President Biden: End the Republicans’ Cynical GOP Debt Ceiling Game
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Call Script
My name is __________. I am a constituent, and my zip code is _______. I am a member of Indivisible SF.
You have only a few weeks left to put an end to this cynical Republican debt-ceiling blackmail. MAGA extremists are still threatening to shatter the economy. It’s time to play hardball. You have options:
Enforce the 14th Amendment, which has higher priority than the bogus debt-ceiling law, rather than defaulting on payments.
Delay the debt ceiling financial catastrophe by selling higher-yield premium bonds to investors.
If necessary, circumvent the debt-ceiling law by minting trillion-dollar coins.
America does not negotiate with violent terrorists—and we shouldn't negotiate with economic terrorists either.
Background
Like other sovereign nations, America spends more than it receives in taxes so that it can invest in its people, infrastructure, and economy. Those investments increase national wealth—which increases future tax revenue. The shortfall is covered by investors who buy interest-paying Treasury bonds as a safe and certain way to grow their wealth. The amount of debt owed to bondholders for funds already expended is called the "national debt," and US Treasury Bonds (which, because they are the most reliable investments available, have a AAA rating) are issued to cover that. When expenditures reach the amount in bonds already issued, we reach the so-called “debt ceiling”. Treasury Secretary Janet Yellen has told us that will occur as early as June 1, 2023—three weeks from now. She could also issue premium bonds, with higher rates of return, to delay the shortfall.
The need to regularly raise the debt ceiling is a legal anachronism dating to the First World War, when Congress found issuing new bonds too cumbersome and set a cap on the national debt, requiring that another bill be passed to officially raise it. If that sounds bizarre, it is, and no other country operates like this. It’s also in direct contradiction to the 14th Amendment to our Constitution, which says "The validity of the public debt of the United States, authorized by law…shall not be questioned."
The National Association of Government Employees has filed a lawsuit against Secretary Yellen and President Biden based on the constitutional principle of separation of powers because breaching the debt ceiling forces President Biden to make spending decisions that overturn funding authorizations that Congress has already enacted.
Democrats, as the party that respects both the Constitution and the law as written, have regularly passed legislation to raise the debt ceiling, in order to maintain the full faith and credit of the US economy, no matter which party holds the presidency. Republicans, on the other hand, ideologically hate domestic social spending, but those programs are too important to voters to cut them through the regular legislative process, so Republicans have clamored about the debt ceiling during Democratic presidencies and held the economy hostage in order to force drastic domestic spending cuts again and again.
One condition of the fifteen rounds of voting it took for Kevin McCarthy to become Speaker involved caving in to MAGA Republicans’ demands for another debt ceiling fight. Republicans know most Americans don’t realize we’re so close to the debt ceiling because of the Trump tax cuts for the wealthy enacted in 2017, or that spending during the Trump administration accounts for 25% of our national debt.
We covered the ridiculous debt ceiling myths and ruthless cuts proposed in MAGA Republicans’ 2023 debt ceiling bill in our April 26 Call To Action: Tell Biden and our MoC's: No to the GOP Debt Ceiling Scheme | Indivisible SF.
We agree with Professor Tribe that President Biden should demonstrate bold leadership on behalf of the people by prioritizing the 14th Amendment and the constitutional separation of powers, since the debt ceiling is only breached for spending already obligated by prior Congressional decisions. We like Tribe’s suggested script: “My duty faithfully to execute the laws extends to all the spending laws Congress has enacted, laws that bind whoever sits in this office — laws that Congress enacted without worrying about the statute capping the amount we can borrow.”
References
Secretary of the Treasury Janet L. Yellen Sends Letter to Congressional Leadership on the Debt Limit, 5/01/2023
The Potential Economic Impacts of Various Debt Ceiling Scenarios, White House Council of Economic Advisers, 5/3/23
Government employees union sues Yellen, Biden over ‘unconstitutional’ debt limit law | The Hill 5/08/2023
Why I Changed My Mind on the Debt Limit - The New York Times, Lawrence Tribe, 5/08/2023
Doing Whatever It Takes on Debt, Paul Krugman, NY Times, 5/4/23
Trillion dollar coin? 14th amendment? , Yahoo Finance, 5/07/2023
A Boring Plan for Managing the Debt Limit, (premium bonds), Josh Barro, 1/16/2023
Is debt limit unconstitutional? Answer is yes, some argue, based on the 14th Amendment's public debt clause, ABA Journal, 1/25/2023
Taking Debt Negotiations Seriously, The American Prospect, 5/03/2023
Was Nearly 25% of the US National Debt Incurred During the Trump Administration? | Snopes.com, 1/19/2023
Text of the Republican Debt Ceiling Bill (Limit, Save, Grow Act of 2023), Speaker of the House, 4/10/2023
The Debt Ceiling and the Environment, LegalPlanet, UC Berkeley & UCLA Law, 4/21/2023
The fiscal fights of the Obama administration, Brookings Institution, 12/08/2016 (Republican manufactured fiscal crises of yore)