On January 19th, two days from now, the United States will hit the debt ceiling, the statutory limit on how much money it can borrow. Janet Yellen, the Secretary of the Treasury, has said that she can initiate "extraordinary measures" to allow the United States to pay its bills, but the extraordinary measures will run out by early June. If Congress doesn't vote to raise the debt ceiling, the United States will default on its credit for the first time in history, and we will begin to witness the slow-motion implosion of the world economy.
This looming fiscal "crisis" is completely manufactured and sourced from the Republican Party. They want to live in a world where the federal government does not provide for its own citizens through Social Security, Medicare, and Medicaid. Such an opinion, though cruel and selfish, is something conservatives in a free country are fully entitled to hold. But in a normal democracy, politicians take their political opinions to the voters, and if the voters agree with you, your policies will win the day. However, fiscal conservatives suffer from an intractable, unsolvable dilemma: The voters don't agree with them. The last two times the republicans tried to destroy entitlements and government welfare programs, it has resulted in the two worst electoral performances for congressional republicans in the 21st century. In 2005, George Bush claimed his re-election bid, and his large republican majorities in the House and Senate, had scored him "political capital" to privatize social security. His effort was so unpopular, it never came to a vote, and after Americans saw the abject failure that results from fiscal conservative governance, they threw the GOP out - the Democrats gained 31 House seats and 6 senate seats in 2006. In 2017, Republicans believed they had achieved the political capital they needed to destroy the Affordable Care Act. But when American voters saw the eye-popping 20 million people that would lose their insurance without the ACA, they finally saw "Obamacare" for its real value, and they once again threw out their fiscal conservative government, with Democrats gaining 41 seats in the House.
And now in 2023, republicans control one out of three branches of elected government. A normal, sane political party would view such a situation as an opportunity to negotiate in good faith with the President and his allies in the Senate to achieve workable political goals that the voters elected you to solve, such as inflation and rising crime. If republicans really believed gutting the welfare state was so popular, they would be mightily campaigning throughout America to "END SOCIAL SECURITY AND MEDICARE IN 2025" - and if the voters of this hypothetical America agreed with them, they would elect republicans to the Senate in 2024, elect a new conservative President, and the republicans, by the fair and just means of the democratic process, could destroy Social Security and Medicare. But the republicans know that such a thing cannot actually occur in the real world, and so they have decided to point a loaded gun at the American economy, and threaten to destroy it if their unpopular policy demands are not met.
This is the pure definition of antidemocratic political terrorism, and just like with real terrorists, one cannot negotiate with terrorists. While it is important that Biden and his allies in Congress hold out an olive branch for moderate republicans as long as possible, it is very unlikely the republicans will ever grab it.
McCarthy's Unsolvable Catch-22
Kevin McCarthy is in a bind. Every day of his meager existence as Speaker, he walks around with a gun to his head being pointed by the Never-Kevin caucus that made him wait for four days and fifteen votes to become Speaker. The Never-Kevins are crazy, and they are fully willing to crash the economy to "own the libs" if Joe Biden doesn't agree to dismantle the welfare state. While Kevin McCarthy does not personally wish ill on the world economy, any member of his right-flank can petition for a motion to vacate if he dares to negotiate with the democrats on the debt limit. But if Kevin McCarthy appears poised to barrel the economy over a cliff, any member of his left-flank (if we can even call them "moderate") can make a motion to vacate his chair. Kevin McCarthy is left powerless against the angst of both sides of his caucus, and that makes him weaker than ever in this fight. He simply cannot be trusted to raise the debt limit, and Biden must take action to prepare for this outcome.
Biden's 11th Hour Executive Order
If the House republicans refuse to negotiate in good faith over the debt ceiling crisis, Biden should issue an executive order on the day before the United States defaults, declaring that the debt ceiling is unconstitutional, and ordering the Treasury secretary to continue issuing payments. The constitutional basis for such an order is derived from an obscure section of the 14th Amendment declaring that "the validity of the public debt of the United States, authorized by law ... shall not be questioned." It was written by the liberal Republicans of the mid-19th century in order to prevent a future Congress under the control of southern Democrats from refusing to pay for the debt incurred by the Civil War. While constitutional originalists would make the argument that the debt ceiling and a federal budget of over 34 trillion dollars was simply not conceivable by the writers of the amendment at the time, there is a valid argument that it threatens the validity of the US’s public debts by creating the possibility of default, and therefore, it is unconstitutional. In the days, or mere hours of Biden's executive order being released, the republicans would obviously sue, because their entire political leverage will have been unilaterally dismantled by one document issued by Joe Biden. But Biden's executive order will be the ultimate Trump Card, and the republicans can't defeat it.
It's a Win-Win Scenario for the Democrats
Biden's executive order would immediately be sent to the Supreme Court, which would almost certainly take up the case, as it would incur serious questions over the interpretation of congressional powers under the 14th amendment. But because Joe Biden will have issued the executive order at the last possible moment before the United States would have slipped into default and imploded the world economy, the Supreme Court would have to keep the order intact while it reviewed the case, held oral arguments, and drafted a decision, even if such a decision took just a week. If the Supreme Court were to issue even the smallest injunction on the executive order, the U.S. would immediately default. Biden would be check-mating the Supreme Court, and the conservative justices would have no way to avoid the issue. About every 5 seconds, the United States national debt grows by $100,000, and with the United States blowing past the debt ceiling as the Supreme Court would be debating the issue, the court would be left with two options: It could declare Biden's executive order unconstitutional, and the mere second such an opinion were announced, the Treasury would instantly stop making payments, resulting in an immediate spike in interest rakes, a downgrade of the U.S. credit rating to between BBB and B, and a loss of funds within the economic system such as Social Security checks, resulting in a chain reaction spurring a fiscal meltdown and an economic depression with upwards of 10% unemployment. And the Supreme Court, already seen as the villain by most Americans after the Dobbs decision, would become the ultimate 2024 campaign tool for the Democrats. As the economy would melt down before Americans' eyes, they would blame the Supreme Court, three of whom were appointed by the 2024 presidential republican nominee himself, Donald Trump. Biden and the democrats would win the election in a landslide, sweeping Congress, gaining the power to eliminate the filibuster, having the political capital to expand the Supreme Court, and the conservative movement in America would be dead for a generation. The Supreme Court justices are smart men and women, and they know the political consequences of issuing opinions against the will of the people, especially after they likely cost the republicans the Senate in 2022. But the conservatives on the Supreme Court can throw themselves a life-preserver, and declare that Biden's executive order withstands constitutional scrutiny. And with that Supreme Court order, the debt ceiling would be gone forever, and could never be used as a political hostage for the republicans ever again.
Yes, this is political hardball. But the consequences of failure against the fascist Republicans are too high-stakes to play nice-guy. Put the ball in the SCOTUS's court, literally, and dare them to drop the nuclear bomb on our economy.
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