If such a constitutional rule had been in place, President Obama could have announced that he would borrow as necessary to pay interest on the debt. 

As a solution to the problem, this is bizarre.  "Easy enough to propose," indeed. But as Posner notes, "Amending the Constitution is extremely difficult." You remember, the whole thing about two-thirds of both houses and three-quarters of state legislatures. The idea of getting two-thirds of both houses to agree on an amendment like this is mind-boggling.

And yet! Tea Party politicians regard the threat of a debt default as a short-term tactic ... not... as a policy goal that is desirable in itself.... Disagreements about the size of government can proceed apace, and conservatives still can prevail if they obtain majorities for cutting spending. Meanwhile, the financial health of the country is not put at risk. Once tempers cool and people move on to other issues, the amendment process—which will probably take many years—can begin.

Oh, you beautiful dreamer. This gives new meaning to the term "ivory tower." People have just lost their tempers! Once they cool down, they'll see their common interests. Then all conservatives need to do is get a majority for cutting spending. No sweat!

There is a much simpler way of dealing with the problem of recurring debt-ceiling crises: repeal the law. Simple majority in both houses. President's signature. Done.

Is that it? A good chunk of the American public seems to believe that the debt ceiling is in the Constitution. Not so. The debt ceiling was established in 1917. It was made obsolete in 1974, when Congress established a regular budget process to deal with spending. But it remained, I don't know why. Everyone knew it would have to be raised from time to time.

Posner is, of course, aware of all this. He even mentions repeal as one of a number of alternatives to a Constitutional amendment. But, he argues, the "problem with these fixes is that they can last only as long as a majority in Congress want [sic] them to last. A better solution is a constitutional amendment."

To see how strange this line of argument is, suppose the Republicans had won both houses of Congress and the Presidency in 2012. They're all set to repeal Obamacare, when.... Wait! Don't repeal Obamacare! If you do that, what happens if the Democrats come back? They could pass it all over again! Instead of repealing it, let's pass a Constitutional amendment against it.

How enthusiastic do you think the Republicans would be about that idea? They would argue that it wasn't at all easy to pass Obamacare in the first place, so Democrats are not just going to wave their hands and restore it. They would point out that such an approach would leave Obamacare in place for years. They would say that first they would repeal the law. Then they would entertain suggestions about a constitutional amendment.

The only sure results from Posner's approach are, first, that people would continue to believe, wrongly, that the debt ceiling is some sort of Constitutional requirement; and second, that nothing would change for a long time. We should do what you're supposed to do with a bad law: Repeal it.