25% Of All The National Debt Ever Accrued In American History Was Added Under Trump
In 1996, the Republicans rammed through a platinum coin provision— U.S.C. 5112(k)— written by Rep. Michael Castle (R-DE) which was generally opposed by Democrats. It states that “The [Treasury] Secretary may mint and issue bullion [changed in 2000 to “platinum bullion coins] and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary's discretion, may prescribe from time to time.” Ironically, the concept is interesting because it would eliminate the leverage (hostage taking) the House Republicans have over the debt ceiling and their threat to force the country into default and crash the world economy.
Last week, economist Richard McGahey wrote that “Some Republican leaders have signaled they want deep cuts in Social Security and Medicare as the price for debt ceiling negotiations. Representative Jason Smith (R-MO), the new chairman of the powerful tax-writing Ways and Means Committee and a self-described ‘firebrand’ [also a severely mentally ill closet case] has made tough statements about cutting spending and rejecting compromise. Smith is a member of the conservative House Republican Study Committee, which last year issued a report calling for higher Medicare and Social Security eligibility ages, along with cuts in disability insurance. Republicans also have hinted at partial or total privatization of Social Security, a proposal that politicians usually avoid.”
With McCarthy refusing to allow a vote to raise the debt ceiling— knowing full well that enough mainstream Republicans would join with the Democrats to do so— Biden has no choice but to tell Yellen to mint a trillion dollar coin and deposit it in the Federal Reserve, making funds available to pay the debts the Republicans have run up. “Serious economists,” he wrote, “see minting the coin as a viable option rather than acceding to Republican threats to drive us into default or slash social spending. Krugman recognizes the coin is a ‘silly gimmick,’ but contrasts it to what he calls Republican ‘naked sabotage’ of the budget process through ‘abuse of the debt ceiling.’”
Two years ago, Krugman wrote that The Republican Party has become both radical and ruthless; let’s not forget that most GOP legislators refused to certify President Biden’s election. And while this radicalized party cheerfully authorizes trillions in borrowing whenever it holds the White House, it weaponizes the debt limit whenever a Democrat is president. During the Obama years, Republicans used the debt limit for blackmail, refusing to raise it unless President Barack Obama agreed to spending cuts— spending cuts the GOP wouldn’t have been able to get passed through the normal legislative process, despite having partial control of Congress. …[What Republicans expect is] that voters will blame Biden for bad things that happen on his watch, even if Republicans deliberately caused those bad things to happen… Janet Yellen could mint a platinum coin with a face value of $1 trillion— no, it needn’t include $1 trillion worth of platinum— deposit it at the Federal Reserve and draw on that account to keep paying the government’s bills without borrowing.” Think of all that interest money saved!
On Friday, in his NY Times column, You Can Let Republicans Destroy the Economy, or You Can Call Their Bluff Jamelle Bouie wrote that the dysfunctional Republicans in control of the House are “determined to use the debt limit to force spending cuts it can’t otherwise pass into law. Jason Smith— again a very seriously sick man— claims that ‘The American people are the ones that’s demanding the cut in spending,’ which is absolutely untrue. Poll after poll after poll showed an overwhelming majority of Americans— even including Republicans do not want any cuts to Social Security or Medicare and would like to see higher taxes levied on the super rich. 77% of voters— and 76% of Republican voters— oppose the Republican plan to privatize Social Security.
62% of voters say they would be more likely to vote for a candidate who favors raising taxes win the wealthy to support social spending. The Republicans want to do the opposite— lower taxes on the wealthy by abolishing income taxes and raising taxes on the working class and middle class by taxing all goods and services at a 30% rate.
Bouie agrees that the White House shouldn’t negotiate with the Republicans over spending cuts. “This is the right approach,” he wrote; “there were, after all, no negotiations over the debt limit when Donald Trump was president— but Biden could and should go further than rejecting Republican brinkmanship; he should reject the debt limit itself as an unconstitutional use of congressional power. The debt limit, remember, is not a limit on spending. It is a limit, instead, on the borrowing authority of the federal government. It represents the total amount of money the Treasury is authorized to borrow to meet the obligations of the federal budget under existing law.”
This is an important point. The Constitution directs the president to “take Care that the Laws be faithfully executed,” which is generally understood to be an affirmative duty to carry out the law as written. When Congress authorizes a budget, the president is obligated to fulfill the terms of that budget once he signs it into law. If Congress tells the president to spend $50 billion on a new program through the Department of Health and Human Services, he must spend $50 billion on a new program through the Department of Health and Human Services. He can’t decide, on his own, to cut the program and spend $40 billion instead, or spend $60 billion on a larger program and raise taxes to cover the difference.
“For a president to choose unilaterally to collect taxes in a way not authorized by Congress, or to spend money in a way not authorized by Congress, or to borrow money in amounts not authorized by Congress, violates the separation of powers enshrined in the Constitution,” the legal scholars Neil H. Buchanan and Michael Dorf explained in a 2012 paper on the 2011 debt ceiling standoff between President Barack Obama and Speaker John Boehner’s large and newly empowered Republican House majority.
What binds the president even further is that the congressional debt limit does not exist by itself. The Constitution is not silent on the question of the nation’s debt. In addition to carrying out the law as written, the president must also respect the demands of Section 4 of the 14th Amendment, otherwise known as the Public Debt Clause, which reads as follows:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
The Public Debt Clause, like the rest of the 14th Amendment, is a direct result of the aftermath of the Civil War, passed in 1866 and ratified in 1868 under the military Reconstruction policies of the Republican Congress.
With the end of hostilities and the dissolution of the rebel army, the United States federal government repudiated Confederate debt, making it worthless to the creditors of the rebellion. But as former Confederates re-entered public life, there was real fear among Republican lawmakers that a future majority of Southern Democrats and their allies might invalidate Union war debt in retaliation. To prevent this and secure the nation’s public debt for the future, Republicans added the clause to their draft of the 14th Amendment.
…When Congress takes action that requires the Treasury to borrow additional funds beyond statutory limits, it puts the president in a vise. If forced to act unilaterally, he can only resolve the conflict between the two sets of instructions— the spending bill and the debt limit— by taking one of two unconstitutional actions: raising taxes or cutting spending, neither of which he can do without congressional authorization. More to the point, when Congress puts the president in this situation, it places “substantial doubt on the validity of the public debt” by threatening nonpayment, or default. This, in fact, is what happened in 2011, when Standard & Poor’s removed the United States from its list of risk-free borrowers on account of Republican intransigence over whether to pay the nation’s bills.
…Biden should make the case that the debt limit, because of the threat it poses to the validity of the nation’s debt, is unconstitutional under the 14th Amendment.
By this reasoning, Congress has no right to prevent the White House from faithfully executing the law and borrowing money in accordance with its own instructions. If and when the Treasury exhausts its extraordinary measures, it should simply keep issuing debt, in order for the federal government to do what it is obligated to do under the Constitution.
This is not the best of a set of bad options; I’d say it is the best option, period. President Biden, like all other constitutional officers, is duty bound to interpret and faithfully adhere to the Constitution. And here, on the question of whether he is permitted to place “substantial doubt” on the status of the national debt, much less to let the nation go into default, the Constitution is clear— or at least clear enough for the president to take a stand.
