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To Fix the Debt Ceiling, Executive Order not Obama’s Best Option

 U.S. President Barack Obama holds a meeting with small business owners at the White House.

Editor's Note: On the topics of Congressional gridlock, the debt ceiling and the president's power to generate his own solution, Phil Wallach writes in response to a FixGov post by Saul Jackman.

I write to respectfully disagree with my CEPM colleague, Saul Jackman, who says that if America runs hard up against its debt ceiling, President Obama should declare a national emergency and then raise the debt ceiling through an executive order, thereby averting a potential financial crisis.  I am in full agreement that failing to raise the debt ceiling would deliver a potentially catastrophic, self-inflicted wound to our nation—a position, I happily note, that some of our counterparts at the American Enterprise Institute are now powerfully espousing

But responding to this potential calamity by means of a declaration of emergency plus an executive order would be misguided and would do needless violence to our Constitutional order.  Declarations of emergency have indeed played a prominent role in our nation’s history, especially in the post-war era.  But the President has no straightforward “right” to make such declarations.  Nearly all recent declarations of emergency have been made pursuant to emergency Presidential powers conferred by statute—certainly different from the situation with the debt ceiling, which is a law specifically designed to constrain the executive branch’s borrowing decisions and which includes no mechanism for emergency raises dictated by the President. 

The Challenges of an Executive Order

Even supposing that declaring an emergency would be appropriate, issuing an executive order would be the wrong way to proceed.  Executive orders are not meant to unilaterally change existing laws, but rather to determine their execution consistent with statutory language.  That doesn’t mean executive orders are trivial, as matters of great importance rest on how a statute is carried out and how ambiguous provisions are resolved.  But it does mean that an executive order cannot simply say that a clear statutory command is null and void, emergency or not.   I do not know of a single case in which an executive order was used to wipe a duly passed statute from the books.  There is good reason for this: if the President could use executive orders in this way, it would mean the whole edifice of statutory law would be rendered uncertain during emergencies.  Wherever the President felt it was important to depart from the clear commands of the law, he would simply change them.  If the rule of law means anything, it is that our legal code cannot be made subject to the whim of one person in this way.  If extra authority is needed, see the justly famous Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 638 (Jackson, J., concurring opinion) (“When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter. “).  

It should be noted that the idea that President Obama could simply “invoke the Fourteenth Amendment” to nullify the debt ceiling is troubling for all of the same reasons.  As political scientist Greg Weiner points out, the fact that the Fourteenth Amendment clearly says that the nation’s debt “shall not be questioned” does not mean “the President is somehow unilaterally empowered to raise the revenue needed to pay it.”  Indeed, were the President to now interpret the Constitution this way, he would be implying that Congress has no legitimate Constitutional say about the nation’s debt issuance (which would repudiate 224 years of Constitutional practice).  Sure, Jackman thinks it notable that “the Constitution does not clearly state that the President cannot raise the debt ceiling in times of crisis,” but Article I, Section 8, gives the power “To borrow money on the credit of the United States” to Congress quite clearly.

A Different Solution

So what should the President do if he finds himself hard up against the statutory debt limit?  This is a horribly difficult question, and anyone who pretends otherwise is wrongly making light of what would be a serious constitutional crisis.  The President and Treasury Secretary would be wise to delay this moment as long as possible, inventing some new “extra-extraordinary measures” before dealing with the issue head-on.  But if there are really no other options, then there is a strong case to be made that the President should seriously consider breaking the law embodied by the debt ceiling without pretending that his doing so is legal, as our Brookings colleague Henry Aaron argued. 

Wait, isn’t that just what Jackman recommended?  I believe it is different in a crucial way.  It is one thing for the President to say that in order to protect the country, he has been forced to break the law and potentially face the consequences for doing so.  It is entirely another thing for the President to say that he can unilaterally rewrite the law so that his action is perfectly legal.

If the President were really hard up against the debt ceiling, one can plausibly argue that some law would have to be broken, and law professors Neil Buchanan and Michael Dorf have ably argued that breaking the debt ceiling statute would be the least-bad option.  But that argument is not bulletproof, and in any case the President’s making it would at best give shape to what would surely be a raucous and angry national debate including calls for his impeachment, rather than somehow ending the confrontation.  The President’s strongest defense would be that he is a conscientious and law-abiding executive, whose Constitutionally-prescribed duty to “take care that the laws be faithfully executed” has become literally impossible.  He should forthrightly accept political responsibility for choosing the best course available, submitting his action to Congress and to the American people to await their political judgment.  That framing would be infinitely more compelling than saying that, given a national emergency, he possessed the unilateral power to bend existing statutes to his will, clear constraining text notwithstanding.

However you see these difficult issues, two points bear repeating: as a first-order matter of policy, we would be better off without a debt ceiling.  Though Congress may be constitutionally entitled to cap our national borrowing, or even micro-manage it, that does not make it wise for it to do so.  We would be better off if Congress made fiscal decisions exclusively in the budget process, which we can think about ways of improving.  Finally, most importantly, none of this is worth a financial or constitutional crisis, period.  Our elected officials can, should, must find a way to keep things from coming to the point where we plumb the limits of executive branch authority.  Let us hope they make all of this discussion moot, and quick.

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