Once Again, the Fiscal Cliff

We’ve all heard the gassy rhetoric from “the right” about the “woke left,” the border crisis, and runaway urban crime. And now, as if the verbal bomb-throwers in Congress and the right-leaning media weren’t enough, we can add the shop-worn sloganeering of reborn “fiscal conservatives” over the “debt ceiling.”

Social Activists Versus Fiscal Conservatives

Classically defined, fiscal conservatism means small government and lower taxes. Thoughtful fiscal conservatives with an eye to history recognize the limitations of those tenets. The notion of growth in perpetuity and laissez-faire capitalism gave us The Gilded Age, wild boom and bust swings, not to mention conspicuous wealth imbalance. An imbalance surpassed only by the wealth inequality we see today, accompanied by an increasingly hostile climate.

But unbridled spending in the name of social justice is equally unsustainable. Ultimately, we must pay the bills and there needs to be a plan for that. While there are good reasons to run a deficit — war, national emergencies (COVID-19 for example) and investments in infrastructure all come to mind.

That acknowledged, we cannot allow deficits as a percentage of GDP to get out of control, for the same reason families cannot borrow their way to financial solvency. But while we’re considering resolution of the national debt, there’s another thing we need to acknowledge. The debt limit does not affect spending. It affects borrowing. As defined by statute, the debt limit (or ceiling) is:

“…the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.” (Emphasis mine).

Why a Debt Limit?

Let’s take a trip down memory lane. The U.S. is one of the few nations in the world to have a debt limit. The debt limit (or ceiling) came into being during World War One, as part of the 1917 Liberty Bond Act. It was enacted to give the treasury “…more flexibility in managing finances, by not restricting the purpose for which new debt was issued.” It seems not to have been a problem until 1979, when the government nearly blew through the debt limit.

The Gephardt rule was adopted in response, allowing Congress to raise the debt ceiling to conform to appropriations enacted by Congress, without requiring a separate vote. Until its repeal in 2011, the Gephardt rule was used to pass 15 consecutive increases in the debt limit, without fanfare. Irrespective of which party contributed the President occupying the White House, we should note. Since then, we’ve been treated to this periodic game of chicken with the full faith and credit of the most powerful nation on Earth. As Business Insider recently summarized the problem:

“…every so often, Congress has to ask itself permission to pay America’s bills, and roughly half of it usually doesn’t want to. That’s the ‘ceiling’ that has to be raised.” (Emphasis mine.)

And if you have to ask which half of Congress doesn’t want to, you either haven’t been paying attention or you’re being disingenuous. Republicans seem to be allergic to taxes—especially those levied on corporations and those least needing relief from them. Pop quiz. Does anyone really think this is about fiscal responsibility? To be clear, attention to the national debt is needed. But the time for that is during the appropriation process, not when the bills come due.

A Question of Law?

The 14th Amendment, states:

              “…the validity of the public debt of the United States…shall not be questioned…”

Monday night, Laurence Tribe, who has argued 36 cases before the Supreme Court opined on national television that he’s had a change of heart over the debt limit. He has long opposed the notion that the President might (hypothetically) act unilaterally in a debt crisis, based on the 14th Amendment as quoted above.

But in the course of his appearance Monday night, he explained that he believed we have collectively been asking the wrong question, to wit: “What powers does the President have?” The right question, he explained, was “What duties does the President have? Article II, Section three of the Constitution states:

                 “[the President] shall take Care that the Laws be faithfully executed…”

Professor Tribe noted that appropriations in the budget process create a duty to execute that budget as mandated by Congress. The Budget—it’s expenditures for the public good and its limitations are in fact law. Professor Tribe then asked the follow-up question, (paraphrased imperfectly): “Does Congress have the power to then hinder the President in the execution of a budget it has already passed—a budget that is now law and it is the President’s duty to execute?”

In his opinion, it does not. The 14th Amendment does not give the President the latitude to ignore the lawful debts of the United States, or to decide which debts will be paid. It is his duty, then, Tribe concluded, to act when Congress does not or cannot do so.

Missing the Point?

As much as I wanted to be persuaded by his argument, I wasn’t. Which is not to say the dilemma—and the danger—isn’t real. But does not the “separation of powers” outlined in the Constitution exist to limit the power of each branch of government—obliging them to work together? So, what happens when both sides dig in?

No one wins if we crash through the debt limit. All due respect to my former party, austerity by sabotage is not a solution. Similarly, Democrats’ laudable efforts toward progress on climate rescue and social justice will collapse if Republicans conclude it’s in their best political interests to make good on their threats. Interestingly, Republicans and Democrats appear to have learned different lessons from the 2011 Fiscal Cliff adventure. Senator McConnell has learned that holding the economy hostage is a valid way to negotiate—while President Biden’s experience from the same event has learned negotiating with hostage takers is disastrous.

Once more, the divisive nature of American politics today seems to be hardening into impasse. But is our political division the disease, or is it a symptom? Isn’t the real disease a failure of stewardship and citizenship?

Both sides have their points and as a former Republican turned Independent, I can see them both. But aren’t both sides missing the critical point? The very essence of governance is not the government, or the political survival of representatives increasingly out of touch with the larger society they serve. If we continue to let them get away with it, then we have the government we deserve. Isn’t it time to demand better? Just wondering out loud…

D.B. Sayers is a decorated Marine officer and former corporate trainer turned full-time author with six titles in print and two more works in progress. Grab a free copy of his anthology of short stories here.

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