Whether over wages in Detroit or missiles in Cuba, successful settlements require a reasonable balance of positive and negative incentives across the table. If only one side must negotiate, that side will have to settle largely on the other side’s terms. Up to now, the balance of fear in the debt ceiling negotiations has heavily favored the Republicans—they think they can say “no” and leave it to the President to deal with the dire economic consequences.
The President is the lightning-rod for a good reason; he can’t claim he can’t make up his own mind. He can be cornered while Congress can hide in its divisions. (Senate Republican leader Mitch McConnell displays this false modesty with growing relish.)
The Republicans believe that Obama would not dare propose a debt ceiling package that would fail to pass Congress. The business community, indeed, the world community, would only insist that he make more compromises, immediately.
Presidents first solve big problems. Later, they can whine in their memoirs about being jammed my lesser mortals.
Still, this is a humiliating scenario. No matter how greatly liberals would enjoy seeing Wall Street beg Obama to save them from the fever games of their truest fans in Washington, hours after the August 2nd debt ceiling deadline Obama would have to give further concessions to the Republicans. John Boehner, Paul Ryan, and Mitch McConnell would then graciously save the day.
Today, however, Obama may have another constitutional option: introduce his own set of debt reduction proposals and continue to borrow to pay the obligations that have already been approved by Congress, even if the Republicans refuse to raise the debt ceiling and vote down his debt reduction package.
The 14th amendment of the US constitution baldly asserts that the public debt obligations of the federal government must be honored. Consequently, Obama must keep paying the bills. It would be presumptuous of Congress to limit his ability to do just that.
This constitutional amendment was borne of a very practical concern: how can you guarantee the credit of a federal government that is directed by an independent executive and two independent legislative assemblies. If the 14th amendment is effective, the US government can’t be “dysfunctional” at least when it comes to paying its bills.
This is a very new line of argument in this debate and, being new, no one is sure it would be wise to use it. Nevertheless, in radical times even truly conservative minds may have to break new ground as well.
It would certainly be foolish for the White House to rule it out. The idea strengths Obama’s hand at the table. Is there any doubt where the people would stand on this choice: an economic crisis or a constitutional crisis? A chip in the powers of Congress or a collapse of the US currency?