January 11, 2013

All the talk this week about “Mint the Coin” and other ways of getting around the debt limit if the Republican House insists on a full confrontation with the president may have obscured the more pressing point: The debt limit is really, really bad law.

Remember, if the government actually does reach the debt limit (and runs out of gimmicks to postpone it), the president will be forced to break the law — he’ll either have to break the limit or fail to spend money that Congress has told him to spend.

Most likely, he’ll have to pick and choose which duly authorized obligations of the government to keep. But that’s exactly the kind of overreach that got President Richard Nixon in trouble and sparked congressional legislation against “impoundment” back in the 1970s. That’s why the whole idea of having a separate “debt limit” is just not a very good idea, as Rep. Jerrold Nadler argued today.

It’s also why using the debt limit as a hostage hasn’t worked well for Congress when it’s tried that in the past. In a new Brookings paper, Philip A. Wallach looks back at attempts by Congress in the 1980s and 1990s to use the debt limit for policy concessions. The problem seems to be that the weapon is just too powerful to exploit; presidents don’t believe that Congress would really incur the damage to the economy that would result from standing firm on the debt limit, and so they won’t give up concessions over it. Moreover, again, if Congress ever did force the government to hit a hard ceiling, it would result in a massive shift of power to the executive, since a president with no guidance on what to spend could presumably do whatever he wanted, unrestrained by Congress. 

Wallach also argues that having a separate debt limit does not seem to have done anything at all to reduce either government budget deficits or government spending. 

What it all comes down to is that everyone — conservative Republicans included — would be better off if the whole thing just went away and Congress dealt with budgets by passing tax and spending bills.