The White House Wants a Debt Ceiling Deal
For the past several days, I have been writing about a lawsuit filed by the National Association of Government Employees (NAGE), challenging the constitutionality of the debt ceiling. Their case argues that, by passing into law a number of appropriations that cost money, and also by passing into law a hard debt ceiling, Congress is requiring the president, once that debt ceiling is reached, to pick and choose which laws to break. This is approximately the same argument that Matt Bruenig made on Tuesday: “Congress has essentially passed a set of laws that direct the president to do X and not-X at the same time.” This cedes the power of what amounts to a line-item veto to the executive, something that has already been found to be unconstitutional.
Last Friday, NAGE filed for a preliminary injunction in the case, seeking the kind of quick-acting relief that made the suit a legitimate factor in the debt ceiling crescendo. Joe Biden and Treasury Secretary Janet Yellen, the defendants in the case, were served on May 16 and had until June 6 to respond.
The good news is they responded early. The bad news is that, rather than acquiesce to the plaintiffs, and agree that hitting the debt limit would force the executive branch to break the law, the Justice Department, which is representing Biden and Yellen, signaled their intention to oppose NAGE’s bid for relief late on Monday. “Defendants intend to file an opposition to Plaintiff’s Emergency Motion for Preliminary Injunction,” reads one part of a legal filing in the case.
The judge in the case, Richard G. Stearns, set a status conference to discuss the schedule for Tuesday morning. As a result of that conference, there will be a hearing on May 31—one day before the projected X-date—over the preliminary injunction. The defendant’s response isn’t due until May 30.
Politico has a write-up of the status conference. Judge Stearns resisted holding the hearing sooner because, he said, “if the emergency is as dire as you think it is, I would think that it’s within the power of the president to address it using executive branch authority.”
Keep in mind that President Biden, just days ago in Japan, told reporters that he, too, believes he has the authority to keep paying the nation’s bills. The problem, he said, was the timing, since any sweeping display of power would be challenged in court. But instead of asserting that authority as the defendant in the NAGE case by agreeing with the plaintiffs on the injunction, the president is actively fighting their attempt to obtain an injunction.
Now, we don’t yet know the nature of the objection. It could be about ripeness; the borrowing limit hasn’t been reached, and the government’s lawyers may just argue that NAGE doesn’t have a case until then. It could be about whether federal employees have standing to file a case to keep the executive branch borrowing. It could be that the White House wants to preserve the ability to prioritize payments in a catastrophe, which this case would make impossible. (In fact, that is the argument; they argue that would be an unconstitutional line-item veto.) It could be that the case will rapidly be made moot if the White House and House Republicans make a deal. Maybe this will be the moment the government unveils the trillion-dollar coin or a zero-principal bond and says, “We object to the case because we don’t have to break the law at all, we have other options to pay the bills!” (Ha, no). It could be any number of technical objections, rather than opposition to the actual argument that NAGE is making.
Those arguments would be “garden-variety defenses to virtually any lawsuit that seeks an injunction on the executive, and the long-standing doctrine of ‘constitutional avoidance’ urges the court to resolve the case on one of those grounds before reaching the constitutional issue,” said Max Kennerly, a litigator in Philadelphia.
Here’s what we do know. When Stearns asked the lawyer for the defendants, Alexander Ely of the Justice Department, what the government thought of the merits of the case, “Ely said he was not authorized to stake out a position on that question and he suggested that the department would argue that the union’s suit is not a proper vehicle to force DOJ to come to a legal conclusion … ‘This requires high-level coordination among the U.S. government.’”
There’s certainly a school of thought that the executive branch has a “duty to defend” laws, as part of the “take care” clause of the Constitution. But the Obama administration didn’t do that in Windsor v. United States, the case that eventually legalized same-sex marriage. Then-Attorney General Eric Holder wrote in a lengthy statement that the president concluded that Section 3 of the Defense of Marriage Act was unconstitutional, and that the Justice Department should not defend it. This law review article from Brianne Gorod takes the opposite side, that executing the laws doesn’t mean defending ones that the president deems illegal.
The duty to defend is “less a matter of precedent and principle than it is a matter of vibes,” Kennerly said, noting that some argue the real motivation is “a bureaucratic impulse from the DOJ is to protect its turf and to appear independent from the President.”
But consider the current situation. House Republicans are insisting upon a draconian set of demands to hobble federal spending (not on the military, of course, because those hundreds of billions of dollars magically don’t impact the budget for some reason). After insisting for months that there would be no negotiation on the full faith and credit of the U.S. government, Biden started negotiating. He then ruled out any other option beyond reaching a deal, cutting off his own leverage at the knees. And he’s now gone beyond that, by actively opposing one of the few methods of escape available.
I concur with what Thomas Geoghegan, attorney for the plaintiffs, said in court today. It’s the president who has said the fallout from a default would be catastrophic, Geoghegan remarked. The only reason they aren’t saying it as a defendant is to keep their options open in the negotiations. They don’t want to take a side, because then the talks might break up.
So, to put it bluntly, the White House may have initially stumbled into the box in which they now find themselves, but now they’re standing firmly in it on purpose. They’ve created the conditions by which there is no alternative. If they wanted to pry an alternative open, they had an option with this case. The case will go forward, of course, but a May 31 hearing leaves almost no time for it to have much bearing on the situation. It’s just another marker in the future that pressures the White House into making a deal.
The most recent negotiations have been termed “productive,” in the meaningless way that word has been thrown out. But there really isn’t visible common ground between the parties. The White House is bending over backwards, offering a spending freeze on the discretionary budget (and telling everyone all about it), but House Republicans have said no. Why wouldn’t they? The people on the other side of the negotiating table have signaled they will never walk away and they have no other option but an agreement. Why wouldn’t the GOP just ask for more and more, and reject anything the other side wants?
Part of this is about the complete malpractice of two key officials of the administration: Janet Yellen and Attorney General Merrick Garland. Yellen, co-defendant in this case, has been the most publicly opposed to any measures other than a bipartisan deal. Her department has completely botched pursuing those measures, as Employ America wrote in a must-read post. Treasury is now scrambling to figure out how to delay certain payments, something they could have sorted out months ago. Garland supplied the attorneys defending this case, and while we as yet don’t know their rationale, the Justice Department would usually take the lead on deciding whether and how to defend statutes.
But the buck stops with Joe Biden, who selected both these lieutenants. He put himself in this bad negotiating position. And he’s not going to let anyone push him off course.