As people continue to debate the legal issues surrounding the possibility that President Obama will simply cite constitutional considerations and refuse to abide by the statutory debt limit, one thing I want to bring into view is the fact that the legal dubiousness of this has to be weighed against the legal dubiousness of the other options. The conventional idea is that absent a debt ceiling increase, the Treasury Department should stop issuing new debt and start a process of payment prioritization by which the administration decides which bills get paid and which don’t get paid.
This, however, seems to me to be illegal. The law says that senior citizens are entitled to their Social Security checks. The law says that funds have been appropriated for the Elementary and Secondary Education Act. Federal employees have contracts. Federal contractors also have contracts. It’s not clear that anyone would have standing to sue if Obama refused to abide by the debt ceiling. But it seems perfectly clear that if the government promised to pay you to do some work, and then just doesn’t pay you that you have grounds for a legal complaint. The president must “take care that the laws be faithfully executed” and the appropriations bills are real laws. Congress passed them. What you have here is a conflict between the government’s legal obligation to pay money and the government’s legal obligation to cease issuing new debts. Either path seems about equally arbitrary and illegal. The issue, after all, is that congress has passed contradictory laws. The tax code raises so much revenue, but legally authorized expenditures require so much money, and legally authorized borrowing doesn’t cover the gap. So what’s a president to do?