The following is an excerpt from OpinionJournal.com’s “Best of the Web” written by the editor, James Taranto.
Bottom Story of the Day
“Great Office Leasing Slowdown Seen Continuing”–headline, Crain’s New York Business, Jan. 8
Longest Books Ever Written
“Celebrity Hypocrites”–slide show title, FoxNews.com, Jan. 9
Simpson Bowls
Last week’s tax hikes, massive as they were, were far from sufficient to balance the federal budget. So the federal government continues to borrow money and soon will require Congress to authorize an increase in the legal limit on debt. As in 2011, Republicans say they plan to use this necessity as leverage to force cuts in spending.
Democrats, for their part, are again suggesting two ways of working around the debt limit. The proposals are so implausible, we are skeptical that they can even be taken at face value.
The first was floated last week by New York’s Rep. Jerrold Nadler and is described by Politico: “President Barack Obama should order that a couple of platinum trillion-dollar coins be made and then have the coins deposited in to the Fed and, voilà, debt ceiling crisis averted.”
There’s a statute authorizing the minting of platinum commemorative coins that is worded vaguely enough that it seems not to preclude coins in absurd denominations. The idea for a trillion-dollar instrument seems to have originated with a 1998 episode of “The Simpsons,” titled “The Trouble With Trillions,” in which the FBI sends Homer on a mission to recover a trillion-dollar bill, issued just after World War II (when a trillion was real money!) to fund reconstruction of Europe, but stolen by Mr. Burns. …
The coin idea was thrown around during the last debt-limit debate too. As NPR noted at the time, former Enron adviser [and New York Times columnist] Paul Krugman was dismissive: “It appears to be legally possible . . . to mint a $2 trillion platinum coin, which is ridiculous, but the whole debate is ridiculous, right?” Yet now Krugman is pushing the idea. But his arguments for it are so preposterous that we’d be sure he was putting us on if he’d ever shown any sign of having a sense of humor:
One [objection] is that it would be undignified. Here’s how to think about that: we have a situation in which a terrorist may be about to walk into a crowded room and threaten to blow up a bomb he’s holding. It turns out, however, that the Secret Service has figured out a way to disarm this maniac–a way that for some reason will require that the Secretary of the Treasury briefly wear a clown suit. (My fictional plotting skills have let me down, but there has to be some way to work this in). And the response of the nervous Nellies is, “My god, we can’t dress the secretary up as a clown!” Even when it will make him a hero who saves the day?
As thought experiments go, this one is a real head-scratcher. For one thing, when it comes to preventing actual terrorism, Krugman thinks (or thought in 2009, writing about the Bush administration) that extraordinary measures not only are uncalled for but are “crimes.” For another, the fictional scenario Krugman uses as an analogy is, if anything, even more fanciful than the idea of the trillion-dollar coin. Unlike Krugman, we have a fine imagination, but it fails us in trying to imagine a circumstance in which it is even remotely plausible to imagine a Treasury secretary stopping terrorism by wearing a clown suit. So in attempting to argue that the idea is worth taking seriously, Krugman only reinforces its absurdity.
The other idea comes from the top House Democrat, as the Huffington Post reports:
House Minority Leader Nancy Pelosi (D-Calif.) urged the president on Sunday to . . . simply bypass the upcoming debate over raising the debt ceiling by deeming the entire cap unconstitutional.
Appearing on CBS’ “Face the Nation,” Pelosi offered her strongest endorsement to-date of the 14th Amendment option, which holds that Congress doesn’t have the power to use the debt ceiling as a hostage-taking device because the validity of the debt “shall not be questioned.”
HuffPo quotes Jay Carney, the White House press secretary, as saying: “This administration does not believe that the 14th Amendment gives the president the power to ignore the debt ceiling–period,” Not only is Carney right, Pelosi’s argument is frivolous.
The relevant section of the 14th Amendment is Section 4:
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 purpose was to ensure that Union debts from the Civil War would be paid, while creditors who lent money to the Confederacy would get stiffed. But the wording of the amendment makes clear its broader applicability.
The 14th Amendment clearly does not authorize the executive branch to incur more debt without congressional approval. How could Pelosi possibly imagine it does? She seems to be construing “public debt” broadly to refer not only to payments due bondholders, but all money Congress has ordered to be spent.
That flies in the face of Flemming v. Nestor (1960), in which the U.S. Supreme Court held that Social Security was “a noncontractual benefit,” so that Congress has the authority to modify its eligibility requirements. If Social Security payments were a public debt, the 14th Amendment would prevent Congress not only from reducing them but even from questioning them.
What would happen if Congress failed to raise the debt limit is that the government would be unable both to pay off existing bondholders and to spend all the money Congress has ordered. That would create a conflict of law. The 14th Amendment would preclude resolving the conflict by stiffing bondholders. It wouldn’t authorize the issuance of debt unauthorized by Congress any more than it would authorize the collection of taxes unauthorized by Congress. (And it’s interesting that even the Democrats don’t seem to have suggested that the latter would be a possibility.)
The Nadler and Pelosi proposals are so fanciful, we can’t help but wonder if they’re just distractions. Mickey Kaus argues:
[Speaker John] Boehner and [Senate Minority Leader Mitch] McConnell realize they got burned in the last ceiling fight, effectively branded as irresponsible for being willing to put the nation’s credit rating at risk. Better for them to try to cut spending at the two less apocalyptic artificial crisis points coming up: the looming self-inflicted budget “sequester” on March 1 and the “continuing resolution” to keep the government funded later that month.
The problem for Boehner and McConnell is that the debt ceiling “cliff” comes first. They’d probably love to find a way to move past it to the sequester and shutdown talks.
True to his contrarian bent, Kaus argues that minting the trillion-dollar coin would solve this problem for the Republicans. But no one else sees it that way, including the Republicans. Maybe the Dems are just making outrageous proposals in hopes of goading the GOP into a fight the Dems think they’re sure of winning.
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