To 14th or Not to 14th? That Is Not The Question

The 14th Amendment is a terrible tool for resolving the debt limit crisis. What if it's the only alternative?

I’m Michael A. Cohen, and this is Truth and Consequences: A no-holds-barred look at the absurdities, ’ absurdities, hypocrisies, and surreality. If you were sent this email or are a free subscriber and would like to become a paid subscriber, you can sign up here.

The Debt Limit Dilemma

According to Politico, President Biden is unlikely to invoke the 14th Amendment to prevent a US debt default.

Senior Biden officials have told progressive activists and lawmakers in recent days that they do not see the 14th Amendment — which says the “validity of the public debt” cannot be questioned — as a viable means of circumventing debt ceiling negotiations. They have argued that doing so would be risky and destabilizing, according to three people familiar with the discussions.

… “They have not ruled it out,” said one adviser to the White House, granted anonymity to speak candidly about discussions. “But it is not currently part of the plan.”

This is exactly what you’d expect White House officials to say if they were not considering the 14th Amendment route … but it’s also exactly what you would expect them to say if they were considering it.

If Biden intended to go the 14th Amendment path, the last thing he would do is signal it in advance. Doing so would end any chance of reaching a deal with House Republicans. What incentive would congressional Republicans have to stick their neck out on an agreement involving some level of compromise if Biden can pull the rug out from underneath them and act unilaterally?

Instead, the White House keeps publicly restating that default shouldn’t happen and it’s up to Congress to stop it from happening. But what if Congress doesn’t act to prevent it?

As much as Biden doesn’t want to invoke the 14th Amendment, would he rather have a debt default, which could lead to a recession 18 months before he asks voters to give him another term as president? For all the talk about Biden acting unilaterally — and all the problems with such a plan — he might have no other choice.

Let’s Make A Deal?

To be clear, Biden almost certainly prefers making a deal, even one that potentially undermines his policy priorities. It’s the safer and easier way forward. The president is an institutionalist, and I’m sure the idea of using a gimmick, like a novel interpretation of the 14th Amendment, offends him. Moreover, Biden ran for president on a platform of being able to reach across the aisle and make deals with Republicans. Heading into reelection, he will want to cultivate that bipartisan image. Even if progressives don’t like it, they will grumble but likely go along because the last thing they want to do 18 months before a presidential election that will probably have Donald Trump on the ballot is undercut Biden’s political prospects.

However, the problem is not Democrats — it’s the House GOP caucus. How does Biden strike a deal with Kevin McCarthy that will be a) acceptable to the Republican caucus and b) not cost him his speakership? McCarthy has taken such an extreme position on what it will take to raise the debt limit that it’s hard to see what he could agree to that would be acceptable to a majority of Republicans. And if Biden says no on work requirements or holds the line on spending caps, will McCarthy give in, knowing that Biden has a possible ace up his sleeve on the 14th Amendment? I doubt it. McCarthy has every incentive to play hardball — and even if default happens, the economic fallout could torch the White House more than Congress.

Moreover, we need to assume any agreement between the White House and McCarthy will offend some segment of the House GOP caucus. The House Freedom Caucus has not shown much propensity for compromise, so at least a few (and probably quite many) will likely vote “no” on any agreement (and there are probably others who won’t vote to raise the debt limit under any conditions). That means McCarthy will need at least some Democratic votes to pass legislation to avoid default.

If McCarthy relies on Democratic votes, the chances that at least five House Republicans would mount a challenge to McCarthy and seek to unseat him as Speaker are relatively high. Since we know that McCarthy is willing to withstand significant public humiliation to get the speakership, would he really agree to a deal that would risk costing him his job?

How does the circle get squared if there’s likely no possible deal that won’t lead to a Speaker challenge?

It’s tough to come up with an agreement that McCarthy can accept. And if that’s right, it brings us back to the 14th Amendment as the only option that could avert disaster.

The Least Worst Option

However, as Ezra Klein notes in his Sunday column in the New York Times, that is a terrible solution to the current situation.

The strength of the Biden administration’s political position is that it stands for normalcy. The debt ceiling has always been raised before, and it must be raised now. But if the administration declares the debt ceiling unconstitutional, only to have the Supreme Court declare the maneuver unconstitutional, then Biden owns the market chaos that would follow. Who will voters blame in that scenario? Republicans, who say they just wanted to negotiate over the budget, as is tradition? Or Biden, who did something no other president had done and failed?

Right now the positions are clear. The White House is open to budget negotiations but opposed to debt ceiling brinkmanship. Republicans are the ones threatening default if their demands are not met. They are pulling the pin on this grenade, in full view of the American people. Biden should think carefully before taking the risk of snatching it out of their hands and holding it himself.

All of this is true.

Biden acting unilaterally could easily spook the markets because there is no guarantee that when the case eventually ends in the Supreme Court, the conservative justices will uphold Biden’s move. In the meantime, buyers of US debt could demand higher interest rates as protection against repayment if the Court rules against the president. If that were to happen, it could lead to the same disastrous spike in interest rates as a default.

But Klein’s argument misses the point. Biden’s two options can’t be reduced to invoking the 14th Amendment or not invoking the 14th Amendment. The options are bad and catastrophic.

If no deal is reached, Biden can allow a default to happen or act to prevent it. Would Biden rather take the unknowable risk that the Supreme Court strikes down his order or the entirely knowable risk that failing to act will lead to default? In my opinion, this isn’t a close call.

Indeed, when it comes to the blame game that Klein identifies above, he leaves out a crucial actor — the Supreme Court. Does the Court want to get blamed for sparking an economic catastrophe? Maybe some justices do, but I’m not sure that’s a majority view. And the closer to the deadline that Biden acts, the harder it will be for the Court to take action that they know will cause economic calamity, public outrage, and a swift backlash against the Court.

Obviously, we don’t know what the Court will do or how the markets will react if Biden invokes the 14th Amendment. It will create enormous uncertainty. But sometimes, the least bad option is the best one. Because if there’s no deal with House Republicans — there is no other alternative than for Biden to act.

What’s Going On

• Searing piece by a Wyoming Republican on what Christian nationalism has done to her state.

• This is a great and important piece by EJ Dionne on the real potential victims of the debt ceiling standoff — America’s poorest and most vulnerable citizens.

• Fascinating article on how a new radar system identified the ruins of an extraordinary urban metropolis in northern Guatemala dating to 1000 BC.

• America is in the midst of a moral panic.

Musical Interlude

This is a better Rufus Wainwright song.

This is legitimately one of my favorite songs of all time.