President Joe Biden gave the first indication on Tuesday that he would consider unilateral action on the debt ceiling, following his meeting with congressional leadership. Biden and the “four corners”—House Speaker Kevin McCarthy, Senate Majority Leader Chuck Schumer, and Minority Leaders Hakeem Jeffries and Mitch McConnell—agreed to nothing besides having a second meeting on Friday. In the meantime, their staff will continue to talk.
“I didn’t see any new movement,” McCarthy told reporters following the meeting. Which means McCarthy is still ready and willing to send the nation into default. He and McConnell are holding fast to their hostage demands, determined to wreck the economy either by wrecking the nation’s credit rating or inflicting draconian spending cuts that would result in a recession.
Biden, however, did move a little. He spoke to the press after the meeting and dropped a small bombshell. “I have been considering the 14th Amendment,” he told reporters. That’s shorthand for challenging the constitutionality of the law that puts Congress in charge of paying the bills that they incur. It’s news, as thus far the White House has been saying they’re ruling it out. There’s a big caveat here, Biden said: “The problem is it would have to be litigated. And in the meantime, without an extension, it would still end up in the same place.”
That litigation has already started in a Massachusetts federal court. The National Association of Government Employees is suing Biden and Treasury Secretary Janet Yellen, arguing that the debt ceiling statute is unconstitutional. Their argument is pretty clean. The 14th Amendment says the president is responsible for making sure the nation does not default. The Constitution also lays out clear separation of powers, and gives Congress the job of deciding what gets funded and what doesn’t. The debt limit statute, however, directs the president to decide which programs authorized by Congress should continue to be funded and which programs should not. Congress making those decisions is a violation of the separation of powers.
The NAGE represents 75,000 federal workers, including civilian employees in various defense agency support jobs, and in the Environmental Protection Agency, Commerce Department, and Department of Veterans Affairs. Those employees would be subject to layoffs and furloughs if the nation goes into default, so they definitely have standing in the suit. They want the courts to block the debt limit statute from being enforced until the courts decide on their challenge. That probably isn’t going to happen in the next two or three weeks, which is as long as we have until default.
As far as message-setting from Biden goes, though, it’s pretty good. So was his response in this exchange with a reporter:
Q: But in terms of what he is proposing, is there any room for negotiation?
THE PRESIDENT: What’s he proposing? Did he tell you?
Q: Well, he—
THE PRESIDENT: Did you hear him?
Q: —he talked about—
THE PRESIDENT: No, no, I’m not being facetious. Did he tell you what he’s proposing? Q: He—he was talking about the bill.
THE PRESIDENT: Yeah. But what—what does it propose? Do you know?
I’m not being a wise guy. You all are very, very informed people. Do you know what that bill cuts?
Q: He—there is a long list of things that it—it cuts that he—
THE PRESIDENT: No. No, it doesn’t say. It says—does it say what it’s going to cut or just say generically it’s going to cut? You get the problem. You’ve answered.
That is indeed the problem, and Biden did a good job of exposing it: McCarthy came in with a Freedom Caucus demand that the budget be slashed, but aside from a few programs like Medicaid, where they got specific, they didn’t name any other cuts. How do you negotiate with that?
So far, Biden is showing no signs of cracking, which is good. His history on that, dating back to the Obama administration when he helped negotiate damaging economic austerity in exchange for Republicans playing nice, looms large. We’ve heard a lot about the lessons Democrats, including Biden, learned from that and how they never want to repeat it. But the default response from Democrats that they have to be the responsible ones in preventing catastrophe is always a fear. Even when that means conceding to the economic terrorism of McCarthy and McConnell.
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