For the Record: Debt Ceiling

 

Hostage situation. Photo by Matthias Weinberger, 2006.

This is an interesting argument, but I hope it's wrong: that it's indeed Congress's responsibility (14th Amendment) to ensure the government pays its debts, but if they choose not to there's nothing anybody can do about it-- https://t.co/7YqsD2SQcc

— Yas You Like It (@Yastreblyansky) May 15, 2023

All the president can do is beg the hostage takers to let the hostage go, by offering them bribes.

Coincidentally, the bribes are agreeing to repudiation of legislation already passed by Congress (when Democrats ran the House) on health care, food, housing, education, veterans.

— Yas You Like It (@Yastreblyansky) May 15, 2023

The constitutional separation of powers is designed to allow people to ignore the Constitution if they feel like it? Because Mitch McConnell got away with it that one time in 2011? (Yes, that's the only time and he doesn't want to do it again.) pic.twitter.com/qiLqjIjaXv

— Yas You Like It (@Yastreblyansky) May 15, 2023

I mean really, though you can't say he's been very helpful either.

And the president does have powers and precedent for using them. I personally think the platinum coin is too gimmicky, but the other idea, issuing consol bonds (which don't raise the debt because they don't have an expiration date) is better. https://t.co/wP4zjjH4Uu

— Yas You Like It (@Yastreblyansky) May 15, 2023

This is the idea I like, as described by Eric Levitz in New York Magazine:

it has the advantage of being extremely boring and incredibly legal. The Treasury Department has the authority to issue whatever kind of bonds it sees fit. Avoiding default through the sale of consol bonds would not require any epic constitutional confrontation between the executive and legislative branches nor would it involve the creation of an object tailor-made for the ultimate heist. It would merely require the Treasury Department to do something weird — but dully technical — in order to prevent a financial crisis. The Treasury and the Fed have pursued variations on that basic task repeatedly since the 2008 financial crisis and have generally faced little political blowback for doing so.

Of course, in a context where the Treasury’s sale of consol bonds robs the House GOP of leverage, it is likely to spur some controversy. But “it’s not fair for the Treasury Department to prevent a financial crisis by using its well-established authority to sell bonds” does not seem like a winning political argument.

Also see Brad DeLong on the subject.

How can you ask the president to negotiate with hostage takers if you won't allow him any leverage at all? Why is that even his job, when the Constitution explicitly says it's Congress's? He has to do it because "only Democrats have agency"?

— Yas You Like It (@Yastreblyansky) May 15, 2023

For further argumentation on the principle see our friend Peter aka Bethesda at Kos.