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The bargain rushed through Congress on Wednesday night clobbers the U.S. Constitution. It shifts control over the debt ceiling from Congress to the president, in violation of Article 1, Section 8, and pushes the nation toward a slippery slope of allowing the president unlimited power to borrow.
Article 1, Section 8, states that “Congress shall have the Power To lay and collect Taxes … to pay the Debts and provide for the common Defence and general Welfare of the United States; . .. To borrow Money on the credit of the United States … “
Until 1917, the president had to ask Congress’ permission for each borrowing and frequently acquiesced to conditions. That year, Congress devised the debt ceiling, which gave the president flexibility to borrow up to a certain amount in order to fund a world war.
Ever since then, presidents have come to Congress once or twice a year for a debt-ceiling hike. Until this year, Congress had never abdicated control over the nation’s indebtedness.
The U.S. Supreme Court has ruled that Congress can’t surrender its powers to another branch of government or change how laws are made (INS v. Chadha, 1983). But that’s what the deal concocted Wednesday night does.
Instead of raising the debt ceiling, the Default Prevention Act of 2013 suspends it and shifts power to the president to determine how much the nation should borrow.
Congress’ check on borrowing is so diminished as to be laughable. It will now require a two-thirds vote — a supermajority — in both houses to “disapprove” the president’s decision on what the debt ceiling should be. No real negotiating, as all previous presidents have had to do.
This is no more constitutional than if Congress ceded its taxing power to the president, telling Obama that he could impose whatever taxes he wants unless two-thirds of both houses disapprove.
The Default Prevention Act of 2013 puts the president in the driver’s seat instead of Congress. It was done for the first time last January, at the urging of now former Treasury Secretary Timothy Geithner. It moves the nation dangerously close to the Democratic Party’s goal of eliminating the debt ceiling permanently — a dictator’s dream.
Ending the Next Debt Ceiling Crisis
It’s time to eliminate the legal authority of a single House of Congress to destroy the full faith and credit of the United States. The recent crisis shows that Tea Party Republicans continue to view the debt limit as a negotiating lever to extract political concessions each time our bills come due — repeatedly driving the country to the edge of the fiscal cliff, then leaving it up to the grown-ups to steer clear of disaster at the last second.
Yet to allow radical factions to retain their abstract right to precipitate debt-limit crises is very damaging. Investors will demand a premium on Treasury bonds to compensate them for the risk that some future stand-off will spin out of control. In the longer run, the underlying uncertainty will undermine the central position of the dollar in the monetary system, depriving the country of the great economic advantages that flow from issuing the world’s reserve currency. In contrast, a decisive effort to put our house in order will establish that Washington is determined to avoid future fiascos.
This is the point of a bill I introduced that changes the rules of the debt-limit game. Under the reformed procedures, the president would announce, on an annual basis, the increase required to avoid default. Congress would retain the power to reject the president’s initiative by a simple majority vote of both Houses — and if the president responded with a veto, two-thirds majorities could still insist on ultimate control. In restricting its power to play politics on this issue, however, Congress would be redeeming the Fourteenth Amendment’s command that “[t]he validity of the public debt of the United States… shall not be questioned.”