About the Author: Christophe M. Russo is an associate researcher at the Mercatus Center at George Mason University. Prior to joining Mercatus, he advised key Federal Reserve decision makers on monetary policy and sovereign debt management. Follow it @RussoEcon.
Congress urgently needs to raise or suspend the federal debt limit. Even so, I fear our lawmakers are hesitant and delaying. They may hope for executive action, for example, believing President Biden could ask the US Treasury to mint a trillion dollar coin and deposit it with the Federal Reserve. Or that the president could ask the Treasury to ignore the debt limit, arguing that it is unconstitutional under the 14th Amendment. However, to do either would violate our constitutional separation of powers: Article I gives Congress the purse strings and the credit card. If the president took these powers, he would make himself king.
These so-called alternatives flow from a superficial legalism: reading excerpts from the law in a way that suits its purposes, without regard for the larger whole. The trillion-dollar platinum sleight of hand is said to be authorized by legislation allowing the Treasury to mint commemorative coins. The 14th Amendment maneuver is supposedly authorized by Section 4, which asserts the validity of the Northern Civil War debt. The article explicitly states that “the validity of the public debt… must not be called into question”, but it does not grant the president any additional power. It also does not limit the powers of Congress.
Let’s leave the legal details to the lawyers. You don’t need a law degree to see how gadgets like these violate a fundamental constitutional principle: The people’s representatives in Congress hold the power of the stock market, not the president. This superior ideal of Republican government was, in part, enshrined in the borrowing clause of the Constitution (Article I, Section 8, Clause 2): “Congress shall have the power … to borrow money on the credit of United States “.
The executive branch can only borrow money with the authorization of Congress. The debt limit defines this authorization and its limits. Congress created the limit during the World Wars to facilitate (but restrict) wartime borrowing. For the president, to sidestep the debt limit with a clever ploy would be an expropriation of the constitutional powers of Congress.
Whatever the current role of the debt limit in the partisan struggle, it is a problem that Congress itself must resolve. Since May, I have been publicly advocating a solution: marrying a permanent suspension of the ceiling with long-term budgetary corrections and economic reforms. Any solution from Congress will require the hard work and compromise of our lawmakers, just as our founders anticipated.
Yet, on this and other issues, part of the American people denounce the dysfunction of Congress. They demand that the president exercise unconstitutional power for the greater good of the nation. Dissatisfied with the laws and standards of a constitutional republic, they demanded a king. Addressing Parliament on December 5, 1782, at the end of the war, King George III prayed “for America to be free from those calamities, which once proved in the motherland how essential the monarchy is. to the enjoyment of constitutional freedom “. (A similar quote is apocryphal attributed to the King when he first met then Ambassador John Adams: “I pray, Mr. Adams, that the United States does not suffer unduly from its lack of a monarchy.” )
Some of the Founders shared the sentiment of the king. From the perspective of men like Adams and Alexander Hamilton, their revolution was against the “corrupt multitude” in Parliament, not against George III. They believed that a strong and independent executive was needed to suppress the “faction” and protect the people.
Other founders vehemently disagreed, Thomas Jefferson foremost among them. The principal drafter of the Declaration of Independence, Jefferson describes the king as having established “absolute tyranny” over the colonies. The king’s national independence had been destroyed by the English Civil War in the previous century, a conflict partially stimulated by King Charles I using “forced loans” in wartime without the consent of Parliament. The conflict turned into bloodshed and he was executed. This story weighed on the Founders (English by birth) during the Constitutional Convention.
Our Constitution is their experience of self-government. It represents a thoughtful compromise of these different philosophies. Whether it was Congress’s breach of the nation’s obligations or the President’s bypassing the separation of powers in a last-ditch effort, either event would be a dark mark in our nation’s history. . Unless Congress is able to overcome factions and set the debt limit, we will have shown ourselves lacking a monarchy, after all. Congress must act now.
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