Add Bill Clinton to the list of people who want Obama to declare the debt limit unconstitutional if Congress does not raise it in time.
There’s still time for the McConnell-Reid negotiations to produce a deal that could pass in time to avoid that, and given the administration’s clear desire to get a lot of deficit reduction passed as part of this process, that is clearly their first choice. But it is worth emphasizing again that the “14th amendment option” is the best of a number of bad options should that not come to pass. One alternative is for the Treasury to start prioritizing payments, which is a logistical nightmare that would very quickly shut down large parts of the government; $134 billion would have to be cut in August alone. By comparison, Doug Elmendorf, director of the Congressional Budget Office, has said a cut of $100 billion from the 2012 budget could significantly hurt GDP growth.
And then, at some point, we would default and bear all the terrible consequences of that, which Ezra lays out here. Obama is temperamentally unsuited to dramatic actions like ignoring an entire federal law, but there comes a point where he has to embrace an ethic of responsibility and realize that the consequences of the alternative are too grave to accept. It would would upset Congress and would get the courts involved— impeachment hearings could even be called. But the economic recovery wouldn’t be completely derailed, and the U.S. would not default on its debts. That sounds like a fair trade.